'It would never have passed' Some Oklahoma lawmakers say private school tax credit system not operating as expected

OKLAHOMA CITY (KFOR) — Several Oklahoma lawmakers say the way the state is paying out families taking part in Oklahoma’s “Parental Choice” private school tax credit is not how it was described when they voted on the program.

Those lawmakers tell News 4 they were surprised to learn private school families taking part in Oklahoma’s Parental Choice Tax Credit system were receiving their tax credit funds through checks that the state mailed to their kids’ private school, and not through a tax refund.

Some lawmakers say they do not believe the bill which created the tax credit would have passed, if legislators had been told this is how the system would work.

The path Oklahoma Republicans took to getting the Parental Choice Tax Credit Act signed into law in May 2023 was a bumpy one.

It took a lot of compromise between the state’s most powerful Republicans.

“I'm not for tax dollars going to private schools,” Oklahoma House Education Appropriations Committee Chair Rep. Mark McBride (R-Moore) told News 4.

That’s why McBride says he and a number of other Republicans shot down a similar bill in 2022, which would have created a private school voucher system in Oklahoma.

Under that bill, McBride says funding for the voucher system would have come from the state's public education general fund, and families would pay the vouchers directly to their private school of choice.

"The biggest issue, I think, was the funds,” McBride said. “Taxpayer funds were going to private schools."

McBride, and numerous Republican legislators from largely rural districts, voted against the 2022 voucher bill.

As a result, the bill did not pass.

When 2023’s legislative session came, McBride says Governor Stitt made clear he expected the legislature to pass some sort of "school choice" bill.

At one point, Stitt even vetoed all other bills legislators sent to his desk, and said he would continue doing so until the legislature passed a school choice bill.

At the same time, McBride and other legislators were trying to get their own bill passed to raise funding for public schools.

Because of the impasse with the governor, McBride says he and other Republicans chose to compromise.

As a result, the governor signed off on their bill providing $500 million in public education funding, and McBride and his faction voted for the Parental Choice Tax Credit Act, a bill allowing a private school tax credit system to be created.  

Unlike the 2022 voucher bill, the Parental Choice Tax Credit Act created its own $150 million fund for the tax credit system, rather than relying on the state’s public education funds.

"A lot of us didn't like it, you know, but it was better than the voucher bill was,” McBride said. "It was different than just taking money out of the education funding"

McBride says he and his fellow legislators who made that compromise assumed the Parental Choice Tax Credit would work like any other tax credit.

"Myself and my colleagues were under the impression that this would be something that you had filed at the end of the year on your tax return,” McBride said. “And you would have a $5000, $10,000 tax credit on the backside of that."

But News 4 found, that isn't exactly what's happening.

Instead, the Oklahoma Tax Commission is mailing checks in the amount of a student's "tax credit" directly to the private schools they attend, then requiring parents to sign off on the checks.

News 4 found the following paragraph on an Oklahoma private school’s website describing how the system works:

“The OTC produces the checks and eventually send the checks to the school. According to the OTC, there is no definite timetable when OTC sends checks to the school.  According to OTC, they will send checks in batches to the school, approximately once a week.  A batch can consist of one check or many. Because OTC requires families to submit individual applications, the timestamp for each application is different, therefore, the checks for multiple students in one family, according to OTC, will likely be in different batches, potentially weeks apart from one another.”

“When we receive checks, we will notify the primary parent and schedule a time for the parent to come sign the check. We will apply the funds towards tuition in the family's FACTS financial account after the check has been endorsed. If a family has paid tuition in or has paid more tuition than the amount of the tax credit, we will issue the family a refund.”

The Oklahoma Tax Commission (OTC) confirmed to News 4 that is how they are paying out the tax credits.

In a statement, an OTC spokesperson told News 4:

"No checks were issued by the Oklahoma Tax Commission to private schools. While the checks are mailed directly to the private schools, they are made payable to and must be endorsed by the taxpayers."

McBride says this was not the compromise he and his colleagues agreed to when they voted for the Parental Choice Tax Credit Act.

"It would never have passed,” McBride said. “We were all under the impression that at the end of the year when you filed taxes, that you had a tax credit on your tax return."

News 4 reached out to Senate President Pro Tempore Greg Treat, who authored the Parental Choice Tax Credit Act.

His office pointed News 4 to document the OTC published online when it began implementing the Parental Choice Tax Credit system.

The document indicated OTC would pay out the tax credits via checks sent to a student’s private school.

However, that document was first published after legislators had already voted on the Parental Choice Tax Credit Act.

“That was that was something that was never discussed, never mentioned in the bill,” McBride said. “And I think I would think that the authors of the bill would want to change that and fix this as well.”

“I knew going into this that we were pushing this so rapidly that there were going to be serious problems on the on the execution of that on the back end,” said State Rep. Meloyde Blancett (D-Tulsa).

Blancett was one of many democrats who voted against the Parental Choice Tax Credit Act. She says she wants to know which private schools are benefitting from the program the most.

“I think that there needs to be an analysis of that program,” Blancett said. “Which institutions? How much have they gotten? And which of those institutions have increased their tuition as a result?”

News 4 asked the OTC for that data.

In return, the OTC gave News 4 a list of every private school in the state, and several out of state, where at least one student enrolled was benefitting from Oklahoma’s Parental Choice Tax Credit system.  

But, when it came to how many tax credit-supported students each private school has enrolled, the OTC said they don't track that data, and even if they did, they wouldn't be able to share it.

An OTC spokesperson said, since it was an "individual taxpayer credit” system, "the dollar amounts paid out for the credit were directly linked to individual taxpayer accounts," and not subject to Oklahoma’s Open Records Act.

The spokesperson added, "this is a taxpayer credit, not a voucher."

McBride, says that answer doesn’t satisfy him.

“Let's make it all transparent where people can see, where people know what's going on,” McBride said.