Starting in January, Americans can “donate” $1,700 to a “scholarship granting organization” (or SGO) and get every penny back on their federal taxes. The program, created in last year’s reconciliation bill, was sold as a way to subsidize private school tuition.

But because school vouchers like these are strikingly unpopular with the public, supporters have added a new pitch: public schools can cash in too.

In Ohio, we have witnessed a smaller version of this experiment for five years. We are seeing how this plays out.

In 2021, Ohio created its own tax credit of up to $750 per person for donations to SGOs. Most of the money goes to families already sending their children to private schools. But a few public school districts have tried to take advantage of the program to pay for full-day kindergarten, which Ohio does not require. State law lets schools charge tuition for it.

Kindergarten, the foundation of a child’s education, is being paid for through a tax-credit fundraiser, one voucher at a time. Some Ohio families pay more than $3,000 for all-day kindergarten, so a few communities have formed SGOs to help cover the cost. A suburban school district in Northeast Ohio, Nordonia Hills, started the state’s first public school SGO, raising about $252,200 this year, ensuring every family could access all-day kindergarten.

This approach works best in wealthier communities like Nordonia, where people are more likely to have the tax bills, time and know-how to redirect their money. The federal program is built the same way, with even more strings attached.

First, the money doesn’t go to schools, nor are income limits fair. Vouchers must go to eligible students from households earning up to 300% of their area’s median income. In Nordonia Hills, the income eligibility cutoff will be $276,000 a year; in the even wealthier suburb of Hudson, families making up to $494,000 will be eligible. In East Cleveland, a struggling inner-ring suburb that does not have an SGO, the cutoff will be $75,000. SGOs cannot send checks to a district or school to hire a reading teacher, fix a roof, or run an after-school program for everyone. It can only pay for things a specific student would otherwise be charged for. The only way a public school “benefits” is by charging families. A district that offers free kindergarten, free technology, free field trips and free instrument rentals gets nothing unless they start charging. Switching to fees opens a door for voucher money, but hands a new bill to every family.

Second, running one of these programs is a big job. Under the U.S. Treasury Department’s preview of the forthcoming rules, SGOs must spend at least 90% of their income on vouchers, verify each family’s income, and complete annual audits and IRS reporting. Many school foundations do too many other things to qualify and would likely need to start a brand-new nonprofit. The school district gets nothing for invoicing, tracking and paperwork.

Private schools already have financial aid offices, donor lists and accountants, meaning they’re already ahead.

Third, this program will reward communities and families that already have more. Because of community wealth, SGOs in Hudson and Nordonia Hills can raise more donations than urban and rural districts. Rather than creating a more equitable system, this program will exacerbate disparities between districts – an inevitable outcome when a public good is funded through individual effort.

None of this is free. Every dollar credited back to a donor is a dollar of federal revenue gone, money that could go to special education, low-income schools, or school meals. Ohio’s state credit alone cost nearly $27 million in 2023. Meanwhile, by one estimate, Ohio’s current two-year budget left public schools $2.75 billion short of its own school funding formula while spending $2.4 billion on private school vouchers. President Donald Trump’s federal voucher program could cost the federal budget as much as $51 billion annually.

About eight in 10 Ohio children attend traditional public school districts that shouldn’t have to become fundraisers, fee collectors and paperwork processors to get crumbs from a program designed for someone else. And children shouldn’t need a voucher to learn and grow in a welcoming and well-resourced public school.

States that haven’t opted in to Trump’s voucher program should think hard before they do. States that have, like Ohio, should not mistake this program for a school funding plan. The real answer is for Ohio to meet its constitutional duty to fully fund public schools, and for Congress to keep its own promises, starting with the special education funding it pledged 50 years ago.

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