Analysis: With school choice tax credit, Catholic schools could rise, but challenges remain

First, the good news: The “One Big Beautiful Bill” — the Trump administration’s signature legislation — creates a new federal tax credit for individuals who make donations to 501(c)(3) public charities providing scholarships to elementary or secondary school pupils, an obvious potential benefit to Catholic schools seeking students.

Now for the not-so-good news: Considered only a partial victory by school choice advocates — the bill lacked universal state adoption measures, limits donation levels and is unclear about religious liberties — there’s also the very real question of supply and demand.

“There’s a lot — even in states with choice — of closed Catholic school buildings that are sitting empty,” commented Shawn Peterson, president of Catholic Education Partners, a national apostolate that advocates for school choice and access to Catholic education.

During the 1964-1965 school year, the nationwide network of Catholic parochial schools served about 5.6 million students. But since then, enrollment has dropped 70 percent, to around 1.7 million students today.

“There’s other issues too — you have to find teachers that can teach in those buildings,” Peterson told OSV News. “It’s not an easy task to just open up a Catholic school. But who’s working on this as a bigger problem? There’s a lot of work to do in this area; there’s a lot of states and dioceses that have not done as well as they could.”

That said, Peterson still finds the current educational environment “an especially interesting time, because in 2025, we’re coming up on the 60th anniversary of ‘Gravissimum Educationis’ — and that’s the document that we who work in the church point to as the reason why we support parental choice initiatives. That’s the document that says parents are first educators — and the state needs to do things to support parents in that choice, including financial support.”

“Gravissimum Educationis” (Declaration on Christian Education) — teaching from the Second Vatican Council issued under St. Paul VI in 1965 — notes, “Since parents have given children their life, they are bound by the most serious obligation to educate their offspring and therefore must be recognized as the primary and principal educators.”

For proponents of school choice, that recognition also extends to parents choosing where and how their offspring will be educated.

“We need to really start looking at the states that have choice,” Peterson advised. “Are we making sure there is a supply there? Are there families that want to access a Catholic school, but there’s not any open seats? Do they live in an area that doesn’t currently have — or has never had — a Catholic school? Well,” he added, “now there’s an opportunity.”

Margaret Kaplow, communications manager for the National Catholic Educational Association, shared some statistics with OSV News.

“Thirty-two states and the District of Columbia provide children the option to attend the public or private school of their parents’ choice through tax credit, voucher or scholarship,” she said. “In 2024, school choice programs expanded in 15 states — 18 percent of Catholic school students utilized a parental choice program, and 31 percent of schools enrolled students utilizing a parental choice program.”

As might be expected, some states perform better than others.

“The arch/dioceses in Ohio, Florida, Indiana, Oklahoma, Iowa and Arizona reported that over 50 percent of their students utilize parental choice programs,” noted Kaplow. “In Florida, 85.7 percent of students are utilizing parental choice programs, compared to 60.1 percent last year. In Ohio, 80.9 percent of students are utilizing parental choice programs, compared to 62.9 percent last year.”

Peterson is optimistic that — with potentially expanded tax funding — those numbers can increase.

“We hope it will energize a lot of states. Not only increase programs or increase access for kids in states that already have school choice, but we’re hoping a lot of the blue states will opt in as well,” he said. “Especially because it won’t cost their state anything; it won’t take any money away from public education.”

“If I were a blue state governor,” Peterson said, “I wouldn’t want a bunch of federal tax dollars leaving my state to help other states; I’d want to keep that in my state to help the children in my state. So we want blue state governors to really take a serious look at that — and decide to opt into the program.”

Still, practical challenges remain.

“There’s a couple of places in West Virginia where they have a vibrant Catholic population, but they’ve never had a Catholic school. And now they have up to $5,500 per child to spend on a great Catholic education — but they don’t have access to a school,” Peterson shared. “It’s sort of like giving someone a $100 gift card for a night out at a restaurant — but there’s no restaurant to spend it at.”

