Democrats and public school supporters must soon decide whether to support a Republican program that could assist some public-school families with costs like tutoring and summer school. However, the program will also allocate taxpayer funds to private schools. Colorado’s Governor Jared Polis was the first Democrat to support the Federal Scholarship Tax Credit, marketed by the Trump administration as ‘America’s first nationwide school choice program.’
‘An obvious decision,’ says Polis of his choice, as the generous tax credit could raise billions in taxpayer donations. ‘I want Colorado kids to benefit from it,’ he tells NPR. ‘I think many other governors would like kids in their state to be the beneficiaries.’ However, many Democrats remain hesitant. Minnesota Governor Tim Walz stated earlier this year, ‘We are not doing it,’ when questioned about joining the program for 2027.
In the middle, 15 Democratic governors and the mayor of Washington, D.C., remain undecided, according to a tracker by Ed Week. They must opt in by January 1 to participate next year.
Jessica Levin, litigation director at the Education Law Center, notes the difficulty for Democratic governors. ‘This is difficult because the policy is designed to create [political] wedges,’ she says. Levin argues it is a Trojan horse: Vouchers intended to bolster public schools could lead families to private schools, ultimately reducing public school funding.
The Federal Scholarship Tax Credit Explained
Starting in January, eligible taxpayers can donate up to $1,700 to a scholarship-granting organization (SGO), which will convert donations into scholarships or vouchers. These will help families pay for educational costs, including private school tuition, tutoring, summer school, and computers. In exchange for a donation, donors will receive a dollar-for-dollar tax credit up to $1,700.
According to the Institute on Taxation and Economic Policy, more than 138 million people may qualify for the full tax credit. The U.S. Treasury Department predicts it could raise nearly $26 billion in donations by 2030. In comparison, the largest federal education funding source, Title I, provided over $18 billion in 2023 to assist low-income students.
Among the 31 states signed on, most are Republican-led. Only New York’s Governor Kathy Hochul has joined Polis among Democrats. In Kansas, Kentucky, and North Carolina, Democrats resisted the program but were overridden by Republican legislatures.
If governors do not opt in, taxpayers can still donate to SGOs and receive tax credits, but families won’t qualify for scholarships. Governors opting in for 2027 can choose to opt out in 2028 or vice versa.
Facing Practical Choices
Some Democratic governors and public education advocates face a tough choice: oppose the scholarship program on principle or encourage public school participation to benefit from it. The Southern Education Foundation (SEF) chose to pivot. ‘The question became less about agreement with the program and more about its progress,’ said SEF President Raymond C. Pierce in a press release.
‘We’ve always promoted public schools and oppose private school vouchers,’ says Fred Jones Jr., SEF’s senior director of public policy and advocacy. SEF is now creating an alliance of SGOs focused on raising funds for public school students. ‘If we have tutoring, afterschool programs, and summer learning, public school students could benefit greatly,’ Jones states.
Deborah Gist, former superintendent of Tulsa Public Schools, founded Future School Fund to support public school students nationally. ‘I read the bill and saw public schools included, so I started thinking of funding possibilities for them,’ Gist remarked.
Despite help from organizations like SEF and Future School Fund, public schools in opt-in states face challenges. Many states already have state-level tax credits favoring private school funding, and few public schools have public-school-oriented SGOs. As Levin explains, private schools have the SGOs, infrastructure, and advertising budgets, so public schools must act quickly.
Adjusting to the New Landscape
Public schools seeking to benefit from the tax credit need to determine which services they offer might qualify for reimbursement. ‘You can’t charge a fee for math class,’ says Marguerite Roza of Georgetown University’s Edunomics Lab. The program allows reimbursements for education services usually covered out-of-pocket, challenging public schools already obligated to provide free education. Public schools may consider charging fees for field trips, assemblies, tutoring access, and aftercare to qualify for reimbursement, but Levin warns against it, emphasizing the importance of fully funding public schools.
According to Roza, the tax credit is ‘a convoluted, circuitous way’ to raise funds but suggests districts partner with public-school-focused SGOs and involve employers in promoting donation options. ‘Districts must participate to receive money, or they won’t get any,’ Roza warns.
Addressing Disparities
Even with all the right measures, wealthier public schools will have an edge. Jon Valant of the Brookings Institution points out that wealthy communities have access to more local funds. ‘If donation patterns for this program resemble other programs, wealthier areas will gain more,’ he says.
Brookings researchers predict wealthy counties will raise about three times the money compared to poorer counties. To benefit lower-income, rural areas, reliance on donations beyond wealthy communities is necessary but unlikely. The program includes most students, with the Treasury estimating roughly 95% of students could qualify.
‘Families earning half a million dollars are eligible,’ Valant asserts, warning, ‘the program might become like Title I for rich kids.’
The decision to participate remains challenging for undecided Democrats. Fred Jones Jr. of SEF recommends opting out, but in the South, most states have opted in. He emphasizes the importance of making a conscious effort to raise funds for public school students, lest private schools claim the majority of funds.
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