The issue of “government funding” is distinct from whether a Torah education meets the requirements for compulsory education. If the government doesn’t fund Jewish schools it means more crowded classrooms, higher tuition and lower pay for teachers. Given the principle of “he who pays the fiddler calls the tune”, it is dubious why we even want the government to pay for Torah education.
If the government requires students to attend secular schools that will indoctrinate them in a secular, anti-Torah, world view, it is a matter of ???? ??? ????? and if the Supreme Court uphold it (which I consider unlikely), it would mean the frum Jews would be forced to emigrate. The proposal in New York would result in children from frum homes being removed from those homes to be raised in a Torah environment since that is in the “best interests of the child.” This is therefore not an economic issue, but rather and existential issue.