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New York will participate in the new federal scholarship tax credit in hopes of generating millions in new dollars for public school students, Gov. Kathy Hochul said Friday.
Hochul becomes the second Democrat — following Colorado Gov. Jared Polis — to voluntarily opt their state into the program, which passed last year as part of the One Big Beautiful Bill Act backed by President Donald Trump. The program, designed primarily to expand private school choice in states without vouchers, also provides avenues to raise money for public school students.
Hochul had already indicated she intended to opt in, but previously said she was waiting for Treasury Department rules to ensure there was no “poison pill” in the program. Those rules, released last week, leave many questions unanswered, but they do lay out ways public school students can benefit, in particular for tutoring.
“After a careful review of the federal regulations, we believe this program has the potential to bring millions of additional dollars to New York students and families without taking a single dollar from public schools or our state or local budgets,” Hochul said in a statement. “I’m not going to leave money on the table when it could help our kids.”
People from across the political spectrum were closely watching for Hochul’s decision. School choice advocates have hoped that Hochul, more so than Polis, can provide both political cover for and political pressure on other Democratic governors who are on the fence.
According to an IRS tracker, 30 other states have opted in. In Kentucky, North Carolina, and Kansas, Republican legislatures overrode the vetoes of Democratic governors to opt in, while other Democratic governors have said they won’t participate or that they’re still reviewing the rules.
The program fulfills a longtime goal of school choice supporters who wanted to use federal taxpayer dollars to help expand families’ options, even in states that are hostile to vouchers. Conservative backers of the policy have been joined by some Democrats, particularly those who supported previous iterations of education reform and public school choice. They say the policy will help families, particularly lower-income Black and Latino families, whose children attend schools that don’t produce strong academic outcomes.
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Starting Jan. 1, individual taxpayers can donate up to $1,700 to a scholarship-granting organization and get a dollar-for-dollar tax rebate from the federal government. Those organizations will then give the money to qualifying families for tuition or other education expenses. Anyone in any state can donate, but for students to benefit, governors of their states have to opt in on an annual basis and allow scholarship groups to operate.
Hochul will not be able to pick which groups can or can’t receive the funding, or prevent scholarship groups from discriminating on the basis of religion or LGBTQ status. Nor can she require that the scholarships can only benefit students from low-income backgrounds. Families earning up to 300% of area median income qualify to participate.
Groups on both sides of the issue had ramped up pressure on the governor in recent weeks. A coalition of civil rights groups and union officials urged her to opt out, while leaders of school choice groups and religious schools encouraged Hochul to make her earlier embrace of the program official.
The reactions to her decision were correspondingly pointed.
“Giving up local control of public education to the federal government through the Trump administration’s private school voucher scheme is a failure of leadership,” United Federation of Teachers President Michael Mulgrew said in a statement. “Gov. Hochul will bear the responsibility, but our students, educators, and families will bear the price.”
Union officials previously indicated that they would not drop their support of Hochul’s November reelection bid if she opted in.
Some supporters of the governor’s decision emphasized that the program could benefit public school students, though the logistics and how much money could be raised remain unclear.
“A student in the Bronx can get the speech therapy or counseling her school can’t afford to provide,” said Nicole Pollock, president of Democrats for Education Reform. “Now the work starts to get these dollars to the families who need them.”
Groups representing families whose children attend religious schools have been especially eager for New York to opt in.
In a letter to Hochul posted Friday by the New York State Catholic Conference, several bishops thanked Hochul for opting in.
“Rather than sending this money out of state, she has chosen to keep it in New York to help New York’s kids,” they wrote. “While such a decision is common sense from a policy perspective, it nevertheless required political courage and will.”
National reporter Lily Altavena contributed to this story.
Chalkbeat is a nonprofit news site covering educational change in public schools. This story was originally published by Chalkbeat. Sign up for their newsletters at ckbe.at/newsletters
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