Gov. Kathy C. Hochul is planning to put New York into a new federal program that would provide federal tax dollars to eligible organizations that provide scholarships for K-12 students to attend private schools.
She’s doing so over the objections of the state teacher’s union and the leaders of the state Senate and Assembly, but with the support of school choice advocates and those who run the hundreds of private schools across the state.
Starting Jan. 1, the Educational Choice for Children Act will take effect. It will provide a federal tax credit of up to $1,700 for donations sent to private scholarship granting groups that meet certain guidelines and are registered with the IRS. Up to $10 billion in federal dollars can go out per year. States can opt in by sending a list of eligible organizations to the IRS, a process started either by executive action or an act of the state legislature.
The scholarships can also be used for public school students, to cover tutoring, extra technology and after-school programs, but the expectation is that a bulk of the new money will head to private schools. The Joint Committee on Taxation projects that $500 million in credits will be claimed the first year, up to $4.4 billion by 2034.
In New York, Hochul said she was considering putting the state into the program when it was first surfaced in May of this year, pending a review of the program’s finer details. On Friday, her office issued a statement that said she was moving forward with putting New York into the program.
“I’ve been clear from the start that New York would participate in the federal scholarship tax credit program if, and only if, all schools and students, including those in our public schools, could benefit,” she said. “After a careful review of the federal regulations, 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.”
That puts her at odds with the state’s teachers union, which has argued against any programs that send taxpayer dollars to private schools or encourage parents to take their children out of the public schools.
In a statement on Oct. 1, as the details of the program were finalized, NYSUT President Melinda Person said there was plenty of bad policy in the final program.
“The regulations are loaded with poison pills. If New York opts in, the state would be prohibited from setting standards for scholarship organizations, deciding which organizations can participate, or limiting the types of schools and expenses that receive these federal tax dollars,“ she said. ”That means New York could be forced to help funnel taxpayer-subsidized dollars to private schools that have admissions policies and practices that would never be acceptable in our public schools, while being denied the authority to put stronger safeguards around the program.“
Person said the move would be the opposite of local control, and said she was concerned that once a state has moved to comply with the rules of the program they will not be able to disengage easily in the future. She worried it would empower institutions with restrictive or discriminatory admissions policies to benefit from public dollars.
“It is a one-way door into a federally designed voucher program, one that could use public resources to support schools that discriminate, while stripping New York of the ability to provide the protections New Yorkers expect,” she said. “Gov. Hochul should make clear now that New York will not walk through that door.”
The union is also arguing that it will lead to less money available for public schools, because it will encourage parents to pull their children from the public schools. Schools are funded with a complex formula and mix of state, local and federal support that varies by year and by district, but districts in New York receive a set amount of money per student as a part of their funding packages. If students are unenrolled from the school, that money is no longer provided.
On Tuesday, Assembly Speaker Carl E. Heastie, D-Bronx, took the union’s position.
“Public dollars should support public schools that serve all children and are accountable to the taxpayers who fund them,” he said in a short statement “New York should opt out of the federal voucher program and continue investing in the public schools that educate the overwhelming majority of our children.”
On Wednesday, state Senate Majority Leader Andrea Stewart-Cousins, D-Yonkers, took the same position.
“New York should not opt in to this program,“ she said. ”The regulations announced today would undercut New York’s ability to establish meaningful guardrails, leaving the state with little control over which schools and expenses qualify or how this funding is used, and would allow those dollars to potentially flow to schools out of the state.“
Stewart-Cousins said that now, when the governor and legislature have finally established a multi-year trend of fully funding the state’s portion of school operating aid, their focus should be on continuing that effort, maintaining and improving upon the state’s public schools.
“We have an obligation to every student in New York state to make sure they have access to a quality education, and that means continuing to invest in the public schools that serve students in every community across our state,” she concluded.
But school choice advocates and groups that run private schools are glad of Hochul’s decision to opt in. The state’s Catholic Conference, made up of the bishops that run the statewide dioceses and the archbishop of New York, welcomed the news with a statement late Friday.
“Governor Hochul understands that this program does not take a single dollar from public school education funding and it will help thousands of families,” the conference said in a statement signed by all the leaders of the state’s Catholic churches. “Rather than sending this money out of state, she has chosen to keep it in New York to help New York’s kids. While such a decision is common sense from a policy perspective, it nevertheless required political courage and will. A rising tide lifts all boats, and our expectation is that the new tax credit will spur significant giving to new and pre-existing SGOs that provide scholarships to students in our state’s Catholic schools, as well as to SGOs that provide critical support to students in public schools.”
If New York successfully joins the program as Hochul intends to, extra dollars could start flowing to scholarship grantors across the state starting Jan. 1. The process to access those scholarships and apply to private schools will remain unchanged, although groups are likely to adapt and highlight the extra money available for current and prospective students.