Governor Kathy Hochul is opting New York into a federal school choice tax credit. It's a program favored by private and religious schools. But teachers unions aren't fans of the program created under the One Big Beautiful Bill Act.
Read the full transcript below:
Lucas Willard: This is Northeast Notebook. I’m Lucas Willard. School choice has become a pillar of national Republicans’ platform. In January, a new federal tax credit will go into effect to expand private school options. The program, called the Education Freedom Tax Credit is proving popular among Republican governors, but it faces resistance in Democrat-led states. However, New York Governor Kathy Hochul just opted in to the program over objections from teachers unions. So why is this school choice tax credit program controversial? And does it signal a monumental change in federal education policy?
Created under the One Big Beautiful Bill Act signed by President Donald Trump in 2025, the Education Freedom Tax Credit is big news for private schools. The U.S. Department of Treasury and IRS estimate the program could generate billions of dollars to support millions of scholarships for K-12 students. To help explain how it works, I spoke with Alex Zimmerman, a reporter for the education-focused publication Chalkbeat.
Alex Zimmerman: Any eligible taxpayer can donate up to $1,700 to a scholarship-granting organization, which can then, in turn, use that subsidize private schools for students, and it could also work to subsidize services for public school students, whether that’s tutoring or special education services, things like that…
Lucas Willard: So, as a tax credit, donors would get up to $1,700 back on their tax returns. The money collected by the scholarship granting organizations, or SGOs, has few restrictions on where it could go.More than two dozen Republican governors have embraced the program, but only two Democrats have signaled their support: Governor Jared Polis in Colorado and New York Governor Kathy Hochul.
Alex Zimmerman: If you ask Hochul, she will say, like, it doesn't make sense for me to just leave money on the table, right?
Lucas Willard: Hochul, who is seeking re-election this year, issued a statement in October. She said, “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."
Alex Zimmerman: When Hochul first suggested she was going to opt the state in, she did so to a group that represents Jewish religious schools, and so I think she was trying to signal to private school communities, religious private schools, that she was open to this policy, and she is in the middle of a re-election campaign. And so, you know, I think there were some observers who saw that as a way of shoring up like religious voters and Orthodox Jewish voters, since yeshivas, among other religious groups and Catholic schools, could benefit from this. You also saw the teachers union, both the state teachers union and New York City's teachers union, create a pretty aggressive lobbying campaign to try to prevent her from opting in.
Lucas Willard: Trump administration officials are hailing the program as transformative. U.S. Education Secretary Linda McMahon said, “Education freedom is the key to unlocking opportunity and success for our next generation of students.” But Melinda Person, president of New York State United Teachers, characterized the tax credit as a “gamble.” She said in a statement, in part, “New York would put its name on this program while Washington controls the rules.” She also worries about the tax credit failing to benefit public school students. To better understand concerns over equity, I spoke with Jack Schneider. He’s a professor at the University of Massachusetts Amherst and director at UMass’s Center for Education Policy.
Lucas Willard: Now, what about the argument for public schools? They could use this by partnering with after-school tutoring or sports programs or something that helps take the pressure off of the public school budget by allowing the district to partner with private organizations to provide opportunities that would be supported by this fund...
Jack Schneider: That's absolutely allowed, and if the law were written in a manner that either restricted the use of those funds, so that it would strengthen public schools, where roughly 90% of young people in this country are enrolled in school right now, or if states had the ability to tailor the program themselves, I think that opposition would be much less strenuous.
Lucas Willard: Jack sees the tax credit as a culmination of years of work from lobbyists and interests that have become aligned with the Republican party to privatize the U.S. education system. And for states, he explains, you’re either “in” or you're “out” on the new tax credit.
Jack Schnieder: And if you are in, then yes, you can raise money for your local public school. You can bring in after-school tutoring to supplement what the school is doing...but you can't stop money from going to private schools. You can't stop money from going to whatever might qualify as an educational service, and you definitely can't limit the dollars that are flowing to particular families, many of whom we know from the experiments with private school vouchers in many states, are going to be families who have never sent their kids to public school.
Lucas Willard: While private school vouchers have appeared on the ballot in several states, voters have been skeptical. Jack sees the Education Freedom Tax Credit as a way of changing minds.
Jack Schneider: Anytime we have seen private school vouchers on the ballot as referendum measures, they've lost...even in states where Donald Trump was on the ballot and won by a landslide. So, we can look to states like Kentucky for examples of this. If you have a thriving public education system in, say, Massachusetts or New York, and then you have a private school voucher program in nearby New Hampshire, then you run the risk that residents will begin to view private school vouchers as a boondoggle, as something that stripped them of their public schools. Whereas, if you can bring privatization to blue states as well, then you reduce the risk that people are going to believe that the grass is greener in other states where they still have a thriving public education system, and you can begin presenting this as the new normal.
Lucas Willard: And, Jack fears, as of right now we are now at a “tipping point” for the sustainability of American public education. And due to the rules of the tax credit program, he thinks it could open the door for scholarship-granting organizations and private schools to make lots of money off the backs of taxpayers.
Jack Schneider: Schools are not resource rich. Schools are very lean organizations that are already operating without a lot of the things that they would like to have, and in some cases, some of the things they need to have. This presents a different opportunity because you can send a virtually unlimited amount to a school or a service provider, and that creates tremendous opportunity for profit making.
Lucas Willard: While the Education Freedom Tax Credit is a major victory for President Trump’s Republican party, school choice and privatization were not always GOP priorities. The Chalkbeat’s Alex Zimmerman compares what’s happening now with efforts in George W. Bush’s first term in the early 2000’s.
Alex Zimmerman: Like the No Child Left Behind era, where there was a real focus on aggressive interventions and improvements for traditional public schools. We're definitely seeing kind of more of a direction toward giving families options and shifting the conversation away from public schools, like entirely, to some extent.
Lucas Willard: And, as the January 1st implementation date approaches, Alex has been asking public schools in New York City how they might consider taking advantage of the tax credit.
Alex Zimmerman: They haven't said much publicly yet. I've talked to some other advocates in the public school space and I had an interesting conversation with someone who was suggesting that the mayor could announce a partnership with corporations, and basically have them say, “We're encouraging our employees to donate to an SGO that is sort of public school aligned” as a way of sort of generating PR for the companies, but getting more of these $1,700 donations kind of at a larger scale.
Lucas Willard: And that's a big change in thinking for public schools.
Alex Zimmerman: Private schools, obviously have more robust fundraising operations already in place, and so I think there is some concern that there's already an infrastructure there to try to funnel this money. And public schools generally don't have that same kind of infrastructure, at least geared toward like regular taxpayers, right?
Lucas Willard: This episode of Northeast Notebook was produced by me, Lucas Willard. Thanks to out editor Diane DeVore. Music by Eduardo Rivera. You can subscribe to this show as a podcast. I'm Lucas Willard. Thanks for listening.
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