In the Silver State a child’s education is often determined by their zip code. Unless the families can afford alternatives, students are enrolled in schools closest to their residence, regardless of the school’s ranking or the child’s individual needs. As a result, many children from less affluent backgrounds are stuck in underperforming public with no educational choice.
In 2015, Nevadan lawmakers passed legislation creating the Opportunity Scholarship program (also known as the Nevada Educational Choice Scholarship Program) – an easy policy solution to the status quo that is a win-win both for students and for local businesses. Essentially, the initiative allowed any Nevada business facing a tax liability under the Modified Business Tax to contribute money to scholarship-granting organizations and receive a dollar-for-dollar tax credit. Initially, capped at $5 million annually (adjusted for inflation), the funds were used to provide scholarships for families with household income not more than 300% of the federal poverty level. The scholarships helped finance attendance to private schools while using 95% of total donations for scholarships and minimizing the administrative costs.
After a change in legislative leadership, in 2019 the lawmakers prohibited Opportunity Scholarship from being extended to students who had not been recipients prior. The restriction was lifted in 2021, and later, in 2023 Governor Lombardo proposed to expand the total tax credit that funds the program from $6.65 million to $25 million annually. Instead, lawmakers repealed the tax credit program entirely.
Why Opportunity Scholarships Matter
Educational choice has always been available to families who can afford it. It is children from less affluent backgrounds that benefit from the scholarships. Without the Opportunity Scholarships many students would be trapped in underperforming public schools, potentially perpetuating the cycle of poverty. The Opportunity Scholarship serves as a reminder that every child deserves a chance to receive quality education in a competitive setting.
Additionally, Opportunity Scholarships save significant taxpayer funds. The average scholarship amount ranges from $3,985 to $6,228 per student, but it is only the half of average per student spending in Nevada. In Fiscal Year 2021, the average spending per pupil in public school was $11,471. This means that each scholarship grant results in $4,843 to $7,486 in per pupil savings that can be used to improve the public school system.
The Future of Opportunity Scholarships
The 83rd legislative session features key bills that can shape the future of school choice in Nevada.
AB 364 proposes to modify the existing law to prohibit a scholarship organization from using tax-credit donations for new students or new schools. The bill also mandates that scholarship organizations report to the Department of Taxation if they can no longer provide grants, and requires repayment of unspent donations if they fail to meet the program’s requirement. This limits the benefits of the existing program and prevents expansion.
Conversely, AB 214 proposes expansion of Nevada Educational Choice Scholarship Program by raising the cap on tax credits for donations from $6,655,000 to $30,000,000 in FY 2025-2026, with a 10% annual increase thereafter. If passed it would also expand the tax credit program to include insurers who contribute to scholarship organizations, allowing them to claim credits against the insurance premium tax. The bill would also broaden the eligibility for scholarships to include students with an individualized education program, siblings of previous recipients, children of active-duty military personnel, peace officers, and more.
Nevada is standing at a crossroads determining the future of school choice once again, and it is important that we pick the path ensuring quality education for all children, regardless of their background or zip code.
