Virginia’s state program faces sunset

by Todd Truitt

Two Democratic Governors have now selected to participate a new federal tax-credit scholarship. Kathy Hochul, the New York governor, announced this week her state would opt in. She follows Colorado Governor Jared Polis. North Carolina Governor Josh Stein also said that he will opt in once the federal government releases regulations for the program this year. Only two Democratic Governors have stated that they will not be participating, but the majority are still undecided.

Glenn Youngkin , the former Governor of the Commonwealth, opted to join the program before he left office in January 2026. Many are waiting to see if Governor Abigail Spanberger will continue her participation as the launch date of 2027 approaches.

This federal program, which is part of the One Big Beautiful Bill Act, passed last year allows taxpayers to claim an up to $1700 nonrefundable federal credit for donations made to nonprofit scholarship-granting organisations (SGOs). These organizations may then offer scholarships to cover private school tuition, tutoring fees, educational materials or other approved K-12 costs. The state does not have to fund the program, but residents must opt-in for it.

As part of the K-12 agenda she has set forth, Gov. Spanberger is a former Congresswoman and parent with three children attending Virginia public schools. , she has emphasized funding public education, academic excellence, and rigor. She also emphasizes preparing students for advanced academic programs, career-ready skills and more. Spanberger’s K-12 platform rejected diverting public funds to private school vouchers.

Virginia’s unique situation makes it stand out. Virginia’s Education Improvement Scholarships tax credits ( EISTC ) program, which is a state-funded credit for private school choice in Virginia, will sunset around the time that the new federal program begins. The EISTC was established in 2012. It offers a state tax credit of 65% for donations to scholarship foundations that provide financial aid to students with special needs or lower incomes who attend private schools.

The annual limit for the state program was $25 million. The program provided scholarships to 5,820 students in the 2023-24 academic year with an average value of $2141. In the last five years, lawmakers have tried several time to remove this sunset clause. The state program will cease to exist after 2027 if no legislative action is taken.

Mark Kelly, a Senator from Arizona, has introduced legislation that will repeal the federal tax credit scholarship program. More than 30 Democrats have co-sponsored the bill, including Virginia Senator Tim Kaine. Senator Mark Warner is not a co-sponsor.

Gov. The upcoming decision of Spanberger on this matter raises difficult political issues. Governor Youngkin opted the Commonwealth in. The Virginia Education Association strongly criticized Youngkin’s decision, and encouraged Spanberger evaluate the program once federal regulations are finalized. The VEA had urged the General Assembly earlier to pass legislation prohibiting a Virginia governor from opting-in.

Some have compared the situation to that of Virginia Republicans during their extended resistance against the Affordable Care Act’s Medicaid expansion. This stance became a rallying point for Democrats in several election cycles, prompting questions about whether Governor. Spanberger, and Virginia Democrats may now be facing their own political risk if they opt out of the federal education tax credit scholarship program.

A governor’s choice to opt in does not imply that he or she supports private school choices. Josh Cowen, a Michigan State University professor (and a prominent opponent of private school choice) stated:

The decision that Governor Spanberger will make on whether to continue participating in the federal initiative may have a significant impact not only on educational options available for Virginia families but also upon her political future after she leaves office.