SANTA FE, N.M. — Gov. Michelle Lujan Grisham, a Democrat, has opted New Mexico into a Trump-backed federal tax credit program for donations to school scholarship funds, a reversal that drew praise from Republicans and anger from teachers unions.
Her office announced the decision Nov. 4. Beginning Jan. 1, taxpayers can claim a dollar-for-dollar federal credit of up to $1,700 a year, or $3,400 for joint filers, for donations to nonprofit scholarship-granting organizations. Congress created the Federal Scholarship Tax Credit in the One Big Beautiful Bill Act, which President Donald Trump signed in 2025. States must opt in.
New Mexico is the 32nd state to join and Lujan Grisham is the third Democratic governor to do so, after New York’s Kathy Hochul and Colorado’s Jared Polis. The governor had earlier said the state would not participate, then said she was awaiting federal guidance.
“By participating, we will give New Mexico taxpayers the chance to keep some of their federal income taxes in New Mexico to support New Mexico students,” Lujan Grisham said in a statement.
Sen. Gabriel Ramos, R-Silver City, the ranking member of the Senate Education Committee, said in a statement that opting in “is common sense. It puts more opportunities in front of New Mexico students.”
Vince Torres, executive director of America First Policy Institute’s New Mexico chapter, said the program “unlocks hundreds of millions of dollars in privately funded scholarships.” He added: “We commend President Trump and Congress for enacting this landmark program, and thank Governor Lujan Grisham for recognizing its tremendous potential.”
The state’s two teachers unions took the opposite view. AFT New Mexico President Whitney Holland and NEA-New Mexico President Bethany Jarrell called the decision “nothing short of a betrayal” and described the credit as a voucher scheme.
The Public Education Department will set up a process to certify scholarship-granting organizations in the coming weeks, the governor’s office said.
