John Fensterwald
October 22, 2026
Before he heads out the door, Gov. Gavin Newsom must decide whether California will join 31 states in a new multibillion-dollar school choice program, funded by private donations, that President Donald Trump included last year in his One Big Beautiful Bill.
Like most Democratic governors, Newsom hasn’t signaled whether he’ll opt in to the law that advocates promise will greatly increase full or partial scholarships to private and religious schools, while potentially paying for auxiliary services in public schools, like tutoring.
The law’s intentionally broad, unrestricted language has made it contentious, with contrasting scenarios for how the Federal Scholarship Tax Credit program, also called the Education Freedom Tax Credit, will play out.
Under the program, an individual taxpayer can donate up to $1,700 annually to a qualifying grant-making organization, up to $3,400 for couples, and then receive a federal tax credit that lowers their taxes by the full amount. The nonprofit “scholarship-granting organizations” then combine individuals’ donations and distribute the money to school districts or to eligible families for private schools.