Democratic governors have until Jan. 1 to decide whether their states will participate in a new federal education tax-credit program that could generate nearly $26 billion in scholarship donations by 2030. The money could help families pay for private-school tuition, tutoring, summer programs and other education expenses—but opting in has become a political test for Democrats wary of expanding school choice. Colorado Gov. Jared Polis was the first Democratic governor to sign on. He called the decision obvious, saying he wanted Colorado students to benefit. New York Gov. Kathy Hochul has also joined. Minnesota Gov. Tim Walz, by contrast, has said his state will not participate. Fifteen other Democratic governors and Washington, D.C.’s mayor remained undecided, according to a state tracker. The program, known as the Federal Scholarship Tax Credit, is scheduled to begin in January. Qualifying taxpayers can donate up to $1,700 to a scholarship-granting organization, or SGO, and receive a dollar-for-dollar federal income tax credit. The organizations then provide scholarships for eligible education costs, including private-school tuition and services such as tutoring and summer school. The Treasury Department estimates the program could attract nearly $26 billion in donations by 2030. More than 138 million people could qualify for the full credit, according to the Institute on Taxation and Economic Policy. For comparison, Title I, a major federal program for schools serving low-income students, provided more than $18 billion in 2023. States that do not opt in would still allow their taxpayers to donate to SGOs and claim the federal credit, but families in those states would not be eligible for the scholarships. States can also change their decision in later years. Thirty-one states have signed on for 2027; most are led by Republicans. In Kansas, Kentucky and North Carolina, Republican legislatures overrode Democratic opposition to join. Supporters of public schools are divided over whether to resist the program or find ways to direct some of its benefits toward public-school students. The Southern Education Foundation, which opposes private-school vouchers, is organizing an alliance of SGOs focused on raising funds for public-school families. Its senior director of public policy and advocacy, Fred Jones Jr., said the group changed tactics after most states where it works opted in. Former Tulsa Public Schools superintendent Deborah Gist has also launched Future School Fund, an SGO intended to serve public-school students. Advocates say scholarships could pay for tutoring, after-school programs and summer learning—services that can be difficult for cash-strapped families to afford. But participation will not automatically bring money to school districts. Public schools generally cannot charge families for standard instruction, while private schools can use scholarship funds to cover tuition. Georgetown University education finance researcher Marguerite Roza said public schools might be able to charge for services such as aftercare, tutoring access or field trips, but districts would need to determine what the law permits and actively organize fundraising. Jessica Levin, litigation director at the Education Law Center, warned that the program could draw students toward private schools and ultimately weaken public-school funding. She also argues that public schools should be funded directly rather than made to compete for donations through a tax-credit system. The potential gains may also be uneven. Brookings Institution researcher Jon Valant and colleagues estimate that the wealthiest counties could raise roughly three times as much through the program as the poorest. Eligibility is broad: a student can qualify if household income is below 300% of the area’s gross median income, a threshold Treasury estimates would include about 95% of students. That breadth could direct assistance to families well above the poverty line while leaving rural and lower-income communities reliant on donors willing to give outside their own neighborhoods. Valant cautioned that the program could become “Title I for rich kids.” For governors weighing whether to opt in, the choice is increasingly practical as well as ideological: join and try to secure funding for public-school families, or stay out while private-school scholarship networks build their advantage. As Roza put it, the money will not arrive automatically; districts that want a share will have to organize to get it.