(The Center Square) — New Jersey Republicans want Democratic Gov. Mikie Sherrill to opt into the new federal school choice tax credit, warning that the state could lose out on more than $900 million in scholarship funds if it doesn't act by a January deadline.

Under the Federal Education Tax Credit program, unveiled by the Trump administration last week, households that donate to qualified nonprofits that support educational expenses can claim a $1,700 tax credit no matter whether the state participates. To qualify for the credits, state leaders must opt into the program. So far, at least 30 states have done so.

But State Assemblyman Michael Inganamort, a Chester Republican, said unless New Jersey opts into the federal program soon, those donations will fund scholarships in other states.

"That means our students will miss out on opportunities, even though our own taxpayers will be supporting it," Inganamort said in a video message. "The democratic governor of Colorado said it best: "You'd have to be crazy not to opt in."'

The GOP lawmaker urged Democrats who control the state Legislature to pass recently filed legislation authorizing the state to opt into the program.

"New Jersey needs to show the nation that we put our students ahead of politics. New Jersey students deserve to be in the front of the line for scholarships," Inganamort said.

The new tax credit program, which was authorized by the One Big Beautiful Bill Act signed by President Donald Trump last year, gives donors to nonprofits that support educational expenses a dollar-for-dollar tax credit of up to $1,700 annually. Those expenses include private school tuition, private tutoring and special education.

Married taxpayers filing jointly will be eligible for a credit of up to $3,400, according to the Treasury Department, which is overseeing the program.

New Jersey has until Jan. 1, to opt into the program, according to the Treasury, and until Feb. 15 to submit a list of approved scholarship-granting organizations for the tax credit to the Department of the Treasury for review. At least 30 states have opted into the program so far, according to the federal agency.

“The Education Freedom Tax Credit marks a new chapter in educational freedom and opportunity by establishing America’s first nationwide school choice program and empowering states to give students and families more options,” Treasury Secretary Scott Bessent said in a statement.

Sherrill, a Democrat who took over the governor's office in January, hasn't said whether she will opt into the program. She told reporters recently that she is reviewing the criteria for participating but hasn't made a decision.

Assemblywoman Dawn Fantasia said by not participating in the program, New Jersey is "leaving non-taxpayer funds on the table at a time when students and property taxpayers are feeling the crunch of state aid cuts to many districts throughout the state."

"Educational opportunities shouldn’t be subject to partisan debate," Fantasia, a Sussex Republican, said in a statement. "If our governor would do the right thing, this program could help offset lost state funding for qualifying students in districts that have experienced cuts over the years, increasing access to tutoring, books, school supplies, special education services and more. If not, we will look to our legislative colleagues to step up."

The effort has faced pushback in Democratic-controlled states, where powerful teachers unions have held rallies, urging their governors and lawmakers not to accept federal funds by opting into the program. Union leaders say that the money would siphon away much-needed federal funding and resources for traditional public schools, many of which are already operating on shoestring budgets.

But supporters of the tax credit program, like state Assemblyman Gerry Scharfenberger, a Middletown Republican, say it "gives every student the chance to succeed no matter their zip code."

"New Jersey’s school funding system is failing K-12 students as it picks winners and losers based on some mysterious formula that funnels billions into poor-performing school districts and leaves others with no choice but to cut academic programs, fire teachers and increase class sizes," said Scharfenberger, who teaches at Monmouth University. "Parents want the best outcomes for their children, and this is a way to do it with charitable dollars instead of at the expense of the taxpayers."