Connecticut’s public‑school advocates remain unconvinced that the Treasury Department’s proposed rules for the Federal Scholarship Tax Credit (FSTC) protect public education. The rules, released Friday, outline how scholarship‑granting organizations (SGOs) must operate, who qualifies for scholarships and the limited role states may play.

Union leaders call the program a threat to public schools

“I think the rules solidified for me exactly what we always knew: that this was a program designed to hurt public education and basically help the rich,” said Jan Hochadel, an outgoing state senator and president of AFT Connecticut, one of the state’s two major teachers’ unions.

Hochadel and other public‑education leaders warned in May that Governor Ned Lamont should not opt Connecticut into the FSTC, arguing that the program lacks oversight, could increase inequality and might prompt cuts to core federal education programs such as Title I and the Individuals with Disabilities Education Act.

Governor Lamont seeks further guidance

Lamont, a Democrat, said he would wait for additional federal guidance before making a decision. “I want to make sure this does not discriminate in any way against public education,” he told reporters on Tuesday, adding that any implementation should be transparent and carefully audited.

The governor expects to have more clarity within a month.

Trump administration’s original intent

The FSTC was enacted as part of President Donald Trump’s 2025 One Big Beautiful Bill Act. It offers a dollar‑for‑dollar tax credit of up to $1,700 per donor (or $3,400 per household) for contributions to SGOs, which then award scholarships for tutoring, after‑school programs and private‑school tuition. Supporters argue the credit encourages private philanthropy and expands educational options for families, especially in high‑need areas.

Critics fear private‑school flow of federal dollars

According to the Treasury’s draft, states that opt in cannot prohibit SGOs from offering private‑school tuition scholarships, effectively allowing some federal dollars to flow to private schools. Hochadel warned that the incentive is to move more students to private institutions, noting the income eligibility threshold—300 % of area median income—covers roughly 96 % of students nationwide.

She said most scholarship recipients would come from affluent families, sending tax dollars to the wealthy, and that even a modest shift of students to private schools could reduce state funding tied to enrollment.

Proponents outline a public‑school‑focused design

Nicole Pollock, president of Democrats for Education Reform, argued that the FSTC can be structured to benefit public‑school students. She suggested creating a statewide SGO or a network of public‑school‑serving SGOs that raise funds for targeted goals such as early literacy, then partner with local education agencies.

Pollock cited Colorado’s experience, where an SGO works with districts to deliver “district‑aligned interventions.” She also proposed involving major state employers in payroll‑deduction donation programs, allowing employees to support scholarships while receiving a tax credit that does not affect take‑home pay.

Practical hurdles for public‑school SGOs

Fran Rabinowitz, executive director of the Connecticut Association of Public School Superintendents, cautioned that establishing a qualifying SGO is costly and time‑consuming. “I created a 501(c)(3) with a foundation in Bridgeport, and that took nearly a year,” she said, noting that private schools already have extensive experience with such structures.

She also expressed skepticism that families will donate primarily to SGOs serving students outside their own communities, which could limit the program’s impact on high‑need districts.

What’s next?

The Treasury’s proposed rules have not swayed critics, and they continue to urge Governor Lamont not to opt Connecticut in. The governor’s office says it will request further clarification from the federal government within the coming weeks.

Republican gubernatorial candidate Sen. Ryan Fazio, an early supporter of the FSTC, described the credit as “literally free money” for the state, but has not commented on the latest Treasury guidance.

As the debate unfolds, Connecticut’s educators, policymakers and families will watch closely to see whether the federal credit can be shaped to support public‑school students without diverting resources to private institutions.

Original reporting: The Connecticut Mirror — read the source article.