Federal tax credit could blunt legal challenges to school choice, law professor says

It’s no secret that school choice has expanded rapidly: 35 states now have programs to help parents pay for private school tuition and other education costs.

When Texas and other states launch their initiatives next year, half of U.S. students will be eligible for some form of school choice.

But lawsuits in several states are challenging some of these programs, claiming they violate state constitutions.

The central legal question, according to Fordham University law professor Aaron Saiger, is whether state laws require that public money be used only for public schools. Surprisingly, the recent passage of a federal school choice program may help school choice advocates win state court battles, he says.

Just in the past year, courts in South Carolina, Ohio and Wyoming struck down or blocked school choice programs on constitutional grounds, though appeals are pending and lawmakers have implemented measures to preserve school choice. Tennessee’s program, passed earlier this year, is also under review.

No federal right to education

In the early 1970s, the U.S. Supreme Court ruled that education is not a “fundamental right” under the federal Constitution. That pushed advocates to turn to state courts, winning battles in about half of states that there is a legal requirement that government provide equal and adequate funding for public schools, Saiger writes in State Court Report. 

Now, he says, the same playbook is being used to try to strike down school choice. 

Plaintiffs argue that these “education clauses” in state constitutions implicitly forbid states from also supporting private schools. Some states go further with explicit “no-aid clauses” that bar funding for religious or private schools. These provisions, often rooted in 19th-century Blaine Amendments, have been weakened by recent U.S. Supreme Court rulings like Espinoza v. Montana Department of Revenue, which said states cannot exclude religious schools from choice programs simply for being religious. 

Even so, legal uncertainty remains. One workaround that has gained popularity is education savings accounts (ESAs), where funds go directly to parents, not schools. That distinction makes it harder to argue that the state is directly funding private education. 

Potential impact of federal school choice 

Now, a new federal program could change the entire debate. The national school choice tax credit, created in President Donald Trump’s One Big Beautiful Bill Act, will launch in 2027. Because the credits are funded through the federal budget – not by drawing on state treasuries – states can opt in without taking any money from their public-school budgets. 

That design, Saiger argues, could “require a substantial recasting” or even render “moot many of the key arguments against choice that state courts are now considering.” 

In other words, state-level lawsuits may soon lose their force, “not because the U.S. Supreme Court backed choice with federal doctrine, but because Congress and the Trump administration are backing choice with federal dollars,” Saiger says. 

If school choice can be funded without impacting state budgets – since states provide substantial public school funding and have a legal right to do so – this could allow such programs to continue since they aren’t directly impacting public schools. 

This reality would mark a major – and perhaps unexpected – victory for school choice advocates, helping it gain traction in more states and reach more students. 

Blue state governors are already facing pressure to opt their states into the program, since it can help both private and public school students who need extra services and tutoring. 

Recent national test score data showing record lows reinforces the need for more help in education. 

“Loud voices on the left are already pressuring Democrats to reject the funding – which would be a mistake,” Ian Rowe, a policy analyst, and Jorge Elorza, head of Democrats for Education Reform, wrote in a recent article. “Randi Weingarten, president of the American Federation of Teachers, has falsely claimed that (the federal tax credit) is ‘literally taking money from our most vulnerable students’ and handing it to ‘rich folks’ for vouchers. But ECCA uses voluntarily donated dollars to expand access to education, not shrink it.”