A top Education Department official says Democratic governors who long fought school choice will face real financial pressure to join President Trump's federal scholarship tax credit, or watch donor money and student opportunities leave their states.
Lindsey Burke, deputy chief of staff at the Department of Education, told Fox News Digital that competitive pressure from the Federal Scholarship Tax Credit program is already building on holdout states, and she expects it to push all 50 to participate.
Governors must formally opt in before residents and local scholarship groups can fully take part. More than half of U.S. states have already signed up, according to an IRS report described in the coverage, while New York Gov. Kathy Hochul is moving toward joining and Colorado's Democratic governor has already done so.
The design is simple and hard for blue-state leaders to ignore. Taxpayers can claim up to a $1,700 dollar-for-dollar federal tax credit for donations to nonprofit scholarship-granting organizations. Those groups then fund student scholarships. If a state refuses to opt in, its own donors can still give out of state and keep the credit, leaving local students without the benefit.
Burke framed the choice in plain terms. States that sit out will see money and opportunity flow elsewhere.
"I think that pressure is real and is going to encourage all 50 states to ultimately opt in."
She used California as the example. Donors there could still support scholarship groups in participating states and receive the federal credit. California students would get nothing from those gifts unless Sacramento opts in.
"If you're in California, for example... a donor will be able to donate to scholarship-granting organizations outside of California, and they will get their tax credit as a result of that."
"So, unless a state like California decides to opt in, then they're going to have donors donating outside of their state and their students in California not benefiting."
That structure separates the program from traditional vouchers that pull directly from local public-school budgets. The credit is federal. The donations go to nonprofits. Parents get more options without a city or state cutting a check from its education fund.
Parents across the country have already been voting with their feet, from Silicon Valley families turning to AI-driven homeschooling to households seeking any workable alternative after years of weak results.
Colorado Gov. Jared Polis became the first Democratic governor to announce his state would participate in late 2025. Colorado then formally opted in. He told local media he "would be crazy not to" join.
Sydney Altfield, CEO of Teach Coalition, said the money trail is the point. She told Fox News Digital that Polis has every incentive to welcome donors from states that refuse to participate, and that New York has the same opening.
"I think even just today there might have been a news article where Gov. Jared Polis from Colorado is calling on blue states not to opt in so that he can take their money."
"That's a great opportunity for states like Colorado, and hopefully Gov. Hochul is right behind him. If other blue states don't want to opt in, I can only imagine that Gov. Hochul is going to do everything in her power to get more money into the state. She always says she wants to put money back into the pockets of New Yorkers, and this is doing just that."
In May, Hochul spokesperson Emma Wallner confirmed the governor intends to opt New York into the program, which would make it the 30th state to participate as reported at the time. A coalition petition opposing the move says Hochul plans the opt-in starting in 2027.
Wallner struck a supportive but cautious note.
"Governor Hochul is supportive of the federal tax credit scholarship and its potential to help New York students and schools."
"Our office awaits information from the federal government on the program and will thoroughly review the details of the policy for poison pills that could harm New York’s education system."
New York families already know what weak public options cost them. Homeschooling in the state has surged as parents leave a system that spends heavily and still fails too many children on basic reading.
Teachers unions and public-school advocates launched a petition demanding Hochul reject the program. They argue most New Yorkers have not heard of it and claim it would steer tax-advantaged dollars toward private tuition for families who never used public schools.
"Gov. Hochul plans to opt New York starting in 2027. But most New Yorkers haven’t even heard of this program or know how it will affect New York."
"Tax dollars would help pay private tuition for families who never used public schools."
Education Secretary Linda McMahon has said some Democratic resistance is simpler than policy. Leaders have fought the program, she noted, because “it’s a Trump measure.” Kentucky Gov. Andy Beshear raised familiar concerns that school choice could divert resources from public education. His state's legislature overrode his veto of opt-in legislation, and Kentucky formally joined.
Altfield called the incentives the right kind of pressure, money into the state, jobs, more educational options, and relief for families who need it most.
"This is pressure of money flowing into your state. This is pressure of job availability in your state. This is the pressure of educational opportunities increasing for your communities."
"This is pressure of putting money back in the pockets of parents, back in the pockets of families who are struggling the most. This is the best kind of pressure to have."
That fight over who controls a child's education is not abstract. Critics of the public-school status quo, including voices who have called out what classrooms teach about the country, keep forcing the same question: who decides, parents or the system?
The Department of the Treasury and the IRS issued proposed regulations on Oct. 1 to implement the Federal Scholarship Tax Credit, also described as the Education Freedom Tax Credit. Those rules pave the way for a nationwide framework. State opt-in remains the gate. Without a governor's formal yes, local families and scholarship groups stay locked out even while out-of-state giving continues.
The program arrived after years of parent demand for alternatives, including the post-pandemic stretch when large blue-city districts struggled to hold students. Families who once accepted the assigned school are now shopping for tutoring, after-school help, summer programs, and full exits from district control.
Education advocates who defend parental choice have heard the counterattacks before, including mockery of homeschooling families as selfish. The tax credit answers with a concrete tool: private dollars, a federal credit, and scholarships that follow the student.
Burke's warning to holdout capitals is operational, not rhetorical. Keep the gate closed and the donations leave. Open it and the scholarships, and the political credit for putting money back with parents, stay home. Polis already took the deal. Hochul is lining up. Union petitions are trying to stop her. The IRS tally already shows most states on the other side of the line.
When the choice is between protecting a failing monopoly and letting parents steer scholarship dollars, the states that stall will own the empty seats and the departed checks.
