Jewish groups lobby Sherrill for tax program
Federal legislation could help parents with day school tuition
Calling it a “once-in-a-generation opportunity,” Jewish groups are lobbying New Jersey Gov. Mikie Sherrill to opt into a federal tax program that could be a boon for Jewish day schools while also providing improved educational opportunities for children in public schools.
But the clock is ticking down to the December 31 deadline, and with it the chance to allow schoolchildren in the state to benefit from the Federal Tax Scholarship Credit. Also known as the Education Freedom Tax Credit, the program was enacted into law as part of the FY2025 Reconciliation Act, better known as President Trump’s “One Big Beautiful Bill.”
“Thousands of emails have already been sent to the governor’s office, making clear how much this opportunity matters to New Jersey families,” Katie Katz of Teaneck said. She’s the director of Teach NJ, a program of the Orthodox Union.
The Federal Tax Scholarship Credit would allow people who owe taxes to make a donation to an accredited Scholarship Granting Organization, which would then provide scholarships to students in kindergarten through 12th grade for a variety of educational-related fees and services as well as private school tuition.
Noting that hundreds of millions of dollars are at stake, Linda Scherzer of the Jewish Community Relations Council of Greater MetroWest said the majority of the funds will go to supporting public school students in such afterschool activities as tutoring, enrichment, ACT and SAT prep classes, and more.
Ms. Scherzer was among a delegation of Jewish communal leaders who met last month with representatives from the Sherrill administration to discuss why this program is so important to New Jersey families and taxpayers. Jason Shames and Naomi Knopf, CEO and chief impact officer, respectively, of the Jewish Federation of Northern New Jersey; Jewish Federation of Greater MetroWest’s CEO, Meredith Dragon; Elana Wilf Tanzman, chair of GMW’s Day School Initiative; the chair of MetroWest’s JCRC, Ben Hoffer; and Matt Dikovics, from Nassau Government Affairs, representing the Jewish Federation of Southern New Jersey, the Jewish Federation in the Heart of New Jersey, and the Jewish Federation of West-Central were all there among the delegation.
“Our hope is that the governor will opt in,” Ms. Scherzer said. “It’s a once-in-a-generation opportunity that would be truly transformational for many of our families. And for the general population as it can provide enormous benefits and positive outcomes.”
Under the FTCS guidelines, an individual can donate up to $1,700 to an SGO and receive a dollar-for-dollar credit on their taxes for the full amount donated. The donation level rises to $3,400 for a married couple filing jointly.
As part of their qualifications, SGOs will be required to provide scholarships to at least 10 students who are not all attending the same school. Donors to an SGO cannot earmark donations to specific students. However, they will be able to earmark donations to specific schools affiliated with an SGO.
The U.S. Department of Treasury and the Internal Revenue Service estimate that the country could sustain some 700 SGOs by 2030, with an estimated 11 million taxpayers making nearly $26 billion in contributions. This would allow for the funding of some 2.2 million scholarships, according to some estimates. There is no limit to how much money an SGO can raise.
States must opt in annually, so just because a state signs up, that doesn’t mean it will always participate. Similarly, if a state fails to join in the first year, it can still join later.
There is no way to know yet how much money any child will receive — that will depend on how much money an SGOs ultimately raises — but the potential impact is significant. The ceiling for participation is quite high given that it is not tied to the poverty level as many other federal programs are.
“The beautiful thing about this tax credit is that, according to the Treasury Department, 96 percent of students will be able to receive a scholarship,” Rabbi A.D. Motzen said. He is the national director of government affairs at Agudath Israel of America, which has been advocating for such a program for nearly a decade. “This has the potential to help nearly all families, because the income levels for participation are 300 percent of an area’s median income, not level of poverty.”
According to the Agudah, a family of four living in Passaic or Bergen counties that makes less than $417,000 annually would qualify for a scholarship, because the local median income level is approximately $139,000. The earning threshold increases as family size grows.
For the thousands of Jewish day school families, that may mean that middle- and higher-income parents may end up getting “tuition reductions for the first time” because they haven’t qualified for aid in the past, Rabbi Motzen said.
So far, 31 states have opted into the program, and at least two states, Minnesota and Oregon, have said that they will not participate.
New York is among the most notable states led by a Democrat to opt into the program. Its governor, Kathy Hochul, said, “After a careful review of the federal regulations, we believe this program has the potential to bring millions of additional dollars to New York students and families without taking a single dollar from public schools or our state or local budgets.
“I’m not going to leave money on the table when it could help our kids,” she continued. “That’s why I have also been directly engaging with business leaders, who have committed to use this program to support public school students and their academic needs.”
Some neighboring Democratic governors, including Ms. Sherrill, Connecticut’s Ned Lamont, and Pennsylvania’s Josh Shapiro, are still weighing their options.
A spokesperson for Gov. Sherrill said that her administration “remains committed to ensuring every child in New Jersey has access to a high-quality education and the opportunities they need to succeed. As we carefully review this federal guidance, we are examining who the program would serve, which opportunities are available, and how it could best benefit public school students. The bottom line is clear: Put kids first and strengthen New Jersey’s public schools.”
