Governor Kathy Hochul just did something rare in New York education politics: put students ahead of the teachers’ unions. Last night, Hochul announced that she would sign up New York State for the One Big Beautiful Bill’s tax credit for Scholarship Granting Organizations (SGOs). Hochul deserves real credit for giving more families the chance to pursue a quality education for their children, and for resisting New York’s powerful teachers’ unions.
Beginning next year, the program will allow taxpayers to claim a $1,700 federal tax credit for donations to SGOs, which then use the money to support children through scholarships, tutoring, and other educational expenses. Because of the program’s generous income limits, New York City families earning up to roughly $437,000 will be eligible to receive scholarships.
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Crucially, these scholarships are fully funded through the federal tax credit and therefore impose no new fiscal burden on the city or state. For a state’s SGOs and students to qualify, however, the law requires the governor to opt in. States that decline to do so will watch their residents donate to SGOs elsewhere, while their own students get no benefit.
As Bill Henson and Danyela Souza Egorov recently observed, the SGO program will not only help students in tuition-dependent private and religious schools but also cover expenses such as after-school programs, books, supplemental instruction, and tutoring for students in traditional public schools and charter schools. In other words, the initiative is not an attack on public education. It is an investment in students—wherever they happen to attend school.
Among the biggest beneficiaries of Hochul’s decision will be religious schools, which have long educated working- and middle-class children at a fraction of the cost of Department of Education schools while receiving little direct public support. Parochial schools operate on razor-thin margins to keep tuition accessible, depending heavily on philanthropy and the sacrifices of underpaid teachers. These educators do important, demanding work for far less than they could earn in traditional public or charter schools.
Many such schools have already closed their doors under the weight of insurmountable fiscal pressures. Seven Catholic schools in Brooklyn and Queens will close in June, followed in July by three more closures in the Archdiocese of New York. The city’s skyrocketing cost of living has made it harder both for parents to afford tuition and for teachers to accept parochial-school pay.
I know these struggles firsthand from my volunteer service as treasurer of Astoria’s St. Francis of Assisi Catholic Academy, the grammar school I attended as a child. Running a private school in New York City on tuition of just $7,300 per pupil is a grueling exercise in scarcity. Each new school year brings stark tradeoffs between fundraising, family affordability, teacher compensation, building maintenance, classroom materials, and basic operational needs.
The SGO tax credit will give schools like mine a chance to relieve chronic fiscal strain and focus more fully on delivering the highest-quality education. It will also help parochial schools boost teacher pay, in turn improving the retention of talented teachers and giving these educators more of the income necessary to live in New York.
As Manhattan Institute Senior Fellow Ray Domanico has written, the bosses who run New York’s teachers’ unions fear those benefits may come at the expense of their members. The unions treat any expansion of parental choice as a threat—even when such programs help low- and middle-income families and don’t reduce public-school funding.
That position is especially hard to defend amid record public-education expenditure. Since the Covid-19 pandemic, city and state leaders have dramatically expanded spending—it now totals an eye-watering $42,000 spent per pupil in New York City—even as enrollment has declined by roughly 120,000 students and student achievement remains low.
In a recent Manhattan Institute report, Liena Zagare and Connor O’Brien discussed the way in which the lack of meaningful educational alternatives is driving parents from the city, in many cases to states that have expanded school choice. Among New York State parents, 77 percent support education savings accounts, and 73 percent support vouchers. With more school options soon available, parents will feel less pressure to leave the city, which will help stabilize the state’s tax base and population ahead of the 2030 census.
The easiest political move for Hochul would have been to defer to the unions and perpetuate the status quo. Instead, the governor made the right decision to unlock federal resources for New York’s students. In choosing families over special interests, she has recognized that public education should mean educating the public’s children—not preserving the establishment’s monopoly over them and their parents.