Massachusetts faces a significant decision over whether to participate in a federal scholarship tax credit program that could direct as much as $1.25 billion annually toward in-state education programs — money that would otherwise flow out of the state entirely.
Why It Matters
The federal program allows individual taxpayers a 100 percent tax credit of up to $1,700 for contributions to nonprofit scholarship-granting organizations (SGOs). Eligible uses include private school tuition, tutoring, after-school programs, special education services, and career training — with public school students explicitly eligible to benefit.
The catch: state governors must proactively opt in. If Massachusetts declines to participate, an estimated $2.2 billion per year in state taxpayer dollars will leave Massachusetts for use elsewhere rather than staying to serve local students.
Gov. Maura Healey has made intensive one-on-one tutoring for struggling students a stated priority, and supporters of the program argue it aligns directly with her agenda. “The federal scholarship tax credit program could become a major financing mechanism to help achieve that goal without impacting Massachusetts’s education budget by a single cent,” one analysis concluded.
What Happened
Despite the financial stakes, some Massachusetts Democrats have resisted opting in, with critics labeling the program a “voucher” initiative tied to school privatization concerns. The opposition reflects a broader national debate over whether federal scholarship tax credit programs ultimately divert support away from traditional public schools.
Supporters counter that the program’s structure is flexible enough to direct funds primarily toward public school-supporting services. The framing of an all-or-nothing choice between public and private schools, they argue, misrepresents what the program allows.
Massachusetts already faces persistent achievement gaps, and research consistently shows that affluent families outspend lower-income families on tutoring and out-of-school enrichment by roughly nine times. Proponents say the scholarship program could help narrow that divide.
By the Numbers
- $1,700 — maximum individual federal tax credit per contributor
- $1.25 billion — projected annual in-state funding if Massachusetts participation matches survey interest levels
- $2.2 billion — annual outflow if Massachusetts does not opt in
- 57 percent — share of Massachusetts respondents interested in directing their contribution to a local scholarship organization
- 42 percent vs. 15 percent — Massachusetts residents preferred public-school-focused SGOs over private-school-only SGOs by nearly a 3-to-1 margin
Zoom Out
The Massachusetts debate mirrors tensions playing out in other states where federal education dollars have become entangled in disputes over school choice. The opt-in structure of the scholarship tax credit program gives governors considerable latitude to shape how dollars are used — a detail supporters say makes blanket opposition harder to justify on policy grounds.
The near-3-to-1 preference among Massachusetts survey respondents for SGOs focused on public schools rather than private schools alone suggests the political environment may be more favorable to participation than the current Democratic resistance implies — provided the program is structured to reflect that preference.
“Massachusetts can opt in and help shape how these dollars are used, or stand aside while billions of tax dollars leave the state,” one advocate for participation argued.
What’s Next
The decision rests with Gov. Healey, whose office has not publicly committed to opting in. With education budget pressures ongoing and no direct cost to the state’s own education spending, advocates expect pressure to mount — particularly given the governor’s own stated focus on closing tutoring and enrichment gaps for lower-income students.
How Massachusetts proceeds could also carry political weight beyond the state, as other Democratic-led states watch whether the school choice framing or the fiscal opportunity argument wins out in a traditionally high-performing but unequal education system.