Federal

After Fierce Fight, Illinois Enacts Tax-Credit Scholarship Program

By Madeline Will — August 31, 2017 | Updated: September 01, 2017 4 min read
Illinois Gov. Bruce Rauner, left, shakes hands with State Rep. Will Davis after passage of an education funding bill that includes a $75 million tax-credit-scholarship program students can use to pay tuition at nonpublic schools.
  • Save to favorites
  • Print

After a rocky legislative battle, Illinois has become the 18th state to establish a tax-credit-scholarship program for students to use toward tuition at a nonpublic school.

When taxpayers contribute to the scholarship fund, they will get a tax credit of 75 percent of their donation—up to $1 million annually for an individual donor. The state caps the tax credit amount at $75 million, which means the scholarship fund could reach $100 million.

The money may be donated to a specific school or “subset” of schools, but not to a particular student. Scholarship recipients must have a total household income of less than 300 percent of the federal poverty level, meaning $73,800 for a family of four.

The five-year pilot program was tacked on to a larger bill that overhauls school funding in Illinois and funnels more state money into low-income districts—legislation that supporters have called historic. But the tax-credit-scholarship program drew sharp opposition from the state teachers’ unions, which called it an attack on public schools. Illinois House Democrats initially voted against the bill, before the measure passed with two votes to spare.

GOP Gov. Bruce Rauner signed the bill on Aug. 31.

‘A Bipartisan Approach’

Democratic and Republican lawmakers touted the legislation as a true compromise, saying that nobody liked 100 percent of it.

“This has been as much of a bipartisan approach to this type of program as you’re going to get,” said Josh Cunningham, an education program manager for the National Conference of State Legislatures. He said the measure addresses typical criticisms about issues such as accountability and lack of transparency.

For example, Illinois allows qualifying students to use the scholarships in any eligible private school in the state; most state programs have a list of approved schools, Cunningham said. And Illinois requires the private nonprofits that issue the scholarships to give priority to low-income students and students attending low-performing schools.

Also, Illinois requires that schools accepting scholarships administer the annual state test to the scholarship recipients. The state will later have independent researchers compare the outcomes of scholarship recipients to those of public school students across the state.

That requirement differs from most other states’ programs, said Jason Bedrick, the director of policy for the pro-school-choice group EdChoice. Typically, programs allow participating schools to choose from a menu of national norm-referenced tests, he said.

“If [parents] want something different, it doesn’t make sense to use the same type of test [as public schools],” he said, adding that he found this requirement problematic.

For the teachers’ unions, those accountability measures, as well as anti-discrimination language and a five-year sunset clause, are encouraging, said Dan Montgomery, the president of the Illinois Federation of Teachers.

But “it would be easier to swallow that pill if the state was doing its job fiscally elsewhere,” he said, pointing out that although the state funding bill includes an additional $350 million for schools, ideally, funding levels would be much higher.

“We are really so far away from the mark that it’s really hard for us to say, ‘Really? We’re going to essentially take $75 million out of the state’s revenue coffers to hand to wealthier people?’ ” Montgomery said. “It didn’t seem like good policy to us.”

Supporters of school choice, though, applauded the program. Adam Peshek, the director of education choice for the Foundation for Excellence in Education, said the program will benefit low-income and special-needs students who aren’t getting their needs met by public schools.

Critics, however, have said tax-credit scholarship programs in other states usually end up benefitting wealthier families.

The number of Illinois students who will benefit from the program could vary depending on the size of the individual scholarships, which will be drawn from a maximum fund of $100 million. Bedrick estimates that up to 20,000 students will benefit, or about 1 percent of the statewide student population.

Democratic lawmakers have estimated that the number will be closer to 6,000, according to news reports.

More to Come?

A recent nationally representative public-opinion poll from Education Next, a journal published by Stanford University’s Hoover Institution, found that tax-credit-scholarship programs command the highest level of support among all choice proposals, including charter schools.

Peshek said when state legislatures next reconvene, there will likely be additional tax-credit-scholarship legislation proposed.

“If you look at the number of tax-credit scholarships enacted, ... more than half of them have been created in the last six years,” he said. “There’s a growing interest in these programs. We’re getting at least one or two a year from states.”

