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Gov. Ned Lamont wanted Washington to explain its new scholarship tax credit before Connecticut signed up. On Oct. 1, Washington delivered. Now Connecticut families deserve an answer about whether their children will get the same opportunity as students in participating states.
“I just think it’s premature,” Lamont told CT Mirror in May. He expected federal guidance by January. The U.S. Treasury Department and the IRS beat that timetable, releasing temporary and proposed rules three months before the program’s Jan. 1, 2027, launch. Connecticut now has time to prepare, if Lamont chooses to use it.
Lamont now says he wants to make sure the program does not discriminate against public education and is transparent and carefully audited. Public-school students already qualify, and the proposed regulations require annual financial and programmatic audits, with reports furnished to participating states. If those provisions aren’t enough, he should explain what’s missing. Connecticut families deserve something more specific than another round of waiting.
Treasury is still developing more detailed guidance on which education expenses qualify. But the law already includes tutoring, books, supplies and qualifying special-needs services for public and private school students. Connecticut can prepare to participate while those details are worked out, giving scholarship granting organizations (SGOs) time to organize and families time to learn what help could be available.
The scholarships will come from cash donations to approved SGOs. Donors will be able to claim a dollar-for-dollar federal income tax credit of up to $1,700 annually, or up to $3,400 for married couples filing jointly.
A qualifying $1,700 donation can cut $1,700 off the donor’s federal income tax bill. This is a credit, not a deduction: the savings come off the taxes owed. Donors need enough federal income tax liability to use it, though unused credits can carry forward for up to five years.
Parents don’t have to donate to get help, and their child’s scholarship isn’t capped at $1,700. That limit applies to the donor’s credit. Families apply to an SGO for scholarships. Children can qualify if their household income is no more than three times the area median gross income, adjusted for family size. That opens the door to families who may earn too much for other assistance but still struggle to afford extra educational help.
Teachers’ union leaders have attacked the program as a subsidy for wealthy private-school families and a step toward a national voucher system. Yet Connecticut can participate without creating a state voucher program or financing the scholarships.
If their opposition persuades Lamont to reject the program, eligible public-school students would lose access to these scholarships, too. Union leaders should explain how that protects the children they claim to champion. Calling it a threat to public education is a strange way to describe helping a public-school student learn.
Connecticut educators and community organizations could work with participating SGOs to connect eligible public-school families with scholarships. Helping parents find that support would accomplish more than telling them why they shouldn’t have it.
They could do that without taking a penny from Connecticut’s public-school budgets. Scholarships would come from private donations encouraged by a federal tax credit, with no state-funded scholarships or matching funds required. Connecticut would certify eligible SGOs and submit its list to the IRS.
Rejecting the program would not send an extra dollar to Connecticut’s public schools. Residents could still claim the federal credit for donations to eligible SGOs in participating states. In other words, Connecticut residents could help children elsewhere while eligible students here miss out.
This isn’t a program where donors hand over money and everyone looks the other way. SGOs must keep qualifying donations in separate accounts and verify students’ income eligibility. Donors cannot reserve scholarships for a particular child. As for getting rich off the donations, at least 90% of qualifying donations and the earnings on those funds must go to scholarships. The money is supposed to help students, not bankroll the people handing it out.
Lamont asked for transparency and audits. Treasury’s proposed regulations provide for both, and public-school students are eligible for scholarships. He should opt Connecticut in and get ready for January. Eligible Connecticut students shouldn’t be left watching children elsewhere get help their governor turned down.
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