URGING THE GOVERNOR TO RECONSIDER HIS DECISION NOT TO ALLOW HAWAII TO PARTICIPATE IN THE FEDERAL EDUCATION FREEDOM TAX CREDIT PROGRAM.

SCR158

THE SENATE

S.C.R. NO.

158

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

SENATE CONCURRENT

RESOLUTION

urging the governor to reconsider his decision not to
allow hawaii to participate in the federal education freedom tax credit program
.

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WHEREAS, the
Federal Education Freedom Tax Credit Program, scheduled to take effect in 2027,
provides a federal tax credit of up to $1,700 for voluntary donations to
certified scholarship granting organizations (SGOs); and

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WHEREAS,
scholarships funded through the Education Freedom Tax Credit will be awarded to
"students eligible to enroll in a public elementary or secondary school
and from a household with income not greater than 300% of the area's median
gross income"; and

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WHEREAS,
scholarships can be used for a wide array of education expenses including
tuition for students to attend private schools of choice, tutoring at public
schools, and support services for students with disabilities; and

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WHEREAS, the
Federal Education Freedom Tax Credit Program is funded by private contributions
and the federal tax code, rather than through state appropriations; and

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WHEREAS, the
Federal Education Freedom Tax Credit Program expands options for low- and
middle-income families, while having no impact on state revenues and no
reduction in public school funding; and

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WHEREAS, a
state must opt-in to be considered a "covered state" participating in
the program, and the statute provides the Governor of each state with the
authority to make the election on behalf of the state; and

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WHEREAS, as
of January 27, 2026, twenty-three states have elected to participate in the
program: Alabama, Alaska, Arkansas, Georgia, Idaho, Indiana, Iowa, Louisiana,
Mississippi, Missouri, Montana, Nebraska, Nevada, North Dakota, Ohio, Oklahoma,
South Carolina, South Dakota, Tennessee, Texas, Virginia, West Virginia, and
Wyoming; and

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WHEREAS,
while even residents of non-participating states may make qualifying
contributions to receive the tax credit, the non-participating state and its
students will not receive the benefit of donated scholarship resources;
instead, the donations will be used to benefit SGOs and students in
participating states; and

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WHEREAS, if
Hawaii elected to participate in the program, the State could designate SGOs
supporting students in Hawaii to receive the qualifying donations; and

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WHEREAS, SGOs
must be charities that use at least 90% of their income on scholarships for
education choice options for eligible K-12 students; and

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WHEREAS,
Hawaii reported 52% proficiency in reading and 40% proficiency in math in 2023
with some schools reflecting proficiency rates as low as 12% and significant
disparities for Native Hawaiian and Pacific Islander students; and

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WHEREAS,
opting-in to the Federal Education Freedom Tax Credit Program provides Hawaii's
education system with more financial resources and empowers families with more
decision-making power over their children's education; now, therefore,

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BE IT
RESOLVED by the Senate of the Thirty-third Legislature of the State of Hawaii,
Regular Session of 2026, the House of Representatives concurring, the Governor
is urged to reconsider his decision not to allow Hawaii to participate in the
Federal Education Freedom Tax Credit Program; and

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BE IT FURTHER
RESOLVED that certified copies of this Concurrent Resolution be transmitted to the
Governor and Superintendent of Education.

OFFERED BY:

_____________________________

Report Title:
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Federal
Education Freedom Tax Credit; Governor; Education; School Choice; Scholarships