New Jersey lawmakers are urging Governor Mikie Sherrill to opt into a new federal education tax credit program that could direct hundreds of millions of federal dollars toward New Jersey students without costing the state any money.

In a statement, Assemblymembers Michael Inganamort, Gerry Scharfenberger and Dawn Fantasia are calling on Sherrill to enroll New Jersey in the Federal Education Tax Credit program before the January 1 deadline and have also introduced legislation that would require the state to participate.

Under the federal tax credit scholarship program, which has been the result of a years-long advocacy and lobbying effort by Agudath Israel of America and other groups, individuals who donate to qualifying scholarship-granting organizations can receive a federal tax credit of up to $1,700, while married couple filing jointly can receive as much as $3,400 in tax credits per year. The credit is available regardless of whether a state opts in, but donations made by residents of states that do not participate would support scholarships in other states.

“The Democratic governor of Colorado said it best: ‘You’d have to be crazy not to opt in,'” Inganamort, R-Morris, said.

Shlomo Schorr, director of legislative affairs for Agudath Israel of America’s New Jersey office, is also urging Sherrill to participate, emphasizing both the economic and educational benefits of bringing the federal dollars into New Jersey.

“New Jersey should not leave hundreds of millions of dollars in federal scholarship funding on the table, particularly when the state can bring those resources into New Jersey without costing the state treasury a penny,” Schorr said. “This is an opportunity to bring outside dollars into our state, support New Jersey families and strengthen our economy, all without raising taxes or requiring a state appropriation.”

Residents in states that do not opt in would still be allowed to donate to scholarship organizations in other states that did opt in, potentially setting up a scenario where tens of millions of dollars can flow out of state, benefiting another state’s economy.

A spokesperson for Governor Sherrill said the administration is reviewing the federal regulations released last week and is examining “who the program would serve, which opportunities are available, and how it could best benefit public school students,” adding that the administration “remains committed to ensuring every child in New Jersey has access to a high-quality education and the opportunities they need to succeed.”

Addressing the governor’s concerns, Schorr noted that the program is not limited to private school students and can provide benefits to public school students through qualifying educational expenses, such as tutoring, special education services and other qualifying educational expenses.

“The program can also provide meaningful benefits to public school students through tutoring and other qualifying educational expenses,” Schorr said. “At a time when public schools are dealing with significant financial pressures, New Jersey should be looking for every available source of funding and support. There is no reason for New Jersey families to send these federal tax-credit dollars to other states when they could be helping students here.”

The push comes after the U.S. Department of the Treasury and Internal Revenue Service released regulations for the program last week.

Thirty states, led by both Republican and Democratic governors, have opted into the program.

The program allows participating scholarship organizations to provide assistance for a range of educational expenses, including private school tuition, homeschooling materials and high-impact tutoring for public school students.

To qualify for scholarships, students must be eligible to enroll in K-12 schools and live in households earning no more than 300% of the area’s median gross income.

Fantasia, R-Sussex, said the program could provide additional resources at a time when school districts across New Jersey are facing funding pressures.

“New Jersey is leaving non-taxpayer funds on the table at a time when students and property taxpayers are feeling the crunch of state aid cuts to many districts throughout the state,” Fantasia said. “Educational opportunities shouldn’t be subject to partisan debate.”

Senator Bob Singer, (R-Lakewood) has also urged Sherrill to participate, saying families in Lakewood and throughout New Jersey could benefit significantly from the program.

“Families in Lakewood and across New Jersey would benefit tremendously from the Federal Tax Credit Scholarship Program,” Singer, who already introduced similar legislation in the Senate, said. “I encourage the governor to take advantage of this opportunity to give parents more options, help students reach their full potential, and ensure hardworking families aren’t left behind.”

Inganamort, Scharfenberger and Fantasia’s resolution has been referred to the Assembly Education Committee.

New Jersey must opt into the federal program by January 1, 2027, and must submit a list of approved scholarship-granting organizations to the Treasury Department by February 15, 2027.