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Keep investing in Illinois’ Invest in Kids tax credit scholarships

Illinois state lawmakers resisted efforts to cut tax credit scholarships in Illinois, instead extending the program. Now low-income and minority students need them to make the scholarships permanent so they can get the educations that best fit their needs.

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Private schools were among the only places children in Illinois could go to class in person during much of the 2020-2021 pandemic school year, but too many families continue to be locked out of access to private options because of tuition costs.

There should be a way for students from low-income families to apply for scholarship money – and there is. Except Gov. J.B. Pritzker has already tried to slash the program. Without any action from Springfield, Illinois’ tax credit scholarships, which serve thousands of students, will go away in two years, leaving kids and families stranded.

Illinois’ education lifeline: The Invest in Kids Scholarship Tax Credit Program, which passed in 2017, allows individuals and businesses to donate money to a scholarship granting organization and receive a tax credit of 75 cents for every $1 donated, up to a maximum credit of $1 million. Scholarship money is awarded to families whose income does not exceed 300% of the federal poverty level. The average annual household income of participants who received scholarship money in 2020 through Empower Illinois, the largest scholarship granting organization in the state, was $38,000, and 42% of students participating through Empower Illinois were Black or Hispanic. Illinois’ tax credit scholarship program offers low-income families scholarship money so their kids can attend the schools that best suit their needs.

As of May 2021, 26,000 children were on the waitlist. Pritzker tried to squeeze the program in the most recent budget, calling it a “loophole” that needed closing. He wanted to scale back the program dramatically.

It was an unpopular move that ultimately failed: one look at the waitlist for scholarships shows just how much people want this school choice program to expand.

The need: Better options for families are in high demand. Only 1 in 10 Illinois public school students had access to fully in-person classes for the first eight months of the 2020-2021 school year, and 21% of Illinois public school students missed class so often – at least 10% of their classes – they were considered chronically absent this past school year. The lack of in-person learning and increased absenteeism were reflected in significantly lower test scores.

The lack of available work opportunities coupled with fewer schooling options for children forced many mothers to stay home. Research shows states where schools were ordered to reopen had higher labor force participation for prime working-age mothers than other states. The failure of so many Illinois school districts to reopen schools in a timely manner likely contributed to the much larger absence of working moms from Illinois’ labor force when compared to similar women in other states. Invest in Kids is really an investment in all of Illinois, from children to parents to businesses.

The Clodfelters: “I think that it’s very important for people to have the ability to donate to the tax credit scholarship program because they care about the educational needs of the community and that people have the choice and a right to get the education that they want for their children,” said Bose Clodfelter, whose son received an Invest in Kids scholarship that allowed him to leave bullying behind and thrive at a different school. “It’s very important that politicians allow this tax credit to continue so my family can have the opportunity to be a part of a school system where our children and my family as a unit thrives.”

Pritzker’s attempt to pull the plug: This year, Pritzker tried and failed to reduce the current 75% tax credit to 40%, which he said would have gained $14 million in general revenue funds. But the loss would be to low-income families and students who depend on tax credit scholarships for their education. Instead, state lawmakers saved and extended the program through 2023.

Still, time is running out for the program and the kids who depend on it.

Extend and expand: Making the scholarship opportunity permanent would invest in life-changing educational support for students. State lawmakers have an opportunity to make the scholarships permanent. And the children they help are some of their more vulnerable constituents.

Here are five quick suggestions for how Illinois lawmakers can improve the program:

  • Make the program permanent.
  • Secure “superpriority” status for kids who are currently enrolled in the program. Students already in the program have priority in consideration, but they are grouped with other priority categories. There is no guarantee they will receive scholarships for subsequent school years.
  • Make donations fully creditable against state taxes, or allow federal deductions for the 25% of donations that are currently not creditable against state income taxes.
  • Allow businesses to designate particular schools as the recipients of their donations. Individual donors can do this now, but corporations, partnerships and trusts cannot.
  • Expand to pre-K. The program currently applies only to K-12 schools.

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