Education (School Choice)

This bill creates a process for Vermont's Governor to maintain an annual list of scholarship organizations eligible for a federal tax credit. It directly affects Vermont taxpayers who donate to qualifying organizations and the scholarship organizations themselves. To be listed, organizations must be nonprofits focused on underprivileged students, provide scholarships only to students at public or eligible private schools, and meet federal criteria. The Governor must submit the list to the U.S. Treasury by December 1 each year, with a presumption that previously listed organizations remain eligible unless the Governor finds noncompliance. This enables Vermont taxpayers to claim the federal qualified education scholarship tax credit (26 U.S.C. § 25F) for donations to these organizations.

This bill (H 770) directs Vermont to opt out of a federal tax credit program that allows states to subsidize contributions to scholarship organizations for school expenses. It designates the Vermont General Assembly as the sole entity authorized to make this election, explicitly stating Vermont "shall not participate" in the program under federal law (26 U.S.C. § 25F). The policy change means Vermont residents will no longer be eligible for state tax credits when contributing to scholarship organizations, as the state declines to join the federal program. The bill takes effect July 1, 2026.

This bill would allow all Vermont students in pre-kindergarten through 12th grade to attend any public or approved independent school of their choice, regardless of where they live. It establishes a "School Choice Grant" funded by redirecting existing education funds that would have gone to the student's home school district to the chosen school. Schools must accept students unless they lack capacity (using lotteries for oversubscription), and cannot deny enrollment based on protected characteristics. The bill also requires a report by the Joint Fiscal Office by 2026 on integrating this program into Vermont's overall education funding system.