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More on that proposed $100 million tax credit for private school scholarships

Friday, Aug 4, 2017 - Posted by Rich Miller

* The Sun-Times is the first mainstream media outlet to take a close look at a proposed $100 million state tax credit program for private school scholarships

As Democrats continue to push for an override of Rauner’s school funding veto, state Sen. Andy Manar, D-Bunker Hill, on Thursday characterized the archdiocesan scholarship program as something the governor is asking of Democrats “in order to continue discussions on Senate Bill 1 and a final compromise.”

The program seeks to create scholarships for low- and middle-income students so they can afford Catholic or other private schools, according to the Catholic Conference of Illinois, the Archdiocese of Chicago’s public policy arm. Corporate and individual donations would be funneled through scholarship-granting organizations.

As initially proposed, donors would get a dollar-for-dollar state income tax credit for their contributions. A family of four earning up to $110,000 could qualify for a scholarship for a limitless tuition cost.

Republicans want a $100 million scholarship program paired with a 100 percent tax credit. But there’s now talk of reducing it to 75 cents per dollar, and many want it much lower. Democrats also want a pilot program with a sunset, not a permanent one. […]

Illinois House Speaker Michael Madigan supports the idea that the program could fund scholarships, but not as initially proposed, said his spokesman Steve Brown.

Go read the whole thing.

There’s still the very real question about how this will be funded, however. Nobody seems to have an answer. And that’s important because, as proposed, the plan reportedly contains automatic annual escalators.

       

52 Comments
  1. - winners and losers - Friday, Aug 4, 17 @ 9:40 am:

    Vouchers (tuition tax credits) are a very MAJOR decision, far too important to be decided behind closed doors.

    If the decision is made to do it, they will find $100 million (and much, much more in the future).


  2. - Joe M - Friday, Aug 4, 17 @ 9:47 am:

    If parents want to send their kids to private schools, it should be on their dime, and not come from any state tax dollars.


  3. - lake county democrat - Friday, Aug 4, 17 @ 9:47 am:

    Maybe CTU attacked this already and I missed it, but if I were them I’d be very upset over this. The more kids leave the public schools for private, the more layoffs. Also seems likely to weaken the public schools - the more motivated parents are the ones who will take advantage. Having a real public school choice option (not the soupcon experiment of NCLB) and saving the tax dollars spent on vouchers is a better move.


  4. - Anon221 - Friday, Aug 4, 17 @ 9:49 am:

    From the article: “The Archdiocese of Chicago has long advocated tax credits or vouchers for private school tuition to replenish enrollment.”

    …to replenish emrollment.

    That phrase alone send up some many red flags. If the Catholic schools are having a hard time keeping enrollments numbers up, maybe they need to look at why? Is it the cost? Is it people don’t want to send their kids to those schools? Are the schools located in areas where there is a growing demand for Catholic school education? Giving tax breaks to wealthy donors is ridiculous. Look at Rauner. Look at how much he paid himself to get the governorship. If he, and others like him, can drop that kind of money to buy an office and try to control other members of the Republican party, then they can also afford to do the same with education if they care so much about it. Put their names on some more schools or buildings or scholarships, but keep these foolish private scholarship tax credits out of the mix.


  5. - Juice - Friday, Aug 4, 17 @ 9:55 am:

    Wait, so the Governor wants a cost escalator for his tax credit for private schools even though he AV’d out all of the inflationary increases built into the formula for public schools?


  6. - Jack - Friday, Aug 4, 17 @ 9:56 am:

    Interesting that the Gov AVed all the inflationary adjustments from SB1 while asking for automatic annual escalators for this.


  7. - Roman - Friday, Aug 4, 17 @ 9:56 am:

    Why dollar-for-dollar tax credits for private education-related efforts and nothing else? Don’t poor kids need access to good health care, basic nutrition, and for some, foster care too?


  8. - Free Set of Steak Knives - Friday, Aug 4, 17 @ 9:58 am:

    Rich -

    It seems pretty obvious how they are going to pay for it.

    If the hold harmless is based on enrollment, as enrollment numbers go down in public schools, it pays for the tax breaks for the vouchers.

    Basically, we are creating a nonprofit to serve as a middle man for a voucher program.

    I am surprised the CTU and Claypool haven’t figured this out yet.


  9. - MyTwoCents - Friday, Aug 4, 17 @ 9:59 am:

    Last time I checked the Catholic Church already was a nonprofit organization where donations are deductible. If they care so much solicit donations just like any other charity. But pushing for a 1-to-1 deduction to me smacks of trying to get donors who have ulterior motives than just promoting school choice. Even at a lower donation rate I don’t see why this should even be an issue for the General Assembly. If private citizens or organizations want to set up a nonprofit scholarship organization for kids to attend private school more power to them and the donations can be treated the same as any other charitable contribution.