And the passage in Illinois proves that states don’t need a “perfect political situation” to pass this sort of choice program, Peshek said. He pointed to places like Florida, where a tax-credit-scholarship program was initially a Republican initiative but has gained support from some Democratic legislators, who have voted on subsequent expansion measures.

“Ten years from now, people will look back and find it hard to believe that this wasn’t [considered] a win-win for everyone,” Peshek said.

Coverage of how parents work with educators, community leaders and policymakers to make informed decisions about their children’s education is supported by a grant from the Walton Family Foundation, at waltonk12.org. Education Week retains sole editorial control over the content of this coverage.
A version of this article appeared in the September 06, 2017 edition of Education Week as After Fierce Fight, Illinois Enacts Tax-Credit Scholarship Program

Events

Jobs Regional K-12 Virtual Career Fair: DMV
Find teaching jobs and K-12 education jubs at the EdWeek Top School Jobs virtual career fair.
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
College & Workforce Readiness Webinar
CTE for All: How One School Board Builds Future-Ready Students
Discover how CPSB uses partnerships and high-quality digital resources to build equitable, future-ready CTE pathways for every student.
Content provided by Cengage School
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Artificial Intelligence Webinar
Making AI Work in Schools: From Experimentation to Purposeful Practice
AI use is expanding in schools. Learn how district leaders can move from experimentation to coordinated, systemwide impact.
Content provided by Frontline Education

EdWeek Top School Jobs

Teacher Jobs
Search over ten thousand teaching jobs nationwide — elementary, middle, high school and more.
View Jobs
Principal Jobs
Find hundreds of jobs for principals, assistant principals, and other school leadership roles.
View Jobs
Administrator Jobs
Over a thousand district-level jobs: superintendents, directors, more.
View Jobs
Support Staff Jobs
Search thousands of jobs, from paraprofessionals to counselors and more.
View Jobs

Read Next

Federal McMahon Still Wants to Relocate Special Ed.—And Other Budget Hearing Takeaways
The education secretary also told skeptical lawmakers that Ed. Dept. program transfers are working.
6 min read
LindaMcMahon03B
Secretary of Education Linda McMahon prepares to testify before a Senate appropriations subcommittee on the U.S. Department of Education's fiscal 2027 budget proposal in Washington on April 28, 2026.
Marvin Joseph for Education Week
Federal Part-Time Tutor, Game Developer Charged With Attempted Assassination of Trump
Cole Tomas Allen apologized to friends and former students, according to a criminal complaint.
The Associated Press & Education Week Staff
4 min read
A courtroom sketch depicts Cole Tomas Allen, left, the California man arrested in the shooting incident at the correspondents dinner in Washington, appearing before Magistrate Judge Matthew J. Sharbaugh, in federal court, Monday, April 27, 2026 in Washington. Allen worked as a part-time tutor, according to an online resume.
A courtroom sketch depicts Cole Tomas Allen appearing before Magistrate Judge Matthew J. Sharbaugh, in federal court on April 27, 2026 in Washington. Allen worked as a part-time tutor, according to an online resume.
Dana Verkouteren via AP
Federal Man Accused of Firing Weapon at Event With Trump Has Background as Tutor and Programmer
Social media posts said the individual has worked for company that has provided test-prep and academic support.
2 min read
U.S. Secret Service agents surround President Donald Trump before he was taken from the stage after a shooting incident outside the ballroom during the White House Correspondents Dinner, Saturday, April 25, 2026, in Washington.
U.S. Secret Service agents surround President Donald Trump before he was taken from the stage after a shooting incident outside the ballroom during the White House Correspondents Dinner, Saturday, April 25, 2026, in Washington. The alleged assailant's online resume said he worked for a private tutoring company.
Alex Brandon/AP
Federal A Federal School Cellphone Policy? Big Barriers Stand in the Way
Other countries have nationwide restrictions, but in the U.S., states and districts have set the agenda.
6 min read
Students use their cellphones as they leave for the day the Ramon C. Cortines School of Visual and Performing Arts High School in downtown Los Angeles on Aug. 13, 2024.
Students use their cellphones as they leave for the day the Ramon C. Cortines School of Visual and Performing Arts High School in downtown Los Angeles on Aug. 13, 2024.
Damian Dovarganes/AP