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Audit: Georgia’s education tax credit could save the state millions

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(The Center Square) — Georgia’s Qualified Education Expense Tax Credit could save the state and local school districts millions of dollars in expenses.

However, the Georgia Department of Audits & Accounts could not determine the exact fiscal impact because the “switcher rate” — the number of scholarship recipients who would have attended a public school without a Student Scholarship Organizations scholarship — is unknown.

The state created the QEEC in 2008 with House Bill 1133, which also opened the door to SSOs to manage donations and award scholarships. The QEEC allows Georgia taxpayers — both corporate and individual — to earn a “dollar-for-dollar tax credit” for contributing to organizations that award scholarships to private school students.

In 2022, 18,743 scholarships were awarded, with an average award of roughly $4,400.

According to the audit, if 67% of the students with a scholarship switched from a public school to a private one, the state would save roughly $81 million in public education costs. It would also offset the forgone revenue of $81 million projected for 2021 contributions.

However, if the switcher rate hits 90%, the QEEC will reduce expenditures by roughly $109 million, leading to roughly $28 million in net cost savings.

In addition, with a 67% switcher rate for 2021 contributions, the local savings would hit $24.8 million, but that number could increase to $33.4 million based on a 90% switcher rate.

One leading Georgia lawmaker lauded the audit’s findings.

The “economic analysis by the state of Georgia verifies the incredible costs savings of the program,” Rep. John Carson, R-Marietta, said in an announcement. “Georgia parents already knew that this was an excellent opportunity for meeting their children’s educational needs. Now, we have a true economic analysis which proves the tax credit is also a winner for Georgia taxpayers.”

In 2022, Georgia lawmakers approved House Bill 517 to raise the limit on the state’s tax credit scholarship program and the tax incentives for those who donate to the program.

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