By Kris Nordstrom, MPP
Director of Research
November 05, 2026
On Wednesday, Nov. 4, outgoing Gov. Michelle Lujan Grisham opted New Mexico into President Trump’s signature education proposal, the Federal Scholarship Tax Credit voucher program, as a part of the “One Big Beautiful Bill” Act (OBBBA). The OBBBA created a new federal school voucher program in 2025. The program, which is set to begin in 2027, will allow wealthier taxpayers to reduce their federal tax bill by up to $1,700 per year by donating to scholarship granting organizations (SGOs) that pass out school vouchers.
To be eligible to receive a voucher, families must meet the program’s income requirements, which vary based on geography. In Albuquerque, families earning up to $300,000 per year would be eligible to receive these vouchers for private school tuition and other vaguely-defined educational expenses.
The decision to participate in the program ignores the ways that it will harm students and increase costs to the state. The expansion of voucher programs would raise state costs by widening economic inequality, lowering academic outcomes, lowering public school enrollment and increasing school segregation.
Data across the country shows that 60-90% of voucher funds flow to disproportionately wealthy families who have already enrolled their children in private schools. Additionally, the $1,700 federal deduction for donors will largely benefit wealthy taxpayers who can use the deduction to avoid paying capital gains taxes. Analysis from Brookings finds that “the wealthiest counties will generate several times as much [federal voucher] money per child as the nation’s poorest counties,” and that “rural counties will lose out.”
While most voucher recipients will be already enrolled in a private school, the decision will cause some smaller number of students to leave their public school. New Mexico will bear the costs of those children receiving a subpar education. Studies of voucher programs in Washington, D.C., Indiana, Louisiana and Ohio found that voucher students perform far worse academically than their peers who remain in traditional, inclusive local public schools. Many of these poorly served students return to the public school system, where they then require additional resources to compensate for the inferior education they received in private school.
New Mexico public schools are already facing enrollment declines. Those challenges, and the related budget impacts, will only grow with this decision. When a student leaves New Mexico’s public schools, the district loses funding for fixed costs like central office support and building maintenance that don’t decrease when enrollment falls. Declining enrollment can put additional pressure on school finances if the students who leave are more advantaged than the typical student, as is often the case. These issues are particularly acute for New Mexico’s rural schools, which already struggle to provide their students with adequate resources.
Additionally, voucher programs divide students. At a time when our democracy and economy require a renewed dedication to learning how to successfully interact with people from diverse backgrounds, voucher programs entrench division. Students attending less diverse schools are more likely to develop negative views of other racial groups and less likely to live in integrated neighborhoods as adults. These are additional costs the state will have to bear.
Finally, the decision potentially puts the state on the hook for covering voucher costs in future years. If a future, pro-education president rescinds the program, state leaders would face intense pressure to provide state funding so that no student loses their voucher.
Advocates for Trump’s voucher program falsely claim that it allows students from families with low incomes to choose the same schools as their peers from wealthier families. Researchers have documented the numerous ways that private schools can discriminate to exclude the students they don’t want to teach. Additional research has shown that private schools raise tuition to exclude students from families with low incomes. As courts in Ohio recently concluded when declaring their state voucher program unconstitutional, “it is the participating school, not the student or their family, that chooses whether to admit the student and, consequently, whether the student may utilize taxpayer vouchers at that school.”
Gov. Lujan Grisham justified opting in by claiming that her decision opens “a new public school funding opportunity for literacy and math initiatives, after school programs, computer resources and more,” a rationale we find unconvincing. The only way public schools can accept federal voucher money is if they start charging their students for these basic services. Needless to say, it would be a huge step backwards and create massive inequities if public schools begin charging students for these basic programs.
Public sentiment is firmly against vouchers. Voters have rejected vouchers each of the 17 times states have put vouchers to a referendum, even in deeply red states like Nebraska and Kentucky. Political observers credit rejection of Trump’s education agenda for the election of pro-education candidates in Texas and Iowa.
This action adds a disappointing note to an administration whose record on public education remains marked by its failure to adequately address the needs of English Learners, Native American students and economically disadvantaged students as evidenced by the ongoing Yazzie/Martinez litigation.
It is unclear whether Gov.-elect Haaland can reverse this decision before it goes into effect for 2027. What is clear is that she will have the authority to remove New Mexico from this program in 2028, and limit its harmful effects to just one year.