Senator seeks to overturn Freedom Tax Credit opt-in
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State Democrats' newly restored veto-proof supermajority may get a test next year over New York's opt-in to President Donald Trump's Education Freedom Tax Credit program.
Gov. Kathy Hochul opted into the program in October, joining several other states. Not all Democrats in the state Legislature are happy with the move, however, including Sen. John Liu, D-Bayside. Liu recently introduced S.10734, which would amend the state Education Law to designate the state Board of Regents as the sole entity responsible for determining whether New York state will participate in the program as well as requiring the Board of Regents to determine and submit the state’s list of qualified scholarship granting organizations to the federal government.
If passed, Liu's legislation would give the Board of Regents the authority on an annual basis to decide whether New York would participate in the voucher program beginning with the 2028 tax year. Liu had opposed the program before Hochul opted New York into the program.
"However the Trump administration may spin it, this tax credit is a federal voucher program, an idea long debated and rejected in the state of New York because it inevitably diverts resources away from public schools. Though public schools may receive some of the donations eligible to be refunded as tax credits, the clear intent is to subsidize private schools, with the public education funding already cut by the administration. New York should not buy into this terrible policy, advanced by a now lame-duck administration, which has some likelihood of being reversed in the near future," Liu said. "Regardless of what the political arguments may be, this program is a matter of education policy best decided by the state Board of Regents which for over 200 years has set policy for all schools in New York State in a manner largely shielded from the prevailing politics of the times. This legislation appropriately places this matter in the hands of the Board of Regents."
Nearly all schoolchildren in at least 30 states can apply for a new federal scholarship next year to help pay for private school, homeschooling and other educational expenses, according to regulations proposed Thursday by the Trump administration.
The first national school choice scholarship program, the Federal Scholarship Tax Credit, will launch Jan. 1, establishing a taxpayer-funded incentive for families to choose private or homeschooling in participating states. Taxpayers who donate to an organization passing out the scholarships will receive a federal tax credit, a perk expected to further fuel the conservative school choice movement. Taxpayers will have the chance to donate to a scholarship program in a participating state, even if they do not live there, starting Jan. 1. Individuals can donate up to $1,700 and receive a federal tax credit for the same amount in exchange. Federal officials propose a couple filing jointly could give as much as double that amount. Scholarship organizations in each state would decide how much to grant to each child who applies, depending on available funds and student need. Children could qualify if they are in elementary through high school and their families earn up to three times the area's median income. For a family of four in Houston, for example, that equates to more than $300,000.
Scholarship recipients could use their funding to pay for religious or private school tuition, homeschooling costs, tutoring and special education therapies, books, computers and other expenses connected to enrollment or attendance, according to officials at the Treasury Department. States could not turn to laws or regulations to narrow the uses for the scholarships or the type of organization that can grant them, federal officials said. But states can choose whether to participate in the program. More than 30 states have signed up to participate, including New York.
Fellow Democrats Jabari Brisport, Liz Krueger and Robert Jackson have signed on as co-sponsors of Liu’s bill while Gov. Kathy Hochul has agreed to opt New York state in to the program – setting up a potential veto showdown if enough Democrats in the state Legislature agree with Liu, Brisport, Krueger and Jackson.
"The federal education tax credit program is a wolf in sheep's clothing, a voucher program in disguise that will funnel taxpayer money to private schools and leave our public schools, and the children they serve, worse off. The program rules, written by the Trump administration with no opportunity for states to make changes, will prevent New York from ensuring that those most in need will benefit, and risk siphoning off students - and the funding that goes with them - to far less accountable non-public institutions. This is a decision that should be made by the experts at the Board of Regents, not based on political motivations," Krueger said.
Hochul said in October that her administration had reviewed the federal regulations and determined Trump's scholarship program could bring millions of additional dollars into the state without taking money from public school budgets.
"I'm not going to leave money on the table when it could help our kids," Hochul said in October. "That's why I have also been directly engaging with business leaders, who have committed to use this program to support public school students and their academic needs."