  10. - Anonymous - Friday, Aug 4, 17 @ 10:08 am:

    Many kids receiving scholarships will be “switchers” so if the average scholarship is about 90% of the state’s spending per pupil, you should save money. (The proposal doesn’t allow “limitless” spending on tuition. That’s an inaccurate fact in the article.)
    Florida is a prime example. They awarded over $500M in tax credits last year and still saved tens of millions. An official analysis of the FL legislature is here: http://www.oppaga.state.fl.us/MonitorDocs/Reports/pdf/0868_1rpt.pdf
    It took time for more public school children to join but as the numbers grew, the state saved tax dollars and public schools actually improved the quality of their education due to the competition.
    If the hold harmless isn’t calculated per pupil, it makes it more complex but can be done. Do analysis of per pupil funding (whatever the final formula will be) and crunch some numbers.


  11. - Crazybleedingheart - Friday, Aug 4, 17 @ 10:08 am:

    Every Democrat who enables this should be primaried and should lose. Period.


  12. - Rod - Friday, Aug 4, 17 @ 10:14 am:

    The irony here for the Governor is immense, first he opposed SB1 because it’s a bailout of CPS, then he supports the voucher tax credit to bailout Catholic school. But it goes further because Governor Rauner promoted some charter schools that were actually located in closed Catholic schools and publicly stated they provided a Catholic like education with strict discipline, thus even further eroding Catholic schools enrollment among lower income Hispanics in Chicago.


  13. - Dee Lay - Friday, Aug 4, 17 @ 10:15 am:

    It’s a tax break for the 1% masquerading as doing something for the children that hurts public schools.

    Again, tie this to an increase of the standards of private schools for ESL and Special education and watch how quickly they run from this bill. You shouldn’t receive taxpayer subsidized education funds and not meet the education standards of the state.


  14. - Anon221 - Friday, Aug 4, 17 @ 10:18 am:

    Anonymous @ 10:08- “…public schools actually improved the quality of their education due to the competition.”

    How many of those private schools offering “competition” to public schools are in very rural areas? To me, every time the “competition” agreement is made, it just reinforces the winners and losers categories in the long run. I posted this yesterday website link. Take a good hard look at it and then decide if there wouldn’t be winner and loser areas created within our state if you believe that actively funding private schools over public schools will work, especially in counties where there may be only one private school with extremely limited resources.

    https://www.privateschoolreview.com/illinois

    Here are some examples:

    https://www.privateschoolreview.com/illinois/alexander-county

    https://www.privateschoolreview.com/illinois/boone-county

    https://www.privateschoolreview.com/illinois/logan-county


  15. - wordslinger - Friday, Aug 4, 17 @ 10:19 am:

    So Catholic schools need taxpayer money because of declining enrollment?

    Aren’t some proponents arguing that public schools with declining erollment should get less taxpayer money?


  16. - Anon221 - Friday, Aug 4, 17 @ 10:22 am:

    Watch out wordslinger, you’re losing “focus” ;)


  17. - We'll See - Friday, Aug 4, 17 @ 10:24 am:

    Roman asks: “Don’t poor kids need access to good health care, basic nutrition, and for some, foster care too?”

    They sure do; and there are State programs that provide funding to private service providers who meet their needs.

    That State’s education funding is reserved public schools.


  18. - City Zen - Friday, Aug 4, 17 @ 10:25 am:

    My local parochial grade schools charge between $7,000-8,000, thousands below what CPS spends per pupil. I see no reason why a means-based voucher system can’t be tried on a small scale. That $110,000 threshold is too high though.


  19. - 360 Degree TurnAround - Friday, Aug 4, 17 @ 10:25 am:

    How do they get around the constitution on this? No tax dollars for church schools?


  20. - d.p.gumby - Friday, Aug 4, 17 @ 10:27 am:

    Sounds like the “Catholic Schools Bailout Bill” presented by Betsy DeVoss. We can’t fund our public schools adequately and Brucie wants to give state money to private schools? Moving the goal posts once more.


  21. - Enviro - Friday, Aug 4, 17 @ 10:27 am:

    The $100 million state tax credit program for private school scholarships is a step toward privatizing public schools for billions of profits in this state and country. This is a road we should not go down.


  22. - wondering - Friday, Aug 4, 17 @ 10:30 am:

    Dollar for dollar? It would cost the “donors” nothing. Back door approach to tax supported Catholic education.


  23. - Dublin - Friday, Aug 4, 17 @ 10:34 am:

    ===Last time I checked the Catholic Church already was a nonprofit organization where donations are deductible.===

    Income deductible, yes. Rauner’s proposal is a Tax Credit. Donate $4000 - reduce your tax owed by $4000.

