More than 100 California faith and school leaders are pressing Gov. Gavin Newsom to sign the Golden State up for President Trump’s new school choice tax credit before time runs out.
The coalition, led by Catholic schools, Orthodox Jewish groups and school choice advocates, warned in an Oct. 23 letter obtained exclusively by the California Post that billions in California tax dollars could end up funding students in other states if Newsom opts out of the program.
“California dollars should remain in California to help California students. Governor Newsom, we are simply asking California to participate,” the letter, signed by 121 leaders of California schools, religious institutions and organizations, reads.
“California taxpayers. California dollars. California students. Please ensure that California families have the opportunity to benefit from this new federal program,” he added.
The Federal Scholarship Tax Credit, also called the Education Freedom Tax Credit, was created in Trump’s 2025 tax law. Individual taxpayers can claim a federal income tax credit of up to $1,700 for cash donations to eligible scholarship-granting organizations, and married couples filing jointly can claim up to $3,400.
The scholarships can pay for tutoring, after-school programs, special needs services and private school tuition.
States have to opt in, and the deadline is Jan. 1.
Students in states that don’t participate can’t receive the scholarships, but donors in those states can still claim the credit by giving to groups in participating states.
Newsom, who leaves office in January, hasn’t said what he’ll do.
His office told the Post, that they are “reviewing the materials release and don’t have anything to share at this time.”
Speaking exclusively with the Post last week, Education Secretary McMahon also urged governors to take advantage of the credit.
“It’s free money coming into the education system. And the misperception or conception is that this takes money away from public schools is totally wrong,” she told the Post. “This is not taxpayer dollars. It is private sector money coming into these scholarship granting organizations.”
“I would just urge governors to opt in,” she said.
Sydney Altfield, CEO of Teach Coalition, one of the letter’s co-chairs, told The Post that “we have had some movement from the governor’s office,” but not heard anything on how he may vote.
Altfield pointed to a letter Newsom recently signed with other Democratic governors.
In the Oct. 22 letter to Treasury Secretary Scott Bessent, the governors of California, Connecticut, Massachusetts, Michigan and New Jersey asked for more details on the program, including its costs to states, what it can cover for public school students and whether they can ensure lower-income students benefit.
Newsom would not be the first big-name Democrat to opt in.
New York Gov. Kathy Hochul announced Oct. 9 that her state would join the program, saying all students, including those in public schools, must be eligible to benefit. She said she wasn’t going to leave money on the table.
The coalition estimates the program could bring up to $6.2 billion a year to California students if 30% of eligible taxpayers take part. The figure comes from Education Reform Now, a pro-reform group.
Critics say the program steers federal money toward private and religious schools. Based on an analysis of donors to a similar program in Ohio, the Brookings Institution predicts more of the money will end up in wealthy communities.
Altfield disputed that, arguing that public school families will be the biggest winners.
“The majority of California students who go to public school are going to use this on tutoring, on after-school care, helping, you know, working-class mothers and fathers who have two or three jobs pay for that after-school care,” she said.
