Democratic Governors Face Pressure to Join Federal Scholarship Tax Credit Program

Democratic governors who have long opposed school choice initiatives are experiencing increasing pressure to join President Donald Trump’s Federal Scholarship Tax Credit (FSTC) program. This pressure arises as states decide whether to participate, and New York Governor Kathy Hochul moves to formally opt in, according to a senior Department of Education official.

Lindsey Burke, deputy chief of staff for policy and programs at the U.S. Department of Education, says that the pressure is real and is likely to encourage all 50 states to opt into the program. Her comments come after proposed regulations were issued by the Department of the Treasury and the Internal Revenue Service on October 1, setting the stage for the first nationwide school choice framework in the United States.

The Department of Education’s deputy chief of staff highlighted that Democratic governors whose party has typically opposed school choice programs might feel compelled to opt into the Federal Scholarship Tax Credit amid New York’s intention to participate.

The initiative, also known as the Education Freedom Tax Credit, permits individuals to claim a federal tax credit of up to $1,700 for donations to nonprofit scholarship-granting organizations (SGOs). However, state governors must officially opt into the program for residents and local educational bodies to benefit from the funds.

More than half of U.S. states have already signed up, as noted by the IRS. Burke stresses that competitive pressure will ultimately force blue states to capitalize on the influx of private donations.

If states like California do not opt in, donors can contribute to scholarship-granting organizations outside their state, benefiting from the tax credit while California students miss out, Burke explained. Education Secretary Linda McMahon previously noted some Democratic leaders’ resistance to the federal scholarship program simply because of its association with Trump.

McMahon highlighted Kentucky Governor Andy Beshear’s concerns that such programs could divert resources from public education, potentially affecting teacher salaries and facility upgrades. Despite initially opposing the program, Kentucky joined after its legislature overruled Beshear’s veto.

Unlike traditional voucher programs, tax-credit scholarships allow taxpayers to redirect part of their federal tax liability towards nonprofit student scholarship funding. The decision remains in the hands of state governors, giving local families access to subsidized scholarship dollars.

Sydney Altfield, CEO of Teach Coalition, told Fox News Digital that the financial motivation embedded in the tax credit is something blue-state governors can’t dismiss.

Governor Jared Polis of Colorado became the first Democratic governor to announce participation in the federal program by late 2025. Polis stated the program could aid families with tutoring, after-school programs, and summer enrichment.

Emma Wallner, spokesperson for Governor Kathy Hochul, confirmed New York’s plans to join the program, becoming the 30th participating state. Wallner stated that Governor Hochul supports the program’s potential benefits for New York students and schools.

Despite Hochul’s intention to opt in, major labor groups and teachers unions remain opposed. A coalition urged Hochul to reject the program, expressing concerns about tax dollars supporting private tuition instead of public education.

For years, school choice initiatives have been contentious among Democrats, who argue they detract from public school systems. Growing parent demand for alternative education and challenges faced by large urban school districts post-COVID-19 pandemic have led to reassessment among some Democrats.

Trump’s landmark school choice program emerges amidst such challenges, and several Democratic leaders are re-evaluating their positions due to shifting educational demands.