A federal school tax credit program New York Gov. Kathy Hochul has said she’ll opt in to is raising alarms among public school advocates and registered voters across the state.
The Education Freedom Tax Credit is part of the Trump administration’s “big beautiful bill” passed last year and aims to provide scholarships for education-related services at private or public schools.
While the Trump administration says the program will generate an additional $24 billion in education funding annually and won’t divert money from local or state taxes, New York State United Teachers (NYSUT) members are concerned it will take money away from public schools and drain billions from state revenues.
According to Hochul’s office, New York is expected to join the 27 other states that have already opted in to the program despite the recent pushback.
“Governor Hochul is supportive of the federal tax credit scholarship and its potential to help New York students and schools,” the governor’s office said. “Our office awaits information from the federal government on the program and will thoroughly review the details of the policy for poison pills that could harm New York’s education system.”
Here’s what to know.
How the federal school tax credit program works
If New York joins the opt-in program, taxpayers looking to receive a federal tax credit of up to $1,700 must first make a charitable contribution to a state-approved charity that uses at least 90% of its income on scholarships for education choice options for eligible K-12 students, or Scholarship Granting Organization (SGO), according to the U.S. Department of Education.
After receiving the funds, the SGOs use the money to provide elementary and secondary school students within the state scholarships to attend a school of their choice or provide access to other education-related services and products. The amount of scholarship money awarded will be determined by the SGO and there is no limit on how much they can provide.
“These scholarships are expected to empower families to select the schools, learning services, supports, or materials best suited to their children’s needs,” the Department of Education says.
When it comes time for state taxpayers to file their annual federal income tax return, they would then receive a credit against their tax owed up to $1,700 and have up to five years after to use up the entirety of the credit. The program takes effect on Jan. 1, 2027.
How would New Yorkers benefit from the federal school tax credit program?
New Yorkers who are U.S. citizens or residents, make the qualified contribution to an SGO and are from a household with an income not greater than 300% of the area’s median gross income may qualify for the program, the Department of Education says.
Those eligible can then use the scholarship money for a number of school-related benefits, including private school tuition, public school tutoring and support services for students with disabilities.
The Trump administration says every $1 billion in scholarships could fund tuition for 77,000 students or cover tutoring for more than 300,000 students nationwide.
“Most importantly, these scholarships will empower parental involvement in their children’s education, which is one of the most powerful forces positively affecting student achievement,” the Department of Education added.
How could the federal program negatively affect NY’s public schools?
NYSUT, which represents nearly 700,000 people who work in, or are retired from, New York’s schools, colleges, and healthcare facilities, has expressed several concerns about the federal program.
According to the union, the program is estimated to drain around $2.3 billion from state revenues over the next decade, with New York expected to take a huge hit. School vouchers, which NYSUT asserts this is, redirect public tax dollars to pay for private school tuition and defund public schools because when students leave with vouchers, the public school loses that per-pupil funding but their fixed costs remain the same, they say.
And the income limit, which NYSUT says is more than $500,000 in parts of New York, makes the program “less an education program than a tax break for the wealthy.”
“School vouchers are a failed policy,” NYSUT says. “They don’t improve academic outcomes. They create a two-tiered system that rewards the already-advantaged, strips rights from vulnerable students, and drains the public schools that unite our communities.”
And a recent statewide poll conducted by Lake Research Partners in mid-June reveals a majority of registered New York voters oppose Hochul opting the state into the program. After learning more about the program, 57% of New Yorkers are against opting-in, according to NYSUT, and with 38% strongly opposing it.
The poll also shows that 55% of the 800 registered likely 2026 voters who responded to the survey agree public dollars shouldn’t be used to fund someone else’s private school decisions, 46% believe opting in to the program will raise property taxes and 52% are concerned it will weaken New York’s public schools.
“New Yorkers know the value of their public schools, and they know a bad deal when they see one,” NYSUT President Melinda Person says.
“This poll confirms what we’re hearing across the state: voters don’t want their tax dollars drained from neighborhood schools to subsidize tuition for families already enrolled in private schools,” she continued. “We are listening to New Yorkers and we hope Gov. Hochul will too.”
Emily Barnes covers state government for the USA TODAY Network-New York with a focus on how policy and laws impact New Yorkers’ taxes, communities and jobs. Follow her on Instagram or X @byemilybarnes. Get in touch at ebarnes@usatodayco.com.
This article originally appeared on Rockland/Westchester Journal News: Why Hochul is clashing with teachers over Trump’s school tax credits
Reporting by Emily Barnes, New York State Team / Rockland/Westchester Journal News
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By Emily Barnes, New York State Team | USA TODAY Network
