Oregon Gov. Kotek declines §25F after reconsidering, citing Treasury limits on state SGO rules

Oregon Gov. Tina Kotek, a Democrat, announced on Friday, June 12, 2026 that Oregon will not opt into the federal Education Freedom Tax Credit (§25F), the dollar-for-dollar tax credit of up to $1,700 per taxpayer for donations to qualifying Scholarship Granting Organizations (SGOs). As reported by Education Week, Kotek pointed to Treasury’s recent information release confirming it would not let states “impose substantive SGO-specific requirements that are more restrictive” than federal law, and said that limitation “indicates states like Oregon will not have the flexibility they need to participate in alignment with our values.” The decision is a non-election, not a formal filing: declining §25F simply means Oregon’s governor does not submit the IRS advance election (Form 15714) or designate state SGOs, so the program never turns on for Oregon residents. Oregon does not appear among the participating states on the IRS newsroom roster dated June 8, 2026, which listed 27 states; Education Week reports 31 states on track nationally.

What makes the announcement notable is the arc behind it. Kotek was among the first Democratic governors last summer to say no, then reconsidered: in early March 2026 a spokesperson said she “has not determined” whether Oregon would participate and was awaiting Treasury’s regulations before deciding. The June statement closes that reopened question with a no, and the reason she gave is the same federalism fight now shaping decisions in capitals across the country. The credit’s mechanics are not in dispute: donors anywhere can give up to $1,700 to a qualifying SGO and claim a dollar-for-dollar federal income tax credit, with the SGO awarding K-12 scholarships and the program set to launch January 1, 2027. The fight is over how much a participating state can shape its own SGO list, and Treasury’s guidance suggested the answer is “less than blue states had hoped.” We track that dispute in our coverage of whether §25F is a federal floor or a ceiling on state restrictions and what Treasury previewed about state authority.

Kotek’s rationale is the inverse of the calculus that has driven Republican-led states in. Oklahoma, for example, deliberately barred its agencies from adding rules beyond federal law precisely so its program would track Treasury’s national framework rather than layer on state guardrails. Kotek wanted the opposite: room to attach Oregon-specific conditions to participating SGOs, and on reading Treasury’s release she concluded that room does not exist. The result places Oregon in the declining column alongside other Democratic-led states that have balked, a pattern we examine in our coverage of how Democratic governors have split on §25F. It stands in contrast to early movers across the aisle and beyond it, from Virginia, the first state to opt in, to New York under Gov. Hochul.

For donors, families, and prospective SGO founders, the practical takeaway is that Oregon is a non-participating state with no clear path to reverse course before the January 1, 2027 launch. There is no Oregon program to plan around: Oregon residents will see no in-state SGOs to give to, and Oregon families cannot receive §25F scholarships, even though the federal credit exists for taxpayers in states that elect in. Because the credit is statutorily capped at $1,700 per return regardless of how the state-conditions fight resolves, a point we lay out in our explainer on why the credit is $1,700, not $3,400, Oregon’s exit changes nothing about the dollar figures and everything about access. Oregon’s current status, and every other state’s, is tracked on our Oregon state page and the national participation map. Operators who still want the infrastructure ready in case Oregon ever reverses can review how the organizations work in our explainers and the current landscape in the SGO directory; the back-office work of intake, eligibility checks, and scholarship disbursement can be run on software built specifically for §25F.

The forward question is whether the same Treasury guidance that pushed Kotek out becomes the wedge that other governors use to stay out. Her objection is not to school choice in the abstract but to losing control over the rules, and if Treasury’s final regulations confirm a strong federal ceiling on state conditions, more Democratic governors may reach the same conclusion she did. The counter-pressure is the program’s zero-cost design: a participating state spends nothing from its own treasury to open the door, which keeps the question alive even after a sitting governor says no. For now, whether Oregon ever files an advance election will be measured by one thing, and Kotek has answered it for this cycle with a no.