From the estimates of maximum possible contributions, CSI estimated the range of likely revenue estimates.
Range of Likely Contributions to SGOs
With a high-end estimate of $3.3 billion in tax-deductible contributions, what might a mid-range impact be? To gauge this, CSI looked at states with current policies similar to the newly established ECCA to estimate the likely investment taxpayers will be making. Per the National Conference of State Legislatures (NCSL), 18 states have a state tax credit scholarship program.[xii] Colorado is not one of them. Additionally, NCSL lists three states with a program similar to a tax credit scholarship program—Florida, Missouri, and Utah—tax credit ESAs.
States with Programs Similar to the ECCA
The following map shows NCSL’s accounting of states with either a tax credit scholarship available (18 states) or a tax credit ESA (3 states). As mentioned, Colorado does not offer either option to households.
Figure 3:
Contributions to SGOs
Perhaps the best indication of how much Coloradans will give to SGOs to expand the learning opportunities and environments for children in the state is by looking at how much parents, grandparents, friends, and the population overall gives to tax credit scholarship granting organizations in other states. Of the 18 states, the two states that appear closest in substance to the new ECCA are the tax credits in Arizona and Georgia.
- Arizona: Arizona’s is closest in nature because it uses the same basic structure: private donor gives to an STO (School Tuition Organizations), which then in turn invests in students through tuition scholarships. If one combines the original credit and the switcher credit, Arizona’s cap will be approximately $1,600 (single filers) to $3,200 (married filing jointly filers) in 2027.[xiii] For married filers, this is almost double the new federal credit of $1,700 per tax filer. In FY 2024, Arizonans contributed over $238 million to student tuition scholarships.[xiv]
- Georgia: Georgia’s Qualified Education Expense Tax Credit allows taxpayers to receive a credit for donations to approved Student Scholarship Organizations (SSOs) that provide scholarships for private school tuition. Individual taxpayers may claim credits of up to $2,500 for single filers and $5,000 for married couples filing jointly, while corporations may claim a credit equal to 75% of their Georgia income tax liability. The credit is non-refundable and unused credits may be carried forward for up to five years.
Given that Georgia’s tax credit was all used up to the maximum cap, Arizona’s experience is likely more indicative of what Colorado may see. Using a per filer figure for Arizona and applying it to Colorado on a relative population basis would equate to Coloradans investing in future generations’ education to the tune of $223 million annually. It is worth noting that this is likely the low end of the estimate because federal tax liability is much higher than any state’s income tax burden, and as such, taxpayers have tax liability at the federal level that they wish to lower—and the ECCA does just that.
With this background, the following table shows how much the contribution amount would be from Coloradans to SGOs if contributions reach 1%, 5%, 10%, 15%, and 20% of the maximum contribution amount. If Arizona’s experience is indicative of Colorado’s, and considering the fact that federal tax liability is greater than state tax liability, the rate of participation in the program will probably be somewhere between 5% and 15% of the maximum, or between $164 million and $493 million.
Figure 4:
|
Contributions as a Share of the Maximum
|
Revenue
|
|
1%
|
$32,870,000
|
|
5%
|
$164,360,000
|
|
10%
|
$328,730,000
|
|
15%
|
$493,090,000
|
|
20%
|
$657,460,000
|
Students
The second step is to estimate the number of students in the state who: (1) currently attend private schools and (2) who may attend private school as a result of the ECCA.
As the first step in the analysis of student enrollment trends, the following figure 5 shows student enrollment this school year by the four main types of instructional learning environment. The most prevalent continues to be regular district schools, capturing about 80% of students, followed by charter school students at about 12% of students, private school students at about 7%, and homeschool students at about 1%.
Figure 5:
The Potential Gain in Private School Students
The 2025-26 snapshot provides the current view of students attending private schools. By offering parents greater choice for their children, more parents may choose to place their children with a private school provider. With 7% as the floor (there are currently approximately 7% of students in private schools), the number of new students that may seek a different education environment may range from approximately 3,300 (from 6.7% to 7.0%) to 36,000 (from 6.7% to 10.0%). If more students than expected take advantage of SGO availability, potentially approximately 90,000 students may choose a private education environment.
Figure 6:
|
Share of students participating in the ECCA
|
Number of new students in private schools
|
|
7%
|
3,361
|
|
10%
|
36,000
|
|
15%
|
90,400
|
Revenue to Private and Public Schools
The ECCA allows for many forms of spending on schools, including, but not limited to:
- Tuition and School Fees
- Private or religious school tuition and courses from public schools requiring fees.
