Democrat New York Gov. Kathy Hochul announced Friday that she is opting the state into President Donald Trump’s federal Education Freedom Tax Credit program, a decision that could expand access to education scholarships for millions of students while putting her at odds with powerful teachers’ unions that have urged her to reject the initiative.

Hochul confirmed the decision after reviewing federal regulations governing the program, which was established under legislation passed by Congress and signed by Trump last year. The initiative is scheduled to take effect in 2027 and allows taxpayers to receive a federal tax credit for donations to approved scholarship-granting organizations.

“I’ve been clear from the start that New York would participate in the federal scholarship tax credit program if, and only if, all schools and students, including those in our public schools, could benefit,” Hochul said in her announcement.

“I’m not going to leave money on the table when it could help our kids.”

The Office of Kathy Hochul
Credit: The Office of Kathy Hochul

The program allows individuals to receive a federal tax credit of up to $1,700 for eligible donations to scholarship organizations. Those organizations can then provide financial assistance for qualifying educational expenses, including private school tuition, tutoring, after-school programs, and transportation. Public school students can also benefit through eligible educational services.

Hochul said the program could bring millions of additional dollars to New York students and families without reducing funding from state or local budgets. Her administration has argued that participation would give families additional educational resources while allowing public school students to qualify for assistance.

The governor’s decision comes despite opposition from several major teachers’ unions and Democratic leaders in the state Legislature. Critics argue that the program could encourage families to leave public schools and direct resources toward private education, potentially worsening existing inequalities.

United Federation of Teachers President Michael Mulgrew criticized the decision, calling it a failure of leadership and arguing that students, educators and families could ultimately bear the consequences. New York State United Teachers President Melinda Person also expressed disappointment, while state Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie raised concerns about the program’s potential effects on public education.

Supporters of the tax credit, including organizations representing religious schools, welcomed Hochul’s announcement. They argue that the program could expand educational opportunities for families and provide financial assistance to students who otherwise might not be able to afford additional academic services or private schooling.

The federal credit is funded through the tax system rather than direct withdrawals from New York’s state education budget. However, the federal government forgoes tax revenue through the credit, and the program’s overall effects will depend on participation, donations and how scholarship organizations distribute the funds.

Hochul has maintained that her support for the program does not signal a retreat from public education. She pointed to increases in state school funding and said New York’s public schools would continue to be a central priority for her administration.

The announcement also carries political significance as Hochul seeks reelection in November. Teachers’ unions have been influential political allies for Democrats in New York, making her decision to proceed over their objections a notable development in the state’s education debate.

New York’s participation means eligible taxpayers will be able to contribute to qualifying scholarship organizations under the federal program once it takes effect, subject to the required rules and approvals. The announcement sets the stage for further debate over school choice, public education funding, and how the new tax credit will affect families across the state.