Susan Pendergrass speaks with Shaka Mitchell, Senior Fellow at the American Federation for Children, about how a new federal scholarship tax credit, created through the One Big Beautiful Bill, could transform K–12 education across the country. They discuss what this means for Missouri families, the legal threats facing the MOScholars program, how education policy is shifting nationally, and more.
Timestamps
00:00 The Evolution of School Choice in Missouri
02:59 Charter Schools and Teacher Innovation
05:40 The Impact of Lawsuits on Educational Freedom
08:35 Federal Tax Credit Programs and Their Implications
11:19 The Future of School Choice and Parental Empowerment
Episode Transcript
Susan Pendergrass (00:00):
Thank you so much for joining us on the Show-Me Institute podcast, Shaka Mitchell of AFC. But I think you wear a lot of hats. We’ll just do that hat for now. There have been a lot of changes in the last few years—certainly since the pandemic—regarding how kids end up at the school they attend, especially with parents now getting more opportunities to choose instead of just being assigned. I know you’ve been on the front lines of this, especially through your work with charter schools.
In Missouri, we’re sort of creeping into it. We have a scholarship program now that’s growing, and finally, like in so many other states, the legislature has decided to put some public funding toward it. And now it’s tied up with a lawsuit. Are you following what’s going on with Missouri’s scholarship program?
Shaka Mitchell (00:45):
Yeah, thanks Susan. Thanks for having me on. I sure am following it. I’ve been encouraged in recent years by the steps Missouri has taken to expand school choice. As you know, there had been a charter school law for years, but it was really limited—to Kansas City and St. Louis. That’s a lot of students, but still many others couldn’t access those schools.
Then you had the MOScholars program, which I bet we’ll talk about. On the one hand, there are some encouraging developments coming out of Missouri. And then, per usual, there are lawsuits. Because, in the words of the famous 20th-century philosopher Taylor Swift, haters gonna hate.
Susan Pendergrass (01:30):
That’s right.
Let’s go back to this charter school thing for a minute. Now, for the first time, a charter school can open anywhere in the state—but only if the school board is the sponsor. That happens all over the country, but in Missouri, no school board would even consider authorizing a charter school. Not running them, just authorizing them.
Now there’s one other county where they can open without the board as the sponsor. But there is such strong resistance to the idea of charter schools. Do you find that surprising in 2025?
Shaka Mitchell (02:06):
Yes and no. I’ve worked in charter schools and with several charter networks. I have lots of friends still working in that space. At the American Federation for Children, we’re school-type agnostic. We support parents’ ability to choose.
In some ways, it’s not surprising that school districts—which have in many places become jobs programs for adults—don’t want to disrupt the status quo. Budgets continue to increase, while enrollments decrease. So they’ve got fewer students per classroom, but more money per pupil.
They’ve got it pretty good in terms of job security. But I think what you’re getting at is important: there are great educators who want to do right by kids. And many of them are trapped within that system.
We’re seeing some start their own schools or move to other states or online programs. There’s a lot of innovation happening. But unfortunately, you mostly see the negative reaction from public school districts when it comes to innovation and choice.
Susan Pendergrass (03:42):
Yes, and what’s so tragic in Missouri is that we’ve shut the door on teachers as entrepreneurs. We have plenty of entrepreneurial teachers. Some of the strongest charter school networks were started by teachers who said, “I have a great idea, and I need to do this outside the regulations and bureaucracy.” Cutting off the teacher-as-entrepreneur option is tragic.
Shaka Mitchell (04:10):
Yeah, super tragic. One of my colleagues, Dr. Patrick Graff at AFC, has done work on teacher spending accounts—similar to ESAs.
It’s a great idea. Teachers often say their classrooms are under-resourced. Every parent knows it’s almost back-to-school season—we’re about to get a list of supplies.
Every time I get that list, I think, “Why haven’t we budgeted for enough glue or crayons?” Patrick’s idea is that teachers should have accounts to buy what they need. Surprise: teachers love it, and legislators do too.
But when you say, “Cool, it works for teachers—now let’s do it for parents,” suddenly it’s hair-on-fire. The education establishment just says no. It’s unfair.
Susan Pendergrass (05:19):
Yeah. Public funding for MOScholars in Missouri currently serves mostly low-income students and students with disabilities in Kansas City and St. Louis. That’s where the program started. It’s expanded a bit—but only through tax-credit fundraising, and the organizations have to ask for donations.
Now the lawsuit is basically saying those kids have to go back to their old schools. That we can’t publicly fund private schools for students. It’s saying, “You have to go back to the school that didn’t work for you.”
I know the teachers’ unions brought the lawsuit, and they often take on the PR risk of being on the wrong side of things—like trying to take scholarships away from kids. I don’t see how they can sit well with that.
Shaka Mitchell (06:20):
Yeah. I had the great fortune of meeting a parent in Missouri, Becky Ucello. Her daughter was able to attend a private school through the program. Becky is a public school teacher.
So the idea that private choice programs are anti–public school is a myth. Of course she wants the best for her students—and her own daughter, who has exceptional needs. The district school wasn’t working. Who among us wouldn’t want the best for our child?
The unions get this wrong every time. And they usually get defeated in court. I expect the same in Missouri. There’s strong federal and state case law supporting the idea that parents can choose and that funds given out in a non-discriminatory way can be used at religious schools—because the parent is making the choice, not the government.
Susan Pendergrass (07:47):
In addition to the lawsuit, there’s a potential initiative petition in Missouri to amend the constitution to say you can’t spend public funds at private institutions for students.
But we already have several higher ed programs that work like Pell Grants—you can take them to public or private colleges. We have Bright Flight. This petition might even cut off those programs, too.
