What to know about school tax credit program. Will Michigan opt in or stay out?

May 28, 2026

Michigan Governor Gretchen Whitmer faces pressure from both sides regarding whether to participate in the federal Education Freedom Tax Credit program, which allows donors to receive tax credits up to $1,700 for contributions to scholarship organizations that fund private and public school expenses for eligible families. While proponents argue the program provides educational opportunities without affecting state budgets, opponents view it as a privatization scheme that would reduce federal revenue and divert resources from public schools. Thirty states have already opted into the program, but Michigan stakeholders remain divided along political lines, with the issue becoming entangled in gubernatorial politics and longstanding debates over school choice.

Who is affected

Michigan students from families earning 300% or less of area median income
Michigan public school districts and their students (approximately 90% of students statewide)
Private schools and religious schools in Michigan
Approximately 3,000 students with disabilities served by Lutheran Special Education Ministries across 12 states
Michigan taxpayers who could donate and receive federal tax credits
Governor Gretchen Whitmer and other Michigan political leaders
Scholarship granting organizations planning to operate in Michigan
The Michigan Education Association and public school advocacy groups
The Michigan Association of Non-Public Schools

What action is being taken

Thirty states have opted into the federal program
The Michigan Association of Non-Public Schools is setting up a scholarship granting organization to distribute funds if Michigan opts in
New York Governor Kathy Hochul intends to opt in but is waiting on federal rules
The Five Democratic members of Michigan's State Board of Education adopted a resolution urging Whitmer to stay out of the program
US Education Secretary Linda McMahon has visited Michigan at least twice promoting the program
Scholarship granting organizations in red states that have opted in are already conducting operations

Why it matters

This program represents a significant policy decision that could reshape educational funding and access in Michigan. The debate touches on fundamental questions about public versus private education, with potential implications for educational equity and resource allocation. If Michigan opts in, it could provide additional funding opportunities for both public and private school students, but opponents worry it functions as a backdoor voucher system that undermines public education. The estimated $101 billion annual cost to federal revenue could impact broader school funding, and Michigan's decision may influence whether resources flow to students in other states or remain available to Michigan families. The political stakes are high, with the issue becoming a dividing line in the gubernatorial race and reflecting broader national tensions over school choice policies.

What's next

Governor Whitmer is waiting for more federal guidance and rules from the Department of Treasury before making a decision
The federal government needs to release final program rules clarifying how public school districts can participate and how much control states have over scholarship granting organizations
Once rules are released, scholarship granting organizations plan to begin operations in Michigan if the state opts in
The issue will likely continue to be debated in Michigan's gubernatorial campaign

Read full article from source: bridgedetroit.com