Pennsylvania’s governor, who was re-elected this week and is considered a possible presidential candidate for 2028, addressed the FTSC program during a pre-election debate. Saying that he is “very open” to the program, Gov. Shapiro said, “I tasked my agencies with determining how this would work in Pennsylvania under those federal requirements. I expect in the next few weeks here to be able to make an announcement on opting in or not.”
While many Jewish groups traditionally have opposed school choice programs, particularly voucher programs which take public tax money and distributes it to parents to help pay for the school of their choice, including private schools, those backing this initiative say they do so specifically because it is not a voucher program and will not impact public school funding.
“This program is very different from vouchers because it does not directly reduce funding for local public schools,” Rabbi Jacob Blumenthal, CEO of the Conservative Rabbinical Assembly, said. “We remain committed to strong public education systems and also see the Federal Tax Scholarship Credit program as an important opportunity to help more Jewish families choose day schools, especially in the face of rising antisemitism.”
That last fact has meant that as more funding has gone into making institutions secure, there has been less of it for education.
“This will free up significantly more money to help families afford Jewish day schools, and that’s a big challenge for so many families,” Ms. Scherzer said. “Given the climate, the surging antisemitism, so much of the money that has been raised has been diverted to paying for increased security for schools, cameras, security guards — all the things that go into making sure our children are safe.
Not all Jewish groups support the tax credit. The National Council of Jewish Women, for instance, fears that despite what proponents claim, it will negatively impact public schools.
“Public education is foundational to our democracy and has long been a pathway to opportunity, stability, and prosperity for generations of Americans,” Darcy Hirsh, the organization’s vice president of government relations and advocacy, said. “We believe taxpayer dollars should be invested in strengthening our public schools, rather than supporting initiatives that could exacerbate existing inequities and undermine the education system on which millions of students and families depend.
“We remain committed to working with policymakers to raise these concerns and champion policies that expand opportunity, promote equity and strengthen our multiracial democracy.”
Other opponents of the credit say that despite arguments to the contrary there is no indication that scholarships will reach the students who most need them, especially those who are in low-income neighborhoods. They also say the program doesn’t have any means to measure the educational success of the students who get scholarships.
But many Jewish groups do believe this measure is worth advocating for. To that end, a cross-section of Jewish groups has backed the creation of a scholarship-granting organization for Jewish day schools. Among those supporting the “Opportunity Fund for Jewish Education” are the United Synagogue of Conservative Judaism, the Jewish Federations of North America, the Orthodox Union, Torah U’Mesorah, and Prizmah: Center for Jewish Day Schools.
The Jewish Federations of North America already has begun speaking to the nearly 1,000 Jewish day schools nationwide about how the program might affect them, should they be in a state that opts into the funding.
Officials at Prizmah believe that as of now, approximately 75 percent of all Jewish day school and yeshiva students would be eligible to receive scholarships. That number could rise to 90 percent if New Jersey, Illinois, and California, all of which have significant number of kids in Jewish day schools—an estimated 70,000 in New Jersey alone, according to Teach NJ—join in.
Should that happen, it would allow the Jewish community to get “as close to universal coverage for schools and students as possible,” Prizmah CEO Paul Bernstein said.
For the Opportunity Fund to have the kind of impact that day school advocates and Jewish communal leaders envision, it will need a large infusion of donors beyond just those families who are already invested in paying tuition at Jewish schools.
“Our goal is to mobilize the entire Jewish community to contribute to the tax credit, which could enable schools to reduce tuition for a large portion of families, provide additional services … and to the extent that schools currently invest significantly in tuition assistance, they should have the opportunity to reinvest some of those dollars to increase excellence and for other purposes,” Mr. Bernstein said. “We are optimistic this will help drive up enrollment even further.”
Rabbi Motzen agreed. “We need literally every person, their grandmothers, and their neighbors to donate,” he said. “The whole goal of this is not about someone who is paying tuition to get a tax break, but about the wider [Jewish] community pooling their money together to give scholarships to their children’s schools or other specific schools.”To that end, he says the Jewish community must begin making plans now for how their schools will use the scholarship dollars that the Opportunity Fund may bring in. Will they, for instance, put all their funds into one large pool for students in a specific city or will there be separate earmarked accounts for each school? Further, he said, the community needs those plans with the community at large, whether or not they have children in Jewish day schools.
“We could easily reach a few hundred million dollars [in scholarships] even in the first couple of years” and grow exponentially from there if people understand the process and see the real impact of the scholarship funds, Rabbi Motzen said.
While Ms. Sherrill continues weighing her options, advocates for the program say that if she chooses not to participate, millions of dollars that would have gone to New Jersey students instead will go to students in other states, including New York and Florida, because local residents who have a tax liability will still want to take advantage of the tax credit.
As one person put it, “Millions will flow out of the State of New Jersey if she says no. Why would you want to leave that money on the table?”