(The Center Square) – A new study finds Colorado’s participation in the federal Education Freedom Tax Credit could generate up to $657 million annually for in-state students and schools.
The research was done by Common Sense Institute and involved the EFTC component in the One Big Beautiful Bill Act.
“This is a tax credit that allows you to make a donation to any scholarship-generating organization of your choosing that’s dedicated to school choice,” said D.J. Summers, CSI’s director of communications and research operations.
“The tax credit – you get that off of your tax bill at the end of the year. And it’s allowed to go to any school choice-related scholarship-granting organization for $1,700,” Summers told The Center Square.
Colorado’s program will begin in 2027.
Summers said the state has a strong track record on education choice.
“It’s definitely been among the states in the union that have been friendlier to the idea of school choice,” said Summers. “So we know that people are probably going to take advantage of that here, and we wanted to know what the overall impacts would be to the economy, to the K-12 ecosystem and beyond.”
The $657 million depends on participation rates. However, CSI reported that a 5 to 15% participation rate would generate between $164 million and $493 million annually.
Other findings include 8,000 new jobs, $5.2 billion in gross domestic product growth and $8.3 billion in total economic output.
Donations could also allow 36,000 more students to attend schools of their choice.
Still, Democrats in the General Assembly, the state’s bicameral legislature, have concerns.
Rep. Eliza Hamrick serves Arapahoe and Douglas counties. Hamrick told The Center Square that CSI’s report promises an economic boon, but it ignores the fact that this federal program is a multi-billion-dollar accountability black hole.
“Under Section 70411, Colorado tax-subsidized funds will be funneled through private middlemen who are not required to undergo independent financial audits or report a single data point on student academic progress,” said Hamrick. “Furthermore, because out-of-state organizations can distribute these funds, Colorado is essentially surrendering its fiscal oversight to unregulated private entities in our state and far beyond our state’s reach.”
Hamrick added that redirecting hundreds of millions of dollars without mandatory transparency, accountability or consumer protections is not an educational boon.
“It is a fiscal gamble with taxpayer money and the success of Colorado’s students,” said Hamrick.
Rep. Rick Taggart, R-Mesa, does not see it that way. Taggart told The Center Square that Colorado should encourage participation in the EFTC because it has the potential to bring significant new resources into classrooms and directly benefit local school districts across the state without raising taxes.
“At the same time, we must avoid overregulating this effort at the legislative level,” said Taggart. “The strength of this program is its flexibility and local control, and the legislature should not step in with new layers of bureaucracy that could limit participation or make it harder for schools and families to benefit.”