- Public and private school fees, uniforms, and required charges, which comprise:
- Dual enrollment courses
- High school students taking college courses through a public school partnership.
- Advanced Placement (AP) courses or exam fees
- Public-school extracurricular or extended-day academic programs.
- Public-school summer or remediation programs
- Tutoring provided by a public school or district program.
- Special education services provided through public schools.
- Technology or instructional programs offered by a district.
- Other enrollment-related costs
- Instructional Materials
- Books and textbooks
- Educational supplies
- Homeschool curriculum materials.
- Academic Support Services
- Tutoring
- Dual enrollment courses
- AP exams or other testing fees
- Extended day or after-school academic programs
- Technology and Online Learning
- Computers or educational devices
- Educational software
- Internet access used for schooling
- Special-Needs and Therapy Services
- Speech therapy
- Occupational therapy
- Behavioral therapy
- Other special education services
- Transportation
- Transportation to school or educational programs
- Homeschooling Expenses
- Curriculum, including purchases of curriculum from public schools.
- Learning materials
- Other instructional costs associated with homeschooling.
Of the previously mentioned $164 million to $493 million in new revenue to public and private schools, some portion will go towards private schools, and some will go towards public schools. The share is unknown. One thing is certain—contrary to state tax credits that are targeted towards private school tuition, the list of items eligible is much wider with the federal tax credit, operating more like an Educational Savings Account than a pure tuition scholarship program. Most of the categories eligible for spending would have both public and private providers. The following figure 7 represents the amount of additional revenue to public schools depending on the share of overall new revenue made available through the ECCA. Overall, if public education providers were to only capture 20% of the new money, public schools would see an additional $66 million in new revenue. At a public school share of 20%, that would leave new additional revenue to private education providers of $263 million.
Figure 7:
|
Revenue to Public Schools Based on the Share of Additional Revenue ($329 million)
|
|
85%
|
75%
|
65%
|
50%
|
25%
|
20%
|
|
$279,650,000
|
$246,750,000
|
$213,850,000
|
$164,500,000
|
$82,250,000
|
$65,800,000
|
The Economic Impact on Colorado
With this background, how might the ECCA impact Colorado’s current and future economic picture? On its face, there is at least one direct impact. By offering a one-for-one tax credit, the ECCA allows individuals to generally keep money within Colorado rather than sending it to the IRS. Some of the taxes paid may have, through the federal appropriations route, made it back to Colorado, but that is up to Congress and the President. This difference—keeping money local versus sending money out of state—has a direct economic impact. The secondary effects of the direct economic impact, such as the potential for better student achievement and the potential for higher productivity, may also impact the state’s economic trajectory.
To model the economic impact, CSI employed REMI Tax PI+’s output variable for private education and, separately, for public education using an 80%/20% split. This equates to new money staying within the state and invested in education options as opposed to paying higher tax burdens to the IRS. The following figure 8 has the results.
Overall, by keeping more money in Colorado—in particular keeping it in both public and private education—as opposed to sending the money to the IRS, Colorado’s economy benefits. Over the five-year period from when the program starts (2027) through 2031, the economic impact includes:
- A boost to jobs of, on average, approximately 8,000 annually.
- Cumulative gain in GDP of almost $5.2 billion.
- An increase in output, or business sales, of almost $8.3 billion.
- A boost to personal income of over $3.7 billion. That equates to an additional $600 for each Coloradan.
Figure 8:
The impact is most strongly felt in the sectors most closely connected with education services and development of the physical infrastructure for educational services, including educational services; state and local government; construction; professional, scientific, and technical services; and retail trade. The first four are self-explanatory—more revenue to education service providers equates to more wages for teachers and support staff and more demand for construction and professional support services to education providers. The retail trade impact stems from the additional spending across the economy stemming from the additional money staying within the Colorado economy. The following figure 9 shows the impact on wages for the top 10 most affected sectors. Wages for teachers represent the largest component of the top two sectors in the following figure. When adding the amount of wages from 2027 to 2031, total wages paid to (mostly) teachers sums to over $1.1 billion.
Figure 9:
Bottom Line
Overall, Colorado stands to benefit from opting to take part in the new money generated from the federal “Education Choice for Children Act”. Should Coloradans decide to contribute 10% of maximum possible contributions that could be made, Colorado will be investing $329 million in additional educational learning environments for public and private education students. The economic impact from this is wide, generating almost $8.3 billion in impact.