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Illinois Approves Tax-Credit Scholarship Program

September 29, 2017

School choice proponents celebrated a victory in Illinois as the governor signed a budget that includes a tax-credit scholarship program.

Tax-credit scholarship programs grant individuals and companies a full or partial tax credit for donations to fund private school scholarship organizations. Illinois had no school choice programs before this law passed.

In late August, Gov. Bruce Rauner signed into law an education funding bill giving individuals and corporations a 75 percent tax credit for donations to the program. Students whose family income is below 300 percent of the federal poverty level are eligible to receive the scholarships. The program is capped at $75 million in tax credits and is set to begin in the 2018 fiscal year. It will sunset after five years unless the government renews it.

Prioritizing Low-Income Kids

Mindy Ruckman, a government affairs legislative analyst at the Illinois Policy Institute, says the tax-credit scholarship program will benefit low-income students at the worst public schools.

“For the first time in Illinois’ history, low-income students will have a chance to escape failing public schools,” Ruckman said. “Families earning $73,800 or less are eligible to apply for the scholarship program. Scholarships will be prioritized for kids living in districts with underperforming schools.”

‘An Important Step’

Ruckman says other forms of school choice, such as vouchers and education savings accounts, would be better than the scholarship program, but Illinois families are fortunate to have any alternative to government schools at this point.

“Vouchers give money to students,” Ruckman said. “Under Illinois’ tax credit scholarship program, money goes to schools. Vouchers are preferable, but the tax credit scholarship program is an important step toward greater school choice in Illinois.”

Shortchanging Change

Jason Bedrick, director of policy for EdChoice, says the program has much room for improvement.

“First, it will only provide scholarships for about 0.5 percent to 1 percent or so of the total K-12 student population in Illinois,” Bedrick said. “That will help fill some empty private school seats, but it won’t spur system-wide innovation. The cap on the tax credits should be significantly increased to aid more families.

“Second, the law has a sunset clause that ends the program after five years,” Bedrick said. “The clause should be removed so that the program can continue indefinitely. Third, the program mandates that schools accepting tax-credit scholarship students administer the state test to those students. Since tests drive curriculum, this is a roundabout way to impose the state curriculum. Families who want the state curriculum already have thousands of schools to choose from, but many families are looking for something different.”

Testing Freedom

Bedrick says to make this program a true alternative to government schools, the state should allow private schools to use tests of their choosing.  

“It doesn’t make sense to impose the same test on all schools,” Bedrick said. “Instead, the best way to provide parents with information about school performance while giving those schools the autonomy that parents value is through nationally norm-referenced (NNR) tests, like the Stanford 10 or Iowa Test of Basic Skills. Allowing private schools to select from a menu of NNRs—as most already do—appropriately balances accountability and autonomy.”

Lindsey Schulenburg (lindseys.heartland@gmail.com) writes from Chicago, Illinois.

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Lindsey Schulenburg writes from Chicago, Illinois.
lindseys.heartland@gmail.com