As Hochul weighs opting in to tax credit, teachers unions and school choice advocates vie for her ear

Opposing sides of the fight over an optional federal school choice tax credit are doubling down on as Gov. Kathy Hochul weighs whether to officially participate in the first-of-its-kind program. Opponents led by the New York City and state teachers unions rallied in Manhattan Wednesday urging the governor to reject the program. Meanwhile, supporters including charter school advocates sent a letter to Hochul imploring her to make support she signaled in May official. 

Congress approved a novel federal school choice tax credit as part of last year’s HR1 spending bill that offers a $1,700 dollar-for-dollar credit for donations made to qualified organizations offering scholarships to both private and public school students. The tax credit is not a direct voucher program like those run by the state, but serves to fund scholarships or vouchers that promote school choice – a priority for the Trump administration – by incentivizing donations to them. 

The tax credit program would begin in January next year, but states need to individually opt in to participate. It has sparked a fierce battle between school choice and public school advocates. In New York, Hochul hasn’t officially opted in yet, but  in a statement to City & State reiterated her support for the tax credit pending final program details expected later this month.

"Governor Hochul's priority is making sure every student receives an education that best meets their needs, which is why she wants the federal scholarship tax credit to benefit all New York students,” Jonah Allon, a spokesperson for the governor, said in a statement. “These credits have the potential to expand academic opportunity for public and private school students across our state without diverting resources from public schools or state and local budgets. All stakeholders should work together to ensure this program can be implemented to maximize benefits for all New York schools, including our public schools."

Opponents of the tax credit program, who dub it a “voucher scheme,” rallied at the United Federation of Teachers headquarters in Manhattan on Wednesday. Participating groups included the New York State AFL-CIO, NAACP New York State Conference and teachers unions. They argued that using any public funds to subsidize private school enrollment will only serve to harm public schools. 

“This voucher scheme that’s been created here … it’s part of Project 2025,” said Randi Weingarten, president of the American Federation of Teachers, referring to the conservative Heritage Foundation’s controversial political roadmap that includes recommendations for public school privatization and voucher expansions. “But there’s a lot of experience with it across the country. … It is meant to actually take money out of public schools.”

The federal tax credit would not divert any state funds toward scholarships, which preliminary guidance stipulates can be awarded to families making up to 300% of the area median income – or a family of three making over $450,000 a year in the New York City region. However, speakers at the rally said evidence from state voucher programs in other states – especially those with high or no income caps to qualify – have disproportionately helped higher-income families and students with no public school record. “This shift in the One Big Beautiful Bill Act is a fundamental change in how we fund public schools in our country, and it is in exactly the wrong direction,” said Melinda Person, president of New York State United Teachers.

But supporters of the tax credit say that’s not the case. The Robin Hood Foundation, a poverty-fighting nonprofit, co-wrote a letter to Hochul with the New York City Charter School Network sent on Sept. 10 arguing she should stick with opting in to the program. “Opting in does not redirect a single dollar from public school budgets; it opens the door to new philanthropic and taxpayer resources that New York families can choose to direct toward their children's education,” reads the previously unreported letter. 

Other signatories on the letter include United Way of NYC, the New York Immigration Coalition, Citizen’s Committee for Children, Henry Street Settlement and New Visions for Public Schools. “We recognize this is a complicated program, and we share the concerns that have been raised about its design,” the letter reads. “But we believe New York can shape its participation in ways that meaningfully benefit public school students.”

Unlike other state voucher programs, the scholarships funded through the federal tax credit program can be used to benefit public school students, and the credit could cover qualified expenses like books, supplies, tutoring, tech and internet access. 

Despite that, UFT President Michael Mulgrew still doubled down while speaking to reporters after Wednesday’s rally, saying the federal tax credit program would hurt New York public schools despite the fact that it won’t use state dollars  to subsidize private schools. “Project 2025 is pretty clear what they were trying to do with this. … They’ve been very clear,” he said. “They want to privatize the school systems. Period.”

Mulgrew said he and other opponents including Person have spoken with Hochul “throughout constant conversations” to express their concerns about the program. “That’s why we’re just hoping that she continues to have an open mind and hears us.”

UFT and NYSUT have spent money on digital ads to make sure the governor hears them, too. As previously reported in City & State’s Heard Around Town, the unions ran three, 15-second ads on social media attributed through an entity called New Yorkers for Public Schools starting in July. Supporters of the tax credit ran competing ads through a group called Invest in Education Fund.