Note: This report was updated on August 19^th to reflect the final changes to the congressional budget package, HR 1.

School vouchers allow families to use public funds to pay for their children’s private school tuition. School voucher programs enacted across the country – using tax credits, grants, and savings accounts to divert public funding to pay for private education – have consistently demonstrated that states with voucher programs expand the programs over time. These expansions dramatically increase the amount of public funds diverted to private education while state investments in public education remain stagnant or decrease. Despite the numerous negative consequences of using publicly funded vouchers to pay for K-12 private education expenses,¹ policymakers across the country continue to propose similar programs.

The president signed the final budget package into law on July 4th, 2025 which included the creation of a new national school voucher program. The decision of whether to opt-in to this harmful program is in the hands of the Idaho Legislature. Lawmakers will need to consider whether they will invest in creating additional infrastructure to subsidize private education in Idaho at the expense of Idaho taxpayers.

What is in the national school voucher proposal?

HR 1 creates significant tax incentives for donors that contribute to a fund created to reimburse families for private education expenses. The Congressional Budget Office estimates that this permanent program will divert $4 billion in taxpayer dollars per year,² resulting in a significantly larger price tag than the U.S. House’s original proposal that would have been temporary with a four-year sunset.

The program is designed to reward individuals that make charitable contributions to intermediary organizations called Scholarship Granting Organizations (SGOs) with a dollar-for-dollar tax credit up to $1,700 per individual. This new tax credit is roughly three times as generous as what an individual would receive from donations to every other charitable cause. As a result, the proposal privileges school voucher donations over donations to organizations that help people in our local communities like veterans’ organizations, homeless shelters, houses of worship, food banks, and domestic violence shelters.³

The SGO would then distribute the donated money in the form of school voucher tax credits. Parents can apply for these tax credits to be reimbursed on a range of educational expenses – including private school tuition, books, and homeschooling materials.

This is a sharp departure from the role the federal government currently plays in K-12 education funding. Federal money only covers between 6 and 13 percent of public-school budgets and is targeted towards communities with low-income students and children with disabilities.⁴

The national school voucher will disproportionately subsidize wealthy families’ private school tuition.

Households would be eligible to receive this federal tax credit if they make up to 300 percent of their area median gross income, which varies by city or county. For example, the estimated median family income in Idaho is $98,400, which means a family making up to $295,200 annually would be eligible for a voucher, making the program nearly universal since 95 percent of Idaho’s households earn less than that.⁵ That’s significantly more generous than Idaho’s school voucher advanced tax credit where families are eligible if they make up to 300 percent of the federal poverty guidelines, $96,450 for a family of four.

	Eligibility Criteria	Annual Income Limit for an Idaho Family of Four
National Voucher Program	300% AMI	$295,000
Idaho Voucher Program	300% FPG6	$96,450

School vouchers do not serve all kids.

Proponents of school vouchers argue that these programs increase “parental choice” in the educational options for their children. However, under voucher programs, private schools pick and choose the students that they want to serve and are reimbursed with taxpayer dollars. Private schools can reject or dismiss students based on religion, sexual orientation, academic ability, and disability.

For example, private schools are not subject to the Individuals with Disabilities Education Act (IDEA), which mandates that public schools provide students with disabilities with a free and appropriate public education. Although previous versions of the bill included language to provide some protection for students with disabilities, the final version of the bill does not require private schools to admit students with disabilities.

School vouchers do not hold private schools accountable and are rife for fraud and abuse.

The bill does not require accountability for student outcomes. As a result:

• Voucher students are not required to take the same standardized testing as public-school students. This means educational outcomes cannot be compared directly between private and public school students to track student achievement.
• Private schools are not required to be accredited.
• Private schools may hire subject matter experts as teachers in place of certified educators.⁷

Further, the lack of transparency around reimbursements creates potential for fraud and abuse. Florida’s school voucher program – which is similar in design to the proposed national program – has resulted in purchases of theme park tickets, kayaks, and big screen televisions.  

School vouchers are unpopular in Idaho.

Idaho has struggled to adequately fund public school for years, ranking last place in state per pupil spending at $5,636 below the national average.⁸ Research shows that voucher programs would exacerbate this underfunding by diverting limited public dollars to private education.⁹ Despite widespread public and education stakeholder opposition to school vouchers, the Idaho Legislature approved the creation of a new school voucher program during the 2025 Legislative Session.  When the bill was sent to the governor’s desk for action, the governor’s office received 37,457 phone calls and emails about the voucher bill; 86 percent of the those calls and emails were opposed to school vouchers. The governor ultimately signed the bill into law despite public opposition.¹⁰

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Endnotes

1. Idaho Center for Fiscal Policy and Public Funds Public Schools. “The Dangers of Private School Vouchers for Idaho Students, Schools, and Communities.” January 10, 2024. ↩︎
2. Davis, Carl. “ Megabill Takes Cap Off Unprecedented Private School Voucher Tax Credit, Potentially Raising Cost by Tens of Billions Relative to Earlier Version.” July 6, 2025. ↩︎
3. Davis, Carl. “House Tax Bill Enlists the Wealthy to Spread Private School Vouchers.” May 15, 2025. Institute on Taxation and Economic Policy. ↩︎
4. U.S. Government Accountability Office. “Department of Education: Resource and Achievement Trends.” February 07, 2018. National Center for Education Statistics. “Public School Revenue Sources.” May 2024. ↩︎
5. Dollard, Norin and Esteban Santis. “Federal Voucher System – Like Florida’s – Would Divert Funding to Private Schools and Homeschoolers.” May 29, 2025. Florida Policy Institute. ↩︎
6. Priority is given to families that make 300% or less of the federal poverty guidelines in the Idaho voucher program, HB 93. If funding is available after the initial eligibility period, families with higher incomes can apply. ↩︎
7. Congress.gov. “Text – H.R.1 – 119th Congress (2025-2026): One Big Beautiful Bill Act 139 STAT. 219.” July 4, 2025. ↩︎
8. “2024 Making the Grade: How Fair is School Funding in Your State?” Education Law Center. ↩︎
9. Idaho Center for Fiscal Policy and Public Funds Public Schools. “The Dangers of Private School Vouchers for Idaho Students, Schools, and Communities.” January 10, 2024. ↩︎
10. Suppe, Ryan. “Idaho Gov. Little’s office received more than 32,000 requests to veto House Bill 93.” March 3, 2025. Idaho Capital Sun. ↩︎