Hochul Breaks With Her Party to Opt New York Into Trump's School-Choice Tax Credit

Governor Kathy Hochul announced on October 9 that New York will opt into the Education Freedom Tax Credit, the federal school-choice program created under President Trump's "One Big Beautiful Bill Act," making New York the 31st state to join and only the second with a Democratic governor, after Colorado's Jared Polis. "I'm not going to leave money on the table when it could help our kids," Hochul said in announcing the decision.

The program lets taxpayers claim a dollar-for-dollar federal tax credit, up to $1,700 for individuals and $3,400 for married couples filing jointly, for donations to scholarship-granting organizations. Because the credit reduces federal tax revenue rather than drawing from state budgets, states that opt in are not on the hook for the cost directly. Scholarships funded through the program can cover private and religious school tuition as well as expenses for students who stay in public school, such as tutoring and technology. The program is set to launch January 1, 2027, and in New York will be available to households earning up to 300% of their area's median income, a threshold that works out to roughly $309,000 to $510,000 depending on the region.

State officials project the program could generate $1.5 billion a year for New York if about a third of eligible taxpayers participate. Nationally, the Treasury Department estimates more than 11 million taxpayers could contribute nearly $26 billion annually by 2030, while the Joint Committee on Taxation projects the credit will cost about $25.9 billion in federal revenue over a decade.

Hochul's move put her at odds with her own party's legislative leadership. Assembly Speaker Carl Heastie and Senate Majority Leader Andrea Stewart-Cousins both urged her to reject the program, with Stewart-Cousins warning it "would undercut New York's ability to establish meaningful guardrails" around how the money gets used. The New York State United Teachers union came out strongly against opting in, framing it as a step toward diverting resources from public schools. Republican gubernatorial nominee Bruce Blakeman, meanwhile, criticized Hochul for taking weeks to decide.

Supporters of the move, including Catholic and Orthodox Jewish school advocates and the group Democrats for Education Reform, praised it as a rare instance of bipartisan movement on school choice. The split underscores how the tax credit, written into a Republican-authored law, has scrambled the usual partisan lines on education funding, forcing Democratic governors to weigh the political cost of rejecting money their own voters could otherwise claim.