Just days before President Donald Trump signed the “One Big Beautiful Bill” earlier this month, which includes a groundbreaking federal tax credit to help K-12 students access tailored educational resources, Gov. Gavin Newsom approved a $750 million tax credit for Hollywood executives to keep film production in California. While Newsom’s policy prioritizes wealthy filmmakers, the president’s tax credit empowers families nationwide to support their children’s education.
Yet, California families risk missing out on access to additional education funds if state leaders don’t act soon.
The tax law offers a federal tax credit to individuals and businesses for donations through nonprofit scholarship granting organizations (SGOs), which distribute funds to qualifying K-12 families with K-12 students. This provision not only empowers parents to access education options that best support their children’s success, but it would also provide funds to regular public school students for expenses that advance their educational goals. This program could be accessible to a vast majority of the children attending private, charter and public schools in California.
Originally proposed in 2022 by U.S. Senators Tim Scott and Bill Cassidy as the Education Choice for Children Act, the policy would expand educational freedom well beyond what most states offer. These tax credit scholarships could cover private school tuition, homeschool materials, tutoring, transportation, special education services, band uniforms, field trips and more, allowing families to access funds to address their children’s unique needs.
In California, the program would not require new legislation or the creation of a new bureaucracy. Donors would fund students directly through existing nonprofit scholarship granting organizations, like the BASIC Fund in San Francisco, bypassing state agencies.
Most charitable deductions entitle the contributor to a tax deduction, which might save the donor a few hundred dollars depending on their tax bracket. The new tax credit would directly reduce taxes dollar for dollar.It’s possible that the contributors could also apply for a scholarship from a qualified organization and receive a scholarship to help them cover tutors or private school tuition, though some of those rules will clarified before the program’s final implementation in 2027.
However, there is one requirement: A congressional compromise requires states to opt in to the program, a concession to entrenched public school interests.
As such, Newsom and State Superintendent Tony Thurmond may be tempted to dismiss the program by ignoring its potential benefits for millions of families. They have, after all, been two of the most aggressive opponents of parental rights in education, fighting efforts to make curriculum more transparent, stripping authority from local school boards, and litigating efforts for more meaningful family involvement in the classroom. Their loyalty lies not with students or families, but with the teachers’ unions and education bureaucracies that profit from the status quo.
But Newsom or Thurmond could surprise their erstwhile foes by opting in to this new federal tax credit program, allowing scholarship granting organizations to distribute billions of dollars in scholarships while leaving state education funding for public schools untouched. It would be terrible for their partisan war with the majority party in Washington, D.C., to disenfranchise low- and middle-income families and leave money on the table. And while teachers’ unions may resist federal tax credit programs, fearing a shift toward school choice, the program could replace billions in lost federal funds for after-school programs.
These kinds of political antics do not improve California’s failing public education system. It’s no wonder parents are desperate for alternatives, and the new tax credit offers a practical option.
Regardless of what Newsom and Thurmond decide, voters may have another chance to expand educational choice at the ballot box in the November 2026 general election. The Children’s Education Opportunity Actis a proposed statewide citizen’s initiative that would provide every K-12 student with an Education Savings Account (ESA). This proposal closely resembles an unsuccessful effort I helped lead in 2022, as well as several related legislative attempts since 2018. If passed, the Children’s Education Opportunity Act would empower families to manage a portion of their child’s public education funds through individual ESA accounts, allowing them to allocate these funds for personalized, qualified educational expenses tailored to their needs, complementing the federal tax credit scholarships.
For this measure to get on the ballot, organizers need about a million signatures – a significant threshold to overcome. Convincing a majority of California voters to embrace a higher level of parental responsibility over their children’s education options is weirdly difficult, despite our state constitution’s promise of a free common education for every child.
Newsom and Thurmond should put their feud with the Trump Administration aside and opt into the federal tax credit program.
Here’s the bottom line: California’s future depends on well-educated students; yet rising education costs burden families. Education savings accounts and federal tax credit scholarships offer distinct but complementary solutions: ESAs redirect state funds, while scholarships leverage private donations. Both reduce financial barriers without eliminating the need for public schools.
Newsom and Thurmond could score an easy victory by opting into the federal program, delivering immediate relief to families at no cost to the state. Better yet, they could champion a matching state tax credit to amplify the impact — unless tax credits are reserved solely for Hollywood’s elite. By embracing these reforms, California’s leaders can show they value students over special interests. It’s a worthwhile compromise.
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Lance Christensen is the vice president of education policy and government affairs for California Policy Center and the former candidate for State Superintendent of Public Instruction in 2022.
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