    The way it is now - $4000 off your income is only about $200 in state taxes. Huge difference.


  24. - Norseman - Friday, Aug 4, 17 @ 10:35 am:

    Let’s rack up all those soundbites from Durkin and Radogno about how we fund this program.

    Great summer for Rauner and his minions. Kill school funding reform and then propose an unfunded $100 million program.


  25. - Robert J Hironimus-Wendt - Friday, Aug 4, 17 @ 10:39 am:

    Two thoughts. First, as I said previously, allowing upper middle class and above people to avoid their tax liabilities to the state by giving those tax liabilities to private schools is unethical. And removing $100 M from the state treasury is fiscally unsound in the current environment. Second, how exactly would this play out in places like West Central Illinois? Assuming my kids were to receive a HS scholarship, they would have to drive 75 miles to school. In other words, this idea would exclude many, many rural kids, and advantage the suburban children, who are already advantaged relative to rural kids.


  26. - wordslinger - Friday, Aug 4, 17 @ 10:53 am:

    CZ, is that one of those conceptual points like the governor makes?

    This is not a means-tested voucher program; it’s a diversion of tax dollars to private organizations to grant scholarships to private schools any old way they choose.

    Given the cuthroat recruiting competition in the Catholic League, I’m guessing many top football and basketball players will be found worthy.


  27. - Pelonski - Friday, Aug 4, 17 @ 10:58 am:

    I have no problem with trying new ways to improve how we educate kids, but I do see several problems with this plan. Depending on the way it would be implemented in the legislation, a 1 to 1 credit could actually result in a better than 1 to 1 benefit for the donor if the donation is still deductible from federal income tax. The same could be the case even if they reduce the credit to 75% for some taxpayers.

    In addition, I don’t think it is health for our democracy to go down a path where taxpayers essentially get to pick which programs they fund with their tax dollars. The result would be programs that generate direct tangible benefits will be fully funded, but programs that benefit society as a whole will be underfunded.

    Finally, it is a constant complain that the tax code is too complex. This plan just adds unneeded complexity. If the state wants to fund scholarships, it would be simpler to do it through a general appropriation.


  28. - wondering - Friday, Aug 4, 17 @ 11:04 am:

    It is, indeed, a tax diversion. My guess is it would be ruled unconstitutional based on the federal anti establishment clause


  29. - st. Jude - Friday, Aug 4, 17 @ 11:05 am:

    Roman asks: “Don’t poor kids need access to good health care, basic nutrition, and for some, foster care too?”

    Yes they do and when those poor kids go to Holy Cross, Mt Sinai or the Advocate hospitals the state pays for their care.


  30. - Amalia - Friday, Aug 4, 17 @ 11:10 am:

    NO. Absolutely not. I’m a person who is the product of non public education and that was a choice my parents made. paying taxes to support public schools is a social contract we all make for the good of society. The Cardinal is presiding over a failing system which he is trying to prop up. Failing because the public school alternatives are better and better, despite what the Governor would have you believe. And because people have increasingly lost faith with the astounding number of lawsuits because children were hurt by priests, never mind an institution in which women cannot serve equally. Roman Catholic schools are closing and merging. People who want their kids in private school can pay on their own dime. And discuss the policy in the light of day, not behind closed doors with the leader of an institution that already gets massive tax breaks.


  31. - Texas Red - Friday, Aug 4, 17 @ 11:32 am:

    =Joe M - Friday,

    “If parents want to send their kids to private schools, it should be on their dime, and not come from any state tax dollars”

    The problem with that statement is that CPS schools perform so poorly on a relative basis compared to private/parochial schools. Keeping the status quo condemns Chicago school kids by forcing attendance at failing schools. The tax credit would open up opportunities for thousands of kids that otherwise might not be able to attend a private/parochial school. It also might engender competition to provide better outcomes in CPS schools as the admin will know that parents have a choice.


  32. - Louis G. Atsaves - Friday, Aug 4, 17 @ 11:38 am:

    Thank you Dublin for the concise explanation showing the dramatic difference between a tax credit and the income tax deduction here.


  33. - Last Bull Moose - Friday, Aug 4, 17 @ 11:41 am:

    I support vouchers. This is a terrible approach. It uses the tax code to set public policy, an approach that has had mixed results. It transfers funding decisions to private individuals while eroding funding for the common good.


