Persuading Gov. Kotek

By Rob Kremer
As seen in the Oregon Transformation Newsletter, 

How do we persuade Gov. Kotek to opt into the federal scholarship tax credit?

The new federal scholarship tax credit legislation, known as the Educational Choice for Children Act (ECCA), is going to result in billions of dollars becoming available to families of both public and private school children in the form of scholarships to pay for a variety of educational needs.

But not for children in every state. To be eligible for a scholarship, a child must live in a state that has opted in to the program. So far, 28 states, including Colorado, have done so. Gov. Kotek has not yet decided if Oregon families will have access to these scholarships.

There’s a way to help convince her. But first, an explanation of how this new program works:

Starting on January 1, 2027, any taxpayer will be able to donate $1,700 each year to a qualified “Scholarship Granting Organization” (SGO) and get the entire amount credited against their federal income taxes. Essentially, the donation costs the donor zero. They either give the $1,700 to the federal government or to an SGO.

Taxpayers can make the donation to any qualified SGO even if they live in a state that does not opt in.

The SGOs use the accumulated donations to provide scholarships to K-12 school aged children, not just for private school tuition but also for a range of things public school kids need for their education: tutoring, after school programs, assessments, educational technology, college classes in dual-enrollment programs, and a few other allowed uses.

The fact that both public and private school kids are eligible for scholarships under the program makes it more palatable to blue state governors, who almost universally oppose private school choice programs. Gov. Polis of Colorado is the only Democrat governor so far who has opted his state into the program.

His reason: If he didn’t opt Colorado in, there would be a substantial flow of Colorado taxpayer funds donated to out-of-state SGOs. He wanted Colorado families to benefit from that money. He said opting in was a “no brainer.”

It just isn’t in the DNA of Democrat politicians to say “no” to available money. It’s precisely this urge that might get Kotek to opt in.

What if a group of Oregonians raised millions of dollars in tax credit eligible donations but couldn’t give any scholarships to Oregon kids because Gov. Kotek hasn’t yet opted Oregon in? So, the Oregon taxpayer donations would have to be used to fund scholarships for children in other states. Would she really let that happen?

That’s precisely what the folks at Oregon Transformation are going to find out, in partnership with an SGO that I have founded, called The National SGO. Oregon Transformation is creating an “Affiliate Fund” at The National SGO. The money they raise in tax credit eligible donations will be held in a segregated fund to be used for scholarships as allowed by the ECCA.

If you are an employer, there’s a way to be a part of this. You can allow your employees to make the $1,700 contribution to the Oregon Transformation Fund at The National SGO by withholding the donations in monthly increments from their paychecks. Since they get the entire amount off their federal taxes due, they can easily adjust their W-4 so that their take home pay does not change.

Basically, they can give the $1,700 to the Oregon Transformation Fund at The National SGO or give it to the IRS.

If Gov. Kotek opts Oregon into the ECCA, the funds you raise and deposit at the Oregon Transformation Fund can go to scholarships for your employees’ children. If she doesn’t, the funds must be given to children who live in a state that has opted in.

Imagine the voice of dozens of Oregon employers whose employees are contributing $1,700 each year through their paychecks, hoping that the funds can be used for scholarships for the children of fellow employees.

Would Gov. Kotek refuse? Let’s find out.

It won’t be hard to participate. Your company’s annual “open enrollment” process can include the option for your employees to choose to donate to the Oregon Transformation Fund at The National SGO. The folks at Oregon Transformation will help with all the necessary employee communications explaining the program — how the donation actually costs them nothing and won’t even change their monthly take home pay.

The ECCA is, without question, going to result in billions of dollars of scholarships for public and private K-12 students funded essentially by individual taxpayers steering money to SGOs that would otherwise go to the federal government.

For Gov. Kotek to allow Oregon students to benefit from these scholarships in the face of objections from the teachers’ unions, she’ll need a good reason.

What better reason than the thousands of Oregon taxpayers who signed up to start donating in their first 2027 paycheck? Will Oregon kids benefit from those millions? Or will it all just have to go out of state?