Will Josh Shapiro finally say no to the new federal school voucher scheme? The Pennsylvania Governor and his Democratic colleagues have made clear they will not let the Treasury Department rush them into a $1,700-per-individual tax credit — now doubled to $3,400 for joint filers — until they have seen what the program actually does. Those rules were published last week. On Wednesday, Shapiro said he is “very open” to the credit but will take “a few weeks” to review. Good for him. Any governor who signs on to a program of this scale without reading the fine print deserves the consequences that follow when the fine print becomes binding. That is the right pace, and the only one any governor should be considering.
Nineteen states and the District of Columbia have so far declined to opt in. That is not obstinacy. It is the appropriate caution when Congress has just handed Treasury authority to shepherd as much as $263 billion in diverted public money through a backdoor channel. Patrick Graff of the American Federation for Children — one of the program’s chief advocates — estimates $188 billion at the individual cap alone, and an additional $75 billion once the joint-filing provision kicks in, assuming every donor maxes out. Those are not small sums. They represent a wholesale transfer of public resources into private hands with almost no democratic accountability. Treasury is also letting donors give via payroll deduction, which makes the giving easier and the oversight harder.
The rules themselves are the particular cause for alarm. The statute nominally allows scholarships for public and private school expenses for students in households at or below 300 percent of local median income, but Treasury has gone much further. It has locked in that ceiling and forbidden states from tightening it — which means that in a high-cost state, 300 percent of the local median is a real income, while in a poor rural county the same number lets in families well above the working poor. The “uniform” eligibility is, in practice, a tiered one: skimming the most motivated families out of public schools in some places while barely reaching the median household in others. And states cannot disqualify scholarship-granting organizations. They cannot limit the types of schools those organizations fund. They cannot cap the kinds of expenses the scholarships cover. Governors are being told they may surrender their states’ role in K-12 governance, or watch the money flow to whoever sets up the right kind of nonprofit.
Worse, the rules pre-empt states’ ability to keep public dollars focused on public schools. Some Democratic governors had indicated they wanted any scholarship money to follow students already enrolled in public institutions, not subsidize private and homeschool tuition. Treasury has now declared such restrictions impermissible. Presented as a neutrality rule, it is a pre-emption of every state-level safeguard that the last decade of school-choice experimentation produced: accountability standards for participating private schools, exclusions for discriminatory admissions, prohibitions on funding unaccredited vendors. Governors who spent years building those guardrails are being told to dismantle them. That is not a clarification. It is a federal takeover of state education policy, and every governor who values local control should treat it as such.
The income-verification problem raised by Georgetown’s Marguerite Roza is the strongest practical objection on the table. Public-school families — the ones most likely to use a credit for small fees and routine expenses — face paperwork that may exceed the benefit, which is precisely why the poorest families are the least likely to apply. Treasury has waved this away with a carve-out for students in certain low-income areas: partial, undefined, and granted for “some services” that nobody has yet specified. Which services, and how the rest of the family is treated, is left for guidance still in progress. A program whose hardest-to-reach families are also its neediest deserves better than a partial carve-out announced in a footnote. The home-school treatment is likewise contingent on how each state defines a home-schooler — a moving target. The still-pending guidance on which K-12 expenses qualify at all is the kind of detail that should have been settled before the program was ever marketed to the states. Most of the rules were issued as a proposed rule-making, which means the substantive provisions can still be revised. Opting in now would mean committing to a program whose downstream effects on students, schools, and state budgets are still being written.
The teachers unions opposing the credit are not protecting “failing public schools,” as the boosters like to claim. They are protecting the public school system from a structural defunding scheme that would siphon resources away from every district without a viable private alternative. When New York Governor Kathy Hochul indicated she would opt in, the unions pushed back, and Hochul has so far refused to make her decision final. Her caution is more defensible than any rush to sign up. And the reservations registered by Shapiro, by state education commissioners, and by school-finance researchers are not union talking points. They are warnings about how the money will be spent, who will actually receive it, and what happens to districts that lose students without losing fixed costs. The unions are right. Public schools need a defender, and right now the only thing standing between the voucher push and a massive diversion of public funds is the willingness of Democratic governors to say not yet — and to mean it.
There is no virtue in being first to sign up for a credit whose “competition” frame conveniently ignores the districts that will be left holding the bill. Shapiro and his colleagues should take the few weeks they have asked for, submit their concerns through the public comment period Treasury has opened, and refuse to opt in until the program is one that actually serves the students it purports to help. The Treasury rules are not the end of the discussion. They are the beginning of one. Governors should treat them that way.
