RALEIGH — One-hundred fifty groups nationally, including many unions, are calling on governors to reject opting in to the Trump administration’s Education Freedom Tax Credit Program, which was included in the One Big Beautiful Bill.
Under the OBBB, the program is a federal tax credit for individuals contributing to scholarship-granting organizations (SGOs), which must be a 501(c)(3) organization.
“We write to you today with the fervent hope that you will stand strong as a champion for all children and public education by rejecting the federal private school voucher tax credit,” the letter reads.
The letter’s signatories are from 27 states, though 10 of those states appear to have already signed up for the program, based on a White House-produced map: Alabama, Alaska, Arkansas, Indiana, Missouri, Nebraska, Ohio, Tennessee, Texas and Virginia.
“The federal voucher is another attempt to move our society from the greater ‘we’ to a focus on ‘me,’” the letter claims. “Rather than directly investing federal dollars into critical programs, such as IDEA and Title I, which have never been fully funded and that benefit all children, the federal government has chosen to provide personal tax credits and individual vouchers.”
Groups in North Carolina signing onto the letter include Great Schools in Wake, North Carolina Caucus of Black School Board Members, North Carolina Justice Center, Pastors for NC Children, Public Schools First NC and Triangle Freethought Society.
“The constitutional right to a free public education is stated in NC’s constitution,” Yevonne Brannon, chair of Public Schools First NC, said in a related press release. “Using public dollars to fund private schools that can reject students for a variety of reasons violates this right.”
In a statement to North State Journal, American Federation for Children CEO Tommy Schultz called out unions driving opposition.
“It’s simple: The big schooling unions will stop at nothing to block education freedom at every turn,” said Schulz. “We’ve seen this play out in state after state where families have rightfully demanded school choice; the unions throw everything they have at trying to stop real education reform, be it through multi-million dollar lobbying campaigns or through lawfare to block choice programs.”
In the letter sent to governors, the groups also wrote, “Rejecting the voucher scheme is not rejecting funding; it is rejecting the dismantling of public schools.”
The letter calls the program a “federal voucher scheme” involving “personal tax credits and individual vouchers.” The program, however, is not a direct voucher system, nor does it provide personal tax credits or vouchers to parents or students.
Instead, the program offers a nonrefundable dollar-for-dollar federal tax credit of up to $1,700 to qualified U.S. citizens who donate to a certified SGO that distributes scholarships for eligible educational expenses such as extracurricular activities, homeschooling materials, private school tuition, tutoring, transportation or special education services.
SGOs also must meet strict requirements like annual audits by independent certified public accountants, must maintain separate accounts for qualified contributions and spend at least 90% of its income on scholarships.
The letter claims the program diverts federal dollars away from public school programs like Title I or IDEA, however, the program operates through a tax expenditure rather than a reallocation of existing appropriated funds.
Another criticism of the program is that it primarily benefits wealthy families, yet eligible students are from families earning no more than 300% of the area median gross income, with lower-income household students being prioritized. According to U.S. Census Bureau data for 2023, the average median family income in North Carolina was $70,804, translating to an eligibility range of up to $212,400.
At least 23 states have opted into the tax credit program, but North Carolina isn’t among them.
The U.S. Senate altered language for the tax credit before the One Big Beautiful Bill (OBBB) passed, requiring SGO selection to be made “by the Governor of the state or by another individual, agency, or entity designated under state law to make such elections on behalf of the state with respect to federal tax benefits.”
North Carolina Senate Leader Phil Berger (R-Eden) ran a bill last year called the Educational Choice for Children Act to get North Carolina into the program. The bill passed both chambers and was sent to Gov. Josh Stein on Aug. 1, 2025. Stein vetoed the bill Aug. 8, saying it wasn’t needed and he would opt the state in.
“Once the federal government issues sound guidance, I intend to opt North Carolina in so we can invest in the public school students most in need of after school programs, tutoring, and other resources,” Stein wrote in his veto message. “Therefore, HB 87 is unnecessary, and I veto it.”
Those guidelines were issued late last year, but Stein has not responded to North State Journal’s requests for comment on the matter.
