The Illinois House of Representatives is considering proposals to make changes to the Invest in Kids Scholarship Tax Credit Program, a tax-credit scholarship (TCS) program for low- and middle-income children that was enacted in 2017. It was the 22nd TCS program to be established nationwide.
The program allows qualifying families to pay for tuition and fees at private and parochial schools, as well as at a public school located outside of the student’s school district, using scholarships provided by donors, who, in return, receive tax credits.
Currently, the Invest in Kids program is open to students from a family whose income does not exceed 300 percent of the federal poverty level, which is $73,800 for a family of four in the 2017–18 school year. Fifty-two percent of Illinois families qualify for the program.
“Gifted and talented students” can receive a scholarship worth 110 percent of Illinois’ average operational expense per pupil (OEPP), which was $12,973 in 2015–16, while English language learners can earn a scholarship worth 120 percent of OEPP. Students in families whose household income is below 185 percent of the federal poverty level ($45,510 in 2017–18) can receive scholarships worth 100 percent of OEPP, while students in families whose household income is 185–250 percent of the federal poverty level can receive scholarships worth 75 percent of OEPP. Those between 250 and 300 percent of the federal poverty level can receive scholarships worth 50 percent of OEPP. Scholarship amounts are determined on an individual basis by the scholarship-granting organizations (SGOs) that administer them.
Individuals and businesses donate to these nonprofit SGOs and receive a tax credit amounting to as much as $1 million in one calendar year. The program has a budget cap of $75 million and a sunset provision that will end it after the 2022–23 school year unless legislative action is taken to renew it.
The first proposal to amend and improve the Invest in Kids program would broaden the definition of what would be considered a “qualified school” under the program, to include “a non-public school that has been registered with the State Board of Education for at least one year and is currently seeking the status of ‘Non-public School Recognition’ from the State Board of Education under the School Code.” This change would enable roughly 40 Chicago-area Catholic schools that had yet to be recognized by the Illinois State Board of Education to take advantage of the program. Gov. Bruce Rauner (R) had filed an amendatory veto of the program back in January because of his concern the program is leaving too many private schools unable to participate in the program. The second proposal would allow the tax credit to be applied to federal taxes.
While the Invest in Kids program is very small and will reach only a limited number of Illinois students, its enactment was a big step forward for school choice in the Land of Lincoln and gives low-income families a greater opportunity to meet their child’s unique education needs. These proposed changes could help improve the program, and legislators should also consider other ways to do so, such as doing away with the sunset provision and increasing the budget cap.
The goal of public education in Illinois today and in the years to come should be to allow all parents to choose which schools their children attend, require every school to compete for every student who walks through its doors, and make sure every child has the opportunity to attend a quality school.
The following documents provide more information about tax-credit scholarship programs.
School Choice Fallacies: Disproving Detractors’ Allegations Against Tax-Credit Scholarship Programs
https://www.edchoice.org/wp-content/uploads/2017/08/2017-7-Tax-Credit-Brief.pdf
This report from Martin Lueken and Michael Shaw at EdChoice examine tax codes to address claims alleged by school choice detractors, such as: Tax-credit scholarship programs lead to “profit,” “double-dipping,” “get-rich schemes,” and “tax shelters” for donors.
The Tax Credit Scholarship Audit: Do Publicly Funded Private School Choice Programs Save Money?
https://www.edchoice.org/wp-content/uploads/2017/03/Tax-Credit-Scholarship-Audit-by-Martin-F.-Lueken-UPDATED.pdf
In this audit, EdChoice Director of Fiscal Policy and Analysis Martin Lueken updates previous work examining the fiscal effects of private school choice programs on state governments, state and local taxpayers, and school districts. Lueken’s report analyzes savings from tax credit scholarship programs, which allow individuals and businesses to reduce their state tax liability by making a private donation to a nonprofit organization that provides scholarships for children to attend private schools of their choice. This audit looks at 10 tax credit scholarship programs operating in seven states between 1997 and 2014. These 10 programs serve 93 percent of all students participating in tax credit scholarship programs nationwide.
The Effects of Statewide Private School Choice on College Enrollment and Graduation: Evidence from the Florida Tax Credit Scholarship Program
https://heartland.org/publications-resources/publications/the-effects-of-statewide-private-school-choice-on-college-enrollment-and-graduation-evidence-from-the-florida-tax-credit-scholarship-program
This study from Urban Institute scholars Matthew Chingos and Daniel Kuehn shows Florida’s Tax Credit Scholarship Program boosted college enrollment for participating students by 15 percent, with students enrolled in the program for four or more years seeing a 46 percent hike.
A Win-Win Solution: The Empirical Evidence on School Choice (Fourth Edition)
http://www.edchoice.org/wp-content/uploads/2016/05/A-Win-Win-Solution-The-Empirical-Evidence-on-School-Choice.pdf
This paper by EdChoice details how a vast body of research shows educational choice programs improve academic outcomes for students and schools, saves taxpayers money, reduces segregation in schools, and improves students’ civic values. This edition brings together a total of 100 empirical studies examining these essential questions in one comprehensive report.
Ten State Solutions to Emerging Issues
https://heartland.org/publications-resources/publications/ten-state-solutions-to-emerging-issues-2018
This Heartland Institute booklet explores solutions to the top public policy issues facing the states in 2018 and beyond in the areas of budget and taxes, education, energy and environment, health care, and constitutional reform. The solutions identified are proven reform ideas that have garnered significant support among the states and with legislators.
The Public Benefit of Private Schooling: Test Scores Rise When There Is More of It
https://object.cato.org/sites/cato.org/files/pubs/pdf/pa830.pdf
This Policy Analysis from the Cato Institute examines the effect increased access to private schooling has had on international student test scores in 52 countries. The Cato researchers found that a 1 percentage point increase in the share of private school enrollment would lead to moderate increases in students’ math, reading, and science achievement.
2017 Schooling in America: Public Opinion on K–12 Education, Parent Experiences, School Choice, and the Role of the Federal Government
https://www.edchoice.org/wp-content/uploads/2017/11/2017-Schooling-In-America-by-Paul-DiPerna-Michael-Shaw-and-Andrew-D-Catt.pdf
This annual EdChoice survey, conducted in partnership with Braun Research, Inc., measures public opinion and awareness on a range of K–12 education topics, including parents’ schooling preferences, educational choice policies, and the federal government’s role in education. The survey also records response levels, differences, and intensities for citizens located across the country and in a variety of demographic groups.
Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this subject, visit School Reform News, The Heartland Institute’s website, and PolicyBot, Heartland’s free online research database.
The Heartland Institute can send an expert to your state to testify or brief your caucus; host an event in your state; or send you further information on a topic. Please don’t hesitate to contact us if we can be of assistance! If you have any questions or comments, contact John Nothdurft, Heartland’s director of government relations, at [email protected] or 312/377-4000.
Tim Benson joined The Heartland Institute in September 2015 as a policy analyst in the Government Relations Department.