And even when open enrollment comes up, it’s often the lowest-performing districts that say, “We can’t be part of it—we can’t let our kids leave.”
Shaka Mitchell (08:41):
It’s totally short-sighted. Nearly every district already outsources some of their special needs education to private providers. That petition could cut off even that.
It’s absurd. Districts don’t make their own computers, books, or desks. They purchase from private companies all the time. The idea that public education is this sacred, fully public institution is a fiction.
Susan Pendergrass (09:33):
Cisco trucks are in every school. Pearson brings the textbooks. Public education is filled with private corporations. And we’ve made so much progress nationally.
I’d love for you to explain the potential for federal scholarship expansion through tax credits. What is that new program, and how will it work?
Shaka Mitchell (10:09):
Sure. The federal scholarship tax credit passed as part of the One Big Bill earlier this year. It’s the first-ever federal K-12 tax credit program.
First, it’s a tax program—not from the Department of Education. So it’s not adding to federal bloat or undermining local control.
Any federal taxpayer can direct up to $1,700 of their tax liability to a scholarship granting organization—like the ones already in Missouri. So instead of sending it to the IRS, I could say, “Let’s send this to a scholarship org in Kansas City.”
Then, the organization can award scholarships to families, most of whom will qualify based on income. The families can use them for a range of educational expenses—just like ESAs. It’s really exciting.
Susan Pendergrass (12:09):
I’ve heard opponents call it a federal voucher—but it’s not a voucher, right?
Shaka Mitchell (12:18):
Correct. Think of it like when your tax return asks if you want to give a dollar to the presidential campaign. But now it’s $1,700 to a scholarship org.
In Missouri, we have Catholic, Hebrew, and non-sectarian scholarship organizations. You can choose which one to support.
Susan Pendergrass (12:59):
Do you know the total amount of available tax credits?
Shaka Mitchell (13:06):
It’s unlimited, within that $1,700 per-taxpayer cap. Initially, there were discussions of state-by-state limits, but now the limit is per individual—not by state.
Susan Pendergrass (13:34):
So governors have to opt in, right?
Shaka Mitchell (14:10):
Yes. Governors or other state officials need to opt in. That may look different state to state. Some legislatures, like North Carolina’s, have already voted to participate.
Susan Pendergrass (14:45):
Where does Missouri stand?
Shaka Mitchell (14:59):
Probably not much discussion yet. It doesn’t go into effect until 2027, so there’s time. But Missouri is in a good spot—you’ve already got scholarship organizations and experience with tax credit programs.
Susan Pendergrass (15:20):
What about blue states like Oregon or California?
Shaka Mitchell (15:27):
Great question. All eyes are on states like California, Pennsylvania, New York. There are a lot of taxpayers there.
Imagine millions of California taxpayers sending $1,700 each to scholarships in Missouri. It would be crazy for a governor to allow that much money to leave their state. But we’ll see.
Susan Pendergrass (16:13):
What do you think those states will do?
Shaka Mitchell (16:25):
Hard to say, but some Democratic governors have said they’re researching it. It’s not really a partisan issue—it’s just the tax code. And everyone pays taxes.
Susan Pendergrass (16:55):
It’s an interesting political move—making school choice national.
Shaka Mitchell (16:59):
Exactly. And because it’s tax-based, it reaches everyone—Republican, Democrat, or Independent.
Are states really going to let billions in scholarships go to other states? I doubt it.
Susan Pendergrass (17:45):
It’ll be interesting to see how private school supply responds. Like in Arizona, where more parents have access, vendors have stepped in with customized, creative options. This could fuel huge innovation. The fact that it’s unlimited in size is surprising.
Shaka Mitchell (18:43):
Yes. These federal scholarships could stack on top of state programs.
Say your state gives $6,000, but tuition is $9,000. The federal credit could close that gap. That’s a big deal.
Susan Pendergrass (19:38):
Will there be a lawsuit?
Shaka Mitchell (19:39):
There probably will be. Lawsuits are easy to file. But this program is part of the tax code—it’s hard to challenge. It’s not clear who would even have standing.
If unions want to burn money on a lawsuit, I say go ahead.
Susan Pendergrass (20:27):
I think what works against them is how happy families are with these scholarships. Satisfaction is high.
Shaka Mitchell (20:53):
Yes. Since 2019, we’ve seen an explosion of education freedom.
And there’s now long-term data—like from Ohio—showing EdChoice students, especially Black and brown students, have higher college attainment. That kind of data is compelling.
Susan Pendergrass (21:59):
And the ROI is incredible. You keep one kid out of prison or help one finish college—you’ve already saved more than the scholarship cost.
These families take $6,000 when the public system spends $18,000. They make it work. I’ve never seen anything in traditional public education with this much impact.
Shaka Mitchell (23:10):
It reminds me of the early 2000s with the excitement around No Child Left Behind.
But this is even more grassroots. Parents are organizing—helping each other on Facebook, answering questions, forming communities. That’s powerful. You can’t put that genie back in the bottle.
Susan Pendergrass (24:34):
Right. I don’t think we’ll go from more choice to less. And I know people who considered moving to Missouri until they realized they couldn’t pick their child’s school.
Kids from these programs are having their own kids now. It’s not going backward.
Shaka Mitchell (24:40):
Exactly.
There was a great article today in the New York Times saying, “The monopoly is dead.” I mean—from the New York Times!
Susan Pendergrass (25:21):
That’s what these lawsuits feel like: a desperate last gasp.
Never underestimate parents. They’ll show up. Thank you so much for joining us today. That was fascinating. I know you’ll be following the lawsuit.
Shaka Mitchell (25:59):
Happy to do it. Thanks for having me, Susan.
Susan Pendergrass (26:01):
Great, thanks.
Produced by Show-Me Opportunity
