As governors across the country deliver their 2026 State of the State addresses and budget proposals, one overarching theme is clear: despite concerns about deep cuts at the state and federal levels, education is a critical investment and is central to economic competitiveness, workforce development, and opportunity.
Governors highlighted the importance of maintaining and even expanding investment in classrooms, teachers, and student services, with teacher support a top priority: Alabama, Georgia, and Kentucky proposed pay increases for teachers ranging from 2-7%, while Alaska is offering teacher retention incentives and Alabama is creating new pathways to enter the teaching profession. Early childhood education was a common theme with Delaware, Hawaii, Kentucky, Massachusetts, and South Carolina announcing significant expansions in pre-K access. South Carolina Governor Henry McMaster called for universal full-day 4-K for all children regardless of household income, and Delaware Governor Matt Meyer announced a nearly $50 million investment in early childhood education over the next year alone. California Governor Gavin Newsom proposed one of the most significant investments in public education, including initiatives to improve literacy, expand transitional kindergarten, and modernize education governance, even as financial pressures mount.
Federal Funding: Holding the Line (For Now)
After the expiration of pandemic-era relief funds and a rocky 2025 where frequent changes to education funding left many on unsure footing, a little predictability has returned in federal funding. Many analysts expected a more dramatic pullback, but federal budgets have largely preserved prior year funding, keeping overall education budgets more resilient than projected. Governors have leaned on this stability, using it to justify sustained classroom investment and avoid the most drastic cuts.
The funding conversation has turned to a new federal program in the One Big Beautiful Bill that creates the first federal school-choice tax credit program that permits individuals to receive credits for contributions to scholarship-granting organizations that help families pay for private education and cover expenses outside of the public school system.
School Choice and Vouchers: A Growing, Contentious Policy Frontier
To date, 28 states have formally opted into or have announced their intent to participate in the newly created school-choice federal tax-credit scholarship program designed to expand options for families seeking alternatives to traditional public schools. Party lines largely dictate where a state stands on school choice: just one republican governor has yet to announce their intentions, and just two democratic governors have announced their support.
Governors who support school choice argue that these programs expand opportunities for families and introduce competitive pressures that can drive overall system improvement. Iowa Governor Kim Reynolds has defended choice measures against critics, urging school districts to innovate rather than resist change.
With questions lingering on how the program will be structured in each state, some governors are approaching the new federal program with caution, waiting for clearer guidance before committing. In states with more complicated political dynamics, legislatures are taking up the issue on their own, passing and proposing legislation to opt-in to the program without gubernatorial endorsement.
Meanwhile, longstanding voucher programs in states like Ohio and Florida continue to scale. Data shows that private school choice programs now account for billions in annual spending and a significant share of combined public and private education expenditures in the most active states, highlighting how choice policies are reshaping the education funding landscape.
A Turning Point in State Education Policy
Public education faces an uncertain 2026. On one hand, while federal funding is generally stable for now, most budget uncertainty is driven at the local level. On the other, a renewed and sustained interest in school choice threatens public school enrollment and historical public school funding formulas.
For families, educators, and advocates, this moment signals both opportunity and challenge: a chance to preserve and strengthen core public investments while wrestling with how choice policies and the dollars that follow them will shape the future of learning in communities nationwide.
Education policy is no longer defined by a single issue or jurisdiction; it’s a multifaceted arena that spans academic standards, workforce alignment, technology access, and the governance of public institutions. Stateside’s Education Practice combines deep policy expertise with strategic engagement capabilities to help you navigate the opportunities and challenges ahead.
If you’d like to learn more about our Education Practice and how it can support your organization’s goals, contact us to start the conversation.
