A major new federal education initiative is about to take effect, yet New Jersey remains silent while other states race to secure its benefits.
The Education Freedom Tax Credit (EFTC), created by the federal Working Families Tax Cuts Act, allows taxpayers to receive a dollar-for-dollar federal income tax credit of up to $1,700 per individual for contributions to approved Scholarship-Granting Organizations (SGOs). These organizations provide scholarships and other educational assistance to eligible K–12 students for both private and public schools. It your choice – you determine to what program your money will go to.
Unlike many government programs, the EFTC does not require states to spend additional tax dollars. However, there is one critical requirement: the Governor must opt the state into the program.
If a state declines to participate, its residents can still claim the federal tax credit by donating to non profits in participating states. That means federal tax benefits generated by New Jersey taxpayers could end up supporting educational opportunities elsewhere instead of benefiting New Jersey families.
This is not a theoretical concern. Democratic and Republican governors alike have recognized the opportunity. Colorado Governor Jared Polis became the first Democratic governor to opt into the program, explaining that it made little sense for Colorado taxpayers' federal dollars to benefit students in other states while Colorado families received nothing in return. His reasoning was simple: if participation costs the state nothing and helps local students, why would a state walk away from those benefits?
New York Governor Kathy Hochul also announced her intention to opt in, then took it back by stating she is reviewing IRS guidelines to ensure there are no "poison pills" that could harm the state's education system before formally filing the election paperwork. Playing politics.
New Jersey, by contrast, has had remarkably little public discussion on the matter. The governor, politicians and education groups are silent on the matter.
For New Jersey's Jewish community, the stakes are especially high. Thousands of Jewish families make enormous financial sacrifices to provide their children with a Torah education. Tuition often represents one of the largest expenses a family faces. Scholarship organizations work tirelessly to bridge that gap, but the demand consistently exceeds available funding.
The Education Freedom Tax Credit has the potential to generate a significant new stream of charitable contributions for scholarship organizations serving New Jersey families. Every eligible taxpayer who contributes receives a federal tax credit, creating a powerful incentive to support Torah. From an plain an economic point of view, If New Jersey fails to participate while neighboring states do, billions of dollars will instead flow across state lines.
The Jewish community, along with every community that depends on nonpublic education, should make its voice heard. Parents, educators, scholarship organizations, and community leaders should respectfully urge Governor Sherill and New Jersey's elected officials to opt New Jersey into the Education Freedom Tax Credit program without delay.
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