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The Rundown · Reading Between The Headlines

Free Money, and the Unions Don't Want It

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Free Money, and the Unions Don't Want It – The Rundown graphic

Connecticut is staring at a federal scholarship credit that does not take a dime out of the state budget. The Connecticut Mirror's headline on October 8 does not lead with that. It leads with the people who want the governor to leave the money on the table.

"Proposed Federal Scholarship Tax Credit rules fail to win over CT educators."

Read the byline. Theo Peck-Suzuki. Read the deck. Proponents "argue the money could be a boon to public school students, but many in Connecticut say they still see the program as an effort to undermine public education."

Who is "many in Connecticut"? The first quote is Jan Hochadel, outgoing state senator and president of AFT Connecticut. She tells the Mirror the Treasury rules "solidified for me exactly what we always knew: that this was a program that is going to be designed to hurt public education and basically help the rich."

That is not a finding. That is a union press line, printed as the news.

Here is the program the headline is selling as a loss. Congress put a federal scholarship tax credit into the 2025 tax law. An individual can give up to $1,700 to a scholarship-granting organization. A married couple filing jointly can give up to $3,400. The donor gets the money back, dollar for dollar, as a nonrefundable federal tax credit, up to what they owe in federal income tax. The scholarship can pay for tutoring, after-school programs, books, special-needs services, computers, or private-school tuition. Treasury and the IRS say the credit starts January 1, 2027. Students are eligible only if they live in a state that opts in.

Thirty states had already elected in as of September 14, according to Treasury. Colorado, with a Democratic governor, is one of them. Sit that out and you do not stop the credit. You stop Connecticut kids from using it.

The Mirror knows this. Supporters of the credit, Nicole Pollock of Democrats for Education Reform among them, make the point that governors who delay will not stop the program. They will only keep their own states from getting a cut. That point should have been the story. It runs behind the union's.

Lamont is still asking the feds for clarification. His line: "I want to make sure this does not discriminate in any way against public education." He thinks he will know "within a month or so." States that want in for 2027 have to commit. The clock is not a suggestion.

Ryan Fazio called this "literally free money" in May. The Mirror says it asked him about the new rules and he did not answer in time. Fine. Do not build the piece so the loudest voice against the credit, quote after quote, is the teachers' union president who is also a retiring Democratic senator.

Then the speculation gets promoted to analysis. Hochadel, "connecting the dots," says Washington is going to take the money "away from education," meaning Title I and IDEA. There is no bill in the piece that does that. There is no Treasury rule that does that. The credit is a new federal tax expenditure. It is not a line-item transfer out of special education. Kate Dias of the Connecticut Education Association says IDEA is funded closer to 14 percent against a 40 percent federal goal, and that towns will eat more property tax if Washington shrinks it further. That shortfall is a decades-old Washington failure. It is not evidence this credit raids special education. Pollock says a cut in the next two or three years is unlikely. The headline does not flinch.

The "help the rich" line does not survive the Mirror's own numbers. The income cap is 300 percent of area median income. The Mirror reports that covers an estimated 96 percent of students nationwide. Ninety-six percent is not a yacht club. Fran Rabinowitz of the superintendents' association says you will not find as many Hartford families who can send $1,700 as you will in Simsbury. She skips the part where a donor who owes at least $1,700 in federal income tax gets every dollar back on the federal return. That is not a gift to the rich.

Treasury's proposed rules say a state that opts in cannot ban private-school tuition scholarships. Hochadel calls that proof "the incentive is to have more students go to private institutions." Yes. That is what a choice program does. The same dollars can also buy high-dosage tutoring for a kid who stays in the district. Rabinowitz complains private schools already have scholarship nonprofits and public schools would have to build them. That is an argument for starting, not for forfeiting the year.

Then Dias reaches for the scare quote. "We have Kosta Diamantis who's in Greece," she says, and asks what happens if a scholarship group "can go under, go to Greece." Diamantis was a state school-construction official convicted of bribery and extortion who fled to Greece and was sentenced in his absence. He is not a scholarship group. A federal credit with governor approval, a rule that scholarship groups spend at least 90 percent on scholarships, and IRS reporting is not that scandal. Printing the line without a raised eyebrow is how a news story becomes a union flyer.

Opting out does not add a teacher in Hartford. It does not fix the Education Cost Sharing formula. It does not lower a mill rate. It tells a parent who wants tutoring, a special-needs service, or a different classroom that the AFT got there first.

Thirty states said yes. The governor says give him a month. The Mirror called the union and wrote it up as education.

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