Impact of Federal Tax Credit on New York Public Schools

In a move that caught many by surprise, Governor Kathy Hochul announced in May her plan to enroll New York State in the tax credit program under the One Big Beautiful Bill. This initiative aims to support Scholarship Granting Organizations (SGOs).

The program offers a federal tax credit of up to $1,700 to taxpayers who donate to SGOs. These organizations use the funds to offer scholarships, tutoring, and other educational expenses to families earning up to 300 percent of their local median gross income.

An important aspect of this program is its implementation without burdening the state with additional costs. Concerns that this might divert funding from New York’s public schools are unfounded, as funds are sourced from donations incentivized through tax credits rather than direct budget allocations.