Even states recognized as favorable to school choice can face issues.

“Texas, for example,” said Peterson, “is a place that’s going to be working on the supply side as well. About a million kids are going to be eligible for school in Texas. But in the latest numbers I saw, there’s only 35,000 open seats in private schools. Not just Catholic — all private schools.”

Peterson then asked an obvious — but perhaps provocative — question.

“What are we going to do about being evangelistic, and are we going to open new schools? If there’s a community that wants a Catholic school and the parents have the funds now because of choice, are we going to trust and try to give them a Catholic school?”

In the Diocese of Venice, Fla., Jesuit Father John Belmonte, superintendent of Catholic education, is a one-man school choice promotion squad. Previously a principal in Milwaukee and a superintendent in Joliet, Illinois, he regretfully noted that some dioceses are “chronically uninterested” in school choice.

The Diocese of Venice was established by St. John Paul II in 1984, from parts of the Archdiocese of Miami and the dioceses of Orlando and St. Petersburg, Fla. Its 61 parishes serve a Catholic population of 237,483.

“We have the best tax-credit scholarship program in the country,” Father Belmonte said. “Gov. DeSantis signed into law universal school choice — so I’ve taken advantage of all of this to build our enrollment over the last five years to 40 percent-plus in the diocese. We have the fastest growing Catholic school system in the United States of America.”

In March 2023, Republican Gov. Ron DeSantis signed House Bill 1, expanding available school choice options for all students in Florida by eliminating financial eligibility restrictions and an enrollment cap.

“We’re 15 points past any other diocese in the country in terms of enrollment growth,” added Father Belmonte. “And some of that is driven by school choice. Nearly 100% of our students receive the state scholarship for school.”

Enrollment has risen from 4,400 students to 6,700 students within five years.

“I have communicated with thousands of families over the last five years — basically through a digital platform; text messages and emails that we send out every year to families about these scholarship programs,” said Father Belmonte. “So it’s communication. It’s working with people where they are.”

But that’s not all.

“It’s about leadership. If the leadership in the diocese or the diocesan schools are not interested in this, then it’s very difficult to see the needle move,” admitted Father Belmonte.

“I have the benefit of a bishop here,” he said, speaking of Bishop Frank J. Dewane, “who’s willing to work with me on these things and help us develop our programs. And then I have pushed this into the schools and brought the principals along, so the principals are on board with what we’re doing.”

Father Belmonte was emphatic that for school choice to be successful, “we need leadership from our bishops; we need leadership from our pastors; we need leadership from our principals, our superintendents. We need leadership to make these things work.”

Still, the numbers alone should appeal to any Catholic education leader.

“The new federal tax credit program has the potential to transform Catholic education in the United States of America. It has that potential,” Father Belmonte said. “And again, it’s back to leadership. Either our leaders look at it and understand it — pay attention to it and take advantage of it — or it will go nowhere. It takes a lot of elbow grease to get these things off the ground. So we have the potential there — and I’ll just give you numbers.”

He paused, before laying out the calculus for his own diocese.

“The Diocese of Venice has roughly 250,000 parishioners. You may know people who have to pay the federal government $1,000 in taxes each year; most people would end up owing the federal government that amount of taxes each year,” Father Belmonte hypothesized. “And so if you’re able to convince them to shift their tax liability from the federal government to a school to help with Catholic schools — and you’re able to do $1,000 per 250,000 parishioners — you’re looking at $250 million, potentially coming into a school system.”

He added, “That’s the scale we’re talking about.”

So according to Peterson and Father Belmonte, effective school choice programs require — at a minimum — a combination of access, availability, leadership and communication.

“We actually haven’t done a great job promoting these programs, and making sure that our parents are getting access to them — and that’s a big job,” Peterson suggested. “But that’s going to be the church’s responsibility in our work, going forward. That’s not the responsibility of a legislator or governor. That’s going to be about what we need to do in the church.”

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