SB 462 is a bill now moving through the New Mexico Legislature that would set up a system of tax credits to provide scholarships allowing low-income K-12 students to pick the school of their choice. This legislation has been introduced by Senator James Taylor. The credits and scholarships for children would work as follows:
- Individual tax credits could be taken against New Mexico income tax burden. Individuals could take a $500 credit while married couples filing jointly could take a $1000 credit;
- Businesses could take a credit against their New Mexico corporate income tax burden;
- Businesses and individuals would donate their credited money to a scholarship organization of their choice;
- Scholarship organizations which receive donations from taxpayers receiving the credit would be 501c3 non-profit organizations;
- At least ninety percent of the scholarship organization’s revenue from contributions would have to be spent on educational scholarships, while all revenue from interest or investments would be spent on educational scholarships;
- Scholarships would be granted on a random basis with preference to siblings of students already in the program, but once a student is eligible for the program, they remain eligible until they graduate or turn 21 (unless they move out of state);
- Students would be eligible for the scholarships if their family is eligible for the federal government’s reduced-price lunch program, thus the program targets low-income students and those most likely to be in under-performing public schools.