School Choice Victory in Illinois

Published April 1, 2001


e Institute for Justice won an important victory for Illinois families on February 8 when the Appellate Court of Illinois for the Fourth Judicial District unanimously upheld the constitutionality of the state’s 1999 law providing a tax credit for K-12 educational expenses.

Opponents of the law–the Illinois Education Association, People for the American Way, and their allies–had argued the law violated four provisions of the Illinois Constitution, two of which deal with establishment of religion. The three-member appellate court emphatically rejected their arguments.

“By creating the Credit, the legislature has recognized that parents who send their children to private schools often do so at considerable expense to themselves and that they provide a benefit to the State treasury by relieving the State and local taxpayers of the expense of educating their children,” said Justice Rita Garman, who wrote the opinion for the panel.

“It is an appropriate legislative goal to assist those schools in remaining financially viable,” she added, concluding the credit did not violate the state constitution.

The court’s decision affirmed the ruling last April of Judge Thomas Appleton of the Sangamon County Circuit Court, who also found the tax credit to be constitutional.

The law, which provides a credit of up to $500 per family against state income taxes for 25 percent of tuition, book fees, or lab fees incurred by K-12 students at public or private schools, faced two separate attacks from the state’s teacher unions: in Sangamon County Circuit Court by the Illinois Education Association, and in Franklin County Circuit Court by the Illinois Federation of Teachers.

Judge Loren P. Lewis dismissed the Franklin County lawsuit in December 1999, also holding the credit is fully constitutional. His ruling has been appealed to the Appellate Court of Illinois for the Fifth Judicial District. Institute for Justice staff attorney Matthew Berry is the lead counsel for both cases, defending the tax credit on behalf of 12 Illinois families.

“Five judges have now looked at the educational expenses tax credit, and all five have concluded that it’s constitutional,” said Berry. “It’s time for the teachers’ unions to stop harassing the parents and children of Illinois.”

The Appellate Court opinion represents a complete victory for school choice supporters. The teacher union’s basic argument was that the tax credit violates two provisions of the Illinois Constitution dealing with religious establishment because parents may claim the credit for expenses incurred at religious schools. The court rejected that argument for two independent reasons.

First, the court concluded the money claimed through the credit did not constitute public funds and thus fell outside the scope of the relevant Illinois constitutional provisions. The court warned that reaching the opposite conclusion could have broad implications for the wide range of tax benefits provided to religious institutions under Illinois law.

“We are unwilling to interpret the term ‘public fund’ so broadly as to endanger the legislative scheme of taxation,” said the court.

Second, the court went on to say the tax credit would still be constitutional even if the money claimed through the credit did actually constitute public funds. In that event, according to the court, the credit would be constitutional under relevant U.S. Supreme Court and Illinois Supreme Court precedent because it is available on an equal basis for expenses incurred at public, private, and religious schools, and because all funds are directed by the private and independent choices of parents, not by the state.

“[T]he means by which state assistance flows to private schools is a material consideration,” noted Garman, who has since been appointed to the Illinois Supreme Court.

Citing the U.S. Supreme Court’s decision in Mueller v. Allen (1983), the Appellate Court panel rejected the argument that the credit should be declared unconstitutional because the majority of credits will be claimed for expenses incurred at religious schools. The court held that such statistics are irrelevant so long as the law is neutral on its face.

In the Mueller case–which involved a challenge to a Minnesota law that allowed a state income tax deduction for K-12 education expenses such as tuition, textbooks, and transportation–the U.S. Supreme Court stated it would be “loath to adopt a rule grounding the constitutionality of a facially neutral law on annual reports reciting the extent to which various classes of private citizens claimed benefits under the law.”

The Illinois Appellate Court panel also quickly disposed of the union’s two other claims–that the tax credit lacks a public purpose and that the $250 threshold for qualifying for the credit is unreasonable.

Institute for Justice attorneys anticipate the Illinois Education Association will ask the Illinois Supreme Court to review the Appellate Court’s decision.

“Because of today’s decision, this spring Illinois taxpayers will be spending more money on their children’s education and sending less money to the government,” said Berry when the decision was handed down.

For more information . . .

The February 8, 2000 ruling of the Appellate Court of the Illinois Fourth District in the case of Toney v. Bower is available through PolicyBot, The Heartland Institute’s free online research service. Point your browser to and click on PolicyBot, then request document #2184805 (21pp.).