Reykdal opposes federal tax credit program, urges gov to reject

OLYMPIA – The leader of Washington state public schools says the state should not join a federal tax credit program that would fund K-12 education. 

Superintendent of Public Instruction Chris Reykdal views the tax credit as a way to expand school choice options without closing funding gaps for public schools. 

“Washington cannot in good faith participate,” Reykdal, who leads the nonpartisan state Office of Superintendent of Public Instruction, wrote in an Oct. 9 letter to Democratic Gov. Bob Ferguson.

“This entire tax scheme will add significant federal debt, and that means more cuts to public education and programs in future years,” he added. 

Ferguson has yet to decide whether Washington will participate in the tax credit program. His office is reviewing new program rules released by the U.S. Department of Treasury last week, according to Brionna Aho, his communications director. 

Meanwhile, a growing movement of bipartisan supporters are urging Ferguson to join. 

Arne Duncan, who served as the U.S. secretary of education under President Barack Obama called the program a “moral obligation,” last month during a panel hosted by the Washington Policy Center. 

Thirty-one states have opted into the Education Freedom Tax Credit program, which is open to any state whose governor approves participation. While the program is widely adopted by Republican-held states, some Democratic-strongholds, including Colorado, Virginia, and more recently New York, are trickling in. 

Under the program, beginning in January, individuals can claim a dollar-for-dollar federal tax credit of up to $1,700 for donations to certain nonprofits called scholarship-granting organizations. For married couples, credits can be up to $3,400. 

The contributions are meant to fund K-12 scholarships, primarily at private schools, though the scholarships also cover tutoring, books, supplies and disability services for public school students. 

The scholarships could reach a wide range of students with varying socioeconomic backgrounds. Eligible students are those whose household income is not greater than 300% of an area’s median income. 

The deadline for governors to approve participation is Jan. 1, 2027.

The Washington Student Success Coalition, an advocacy group whose members include Microsoft, the Seattle Metro Chamber, the Bellevue Chamber of Commerce and several educational associations, say the program would strongly benefit public schools. 

The program has been estimated to bring in $1.5 billion to Washington state if 30% of taxpayers contributed the full amount, according to the Democrats for Education Reform, a national advocacy group leading the push for states to adopt the tax credit.

“Superintendent Reykdal has repeatedly argued that Washington schools lack the resources to provide tutoring, afterschool programs, and other essential educational services,” Jill Jackson, managing partner of public affairs for Monument Advocacy, a public relations firm hired by the coalition, wrote in an email to the Standard. 

“Yet when Congress creates a new opportunity to help fund those very services – to the tune of $1 billion per year – he recommends that Washington turn it down,” she added. 

One of the core reasons Reykdal opposes the program is because states would have limited authority on the rules they could impose on scholarship-granting organizations, or SGOs. States could not limit scholarships to students from poor households, Reykdal said. 

Jackson says Reykdal is overlooking a key distinction: SGOs could impose their own restrictive criteria, for example limiting private school access.

“Washington organizations can focus on public-school students, struggling readers, mathematics tutoring, lower-income communities,” she wrote in an email.

Another reason for Reykdal’s opposition: it would cost the state money. State employees would be required to confirm that every SGO meets federal requirements. The U.S. Treasury Department estimated that at least 10 hours of state work per SGO would be required each year. 

“The costs borne by states to operate this program do not accompany any authority to actually regulate the program and ensure taxpayer money is used responsibly,” he said. 

Jackson argued that state resources needed to implement the program would be minimal compared to the amount in scholarships for students. 

On Tuesday, Reykdal called on the governor and the Legislature to fulfill their “paramount duty” of investing in public schools in a Seattle Times opinion editorial. 

The situation for public schools, he said, “continues to grow more dire.”

The review of the federal rules at the governor’s office “will take some time,” Aho said. “When the governor makes a decision, he will announce it.”

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