Would you refuse hundreds of millions of dollars annually for K-12 education at no cost to your state budget?
That is a decision each of the nation’s 50 governors, who meet in Washington this week, must make this year in response to the first nationwide school choice program enacted last summer.
Included in the new law is a 100% tax credit against federal individual income taxes for donations up to $1,700 annually to not-for-profit scholarship-granting organizations. SGOs then award charitably funded scholarships to students who attend public or non-public schools for use in K-12 education.
This federal tax credit scholarship law also contains a provision that requires each state’s governor to decide whether the law can take effect in their respective states, beginning in fiscal 2027. Specifically, they will decide whether their state’s school children will be allowed to benefit from the scholarships. More than half the nation’s governors have already decided to participate in the program to favor their respective students.
A governor deciding not to opt into the program will only penalize resident students, while taxpayers in the same state will still be able to donate to an SGO in another state that does participate. This scenario will result in a significant transfer of privately funded education dollars going to support students in other states.
Eligible expenses for these scholarships include a wide range of educational uses, similar to the federal 529 program for higher education, including tutoring, books, supplies, fees for extended day programs, special needs services, computer technology and software, and tuition. Through this tax credit scholarship program, families will have greater educational choice and flexibility.
Last June, Becky Pringle, president of the National Education Association, wrongly asserted the federal tax credit scholarship would “redirect public dollars to fund private school vouchers (sic), …weaken public education, and limit opportunities for students.”
Washington State Superintendent of Public Instruction, Chris Reykdal, parroted this falsehood when he claimed the tax credit would be “diverting public taxpayer dollars to private schools.”
Pringle and Reykdal have it exactly backward on all counts. First, the federal program is a tax credit, not a “voucher,” a term about which they are fixated but is wholly inaccurate. Tax credits in this case stimulate private donations, not government voucher spending.
Second, as charitable donations, the federal tax credit program will add private dollars to public schools, strengthen public education, and expand student opportunities in every state whose governor participates. It’s a mathematical certainty.
Incredible as it sounds, opponents of this federal tax credit scholarship have taken the position that would deny teachers, parents, and constituents access to billions of new dollars for K-12 education.
According to an analysis by Education Reform Now, if 30% of the nation’s taxpayers with at least $1,700 in federal income tax liability donate the annual maximum amount to an SGO, another $24 billion would be generated for students in elementary and secondary education. Even if half that number of donors maxed out their annual donation, $12 billion would result.
Currently, governors in 27 states have chosen to participate in the federal program, including Gov. Jared Polis (D-CO).
The federal program will “help bring more educational services to more kids,” Polis recently said. “For some, it’ll be tutoring programs, for others it will be summer learning opportunities, and for others it could be scholarships for school. There are just so many ways for these resources to be used.”
Will the governors who have not opted in yet follow the examples of Polis and 26 of their colleagues and put students first, or will they forgo hundreds of millions of dollars for their state’s students?
To govern is to choose.
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Governors can do right by children, parents, and teachers by enabling their respective states’ students to benefit from this federally induced windfall of private education funds. The choice is obvious.
Peter Murphy is Vice President of Policy at Invest in Education Foundation.