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Democrats weigh Trump school vouchers, with billions at stake
~education~newsusataxes
www.washingtonpost.com 4 weeks agoTildes

Summary

Blue states have long rejected school vouchers as bad for public schools and bad for taxpayers. Now the nation’s first federal program is making an offer that Democratic governors may find hard to refuse.

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If governors opt in to the program, tax dollars will go toward private school tuition for children in their states, something many Democrats are uncomfortable with. But if they say no, their states will lose out on a new bottomless bucket of federal cash that could help public school students, too.

Twenty-eight governors have said they will opt in, including all but one Republican (who remains undecided), according to tracking from EdWeek, a news organization that covers education. Two Democratic governors have said their states will participate, and four have said they won’t, but most have ducked the question, as pressure rises from all sides.

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These tax credits, including the new federal version, incentivize taxpayers to donate money to scholarship granting organizations, or SGOs, which then give money to students.

Starting in 2027, donations up to $1,700 to SGOs will qualify for a dollar-for-dollar tax credit. That means that as long as donors owe at least $1,700 in federal taxes, they will see their tax bill reduced by the amount of their donation. In essence, taxpayers are directing money they owe in taxes to these SGOs rather than to the government. The Joint Committee on Taxation estimated that the program will cost the federal government $25.9 billion over 10 years.

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The Treasury Department has said it anticipates that states would not be able to pick and choose which SGOs they want to allow — meaning that states that want to opt in to taxpayer-funded donations for public school students would have to allow private school scholarships, too — and vice versa.

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Undecided governors say they are waiting for the Treasury Department to issue rules detailing how the program will work. Those are expected by this summer.