  34. - Robert J Hironimus-Wendt - Friday, Aug 4, 17 @ 11:44 am:

    Unless Catholic Schools are willing to increase the number of students served from its current capacity, there is no reason to believe more students will be served in the long run, and no reason to believe poor and working class non-Catholic students will displace Catholic students when enrollments in Catholic schools return to their previous carrying capacity. In the long run, when the number of Catholic and affluent children applying returns to the carrying capacity of the system, Catholic schools will simply increase tuition levels, so as to chase out poor and working class kids who cannot afford the higher tuition even with the scholarships. Alternatively, as tuitions go up, the number of people receiving scholarships will go down. This is quite simply, and failed mathematical model in which the rich avoid paying taxes to the state, and everyone suffers on the basis of an irrational model.


  35. - City Zen - Friday, Aug 4, 17 @ 11:46 am:

    ==This is not a means-tested voucher program; it’s a diversion of tax dollars to private organizations to grant scholarships to private schools any old way they choose.==

    Totally agree. I’m not a fan of how this is structured, although I have no issue with vouchers issued as I described.

    ==Sounds like the “Catholic Schools Bailout Bill” presented by Betsy DeVoss. We can’t fund our public schools adequately and Brucie wants to give state money to private schools?==

    The other option is the parochial school closes and releases all its students to the already underfunded public school districts. If you think your property taxes are high now, wait until you see what happens then.

    Is it cheaper for the state to give a few means-tested vouchers per grade to a parochial school or dumping the entire student body on the public school open market?


  36. - Free Set of Steak Knives - Friday, Aug 4, 17 @ 12:02 pm:

    …my amendment requires any school receiving scholarship funds to meet state standards for sex education, appreciating diversity….


  37. - Last Bull Moose - Friday, Aug 4, 17 @ 12:10 pm:

    RJH-W. I read some of your article on this that you referenced yesterday. (Did not join site to read full article. )

    You assume that the supply after private schools is essentially fixed. This has not been true in the past. Expansion does take time. But if the funds are available, it will happen.


  38. - Huh? - Friday, Aug 4, 17 @ 12:57 pm:

    This is all a big smoke screen for what is really going on - 1.4% and his uber wealthy buddies are looking for another tax deduction for the State.


  39. - Robert J Hironimus-Wendt - Friday, Aug 4, 17 @ 12:59 pm:

    @Last Bull Moose - You are correct. In that essay, I began with the assumption that the number of seats in a building are fixed. I later loosen that assumption, to consider how the costs associated with increasing the number of seats in a building would be related to a voucher system. But in the current case, expanding the number of seats in the school in order to serve more students of need (a charity model) does not seem to apply. The current proposal seems to be about filling empty seats, not expanding the number of seats.

    In the current proposal (which I have not read), if the $100 M is targeted strictly toward scholarships (tuition offset), then unless the private schools are willing to raise private monies to increase the carrying capacity of the school, the number of students served will not change, relative to the original number of students they were serving before the proposal. So in this context, the temporary shortage of families able to purchase private education is being offset by displacing income tax revenues into a scholarship fund that clearly serves the interests of the private school, which is dependent upon full enrollment if it is to survive.

    However, when the time returns where there are enough parents willing to pay for private education (and this will occur), then we should ask how the school decide who gets to fill that fixed number of seats? They could use a lottery (which those with the ability to pay in full would
    resent). They could use set asides for categories of students (a form or discrimination). Or, they could simply raise the cost of education to the point where the previous equalibrium was met - there are enough people willing to pay at the higher price. In this case, those who receive scholarships would now be required to augment that scholarship with family income to meet the new cost. This would drive the poor and working class back out of the schools, now that there are suffient affluent and upper middle class children available. The higher price would mean more money for the school, relative to the number of seats available.


  40. - Robert J Hironimus-Wendt - Friday, Aug 4, 17 @ 1:02 pm:

    @ Bull Moose - if you like, I can see if I have a pdf or word file of the original essay next Monday, and if so, I can send it to you. My email is rjh106@wiu.edu if you want me to look for it..


  41. - JS Mill - Friday, Aug 4, 17 @ 1:13 pm:

    =So Catholic schools need taxpayer money because of declining enrollment?

    Aren’t some proponents arguing that public schools with declining erollment should get less taxpayer money?=

    @ Word- Man, that is restaurant quality right there.

    The irony is not lost on them, they just ignore it.


  42. - Amalia - Friday, Aug 4, 17 @ 2:14 pm:

    Texas Red, you are absolutely wrong. Chicago Public Schools are often a huge bargain, and high quality, according to my many friends with kids. I know of one Chicago neighborhood where the schools are right across the street from each other, RC and public. The public school was very bad for a long time. Now it is award winning and mobbed and thriving with programs not available at the RC school. That RC school now has to advertise after years of snobby selective treatment of applicants. The decline in enrollment is not just monetary. the quality of public schools in Chicago is rising.


  43. - Mama - Friday, Aug 4, 17 @ 2:20 pm:

    Rauner’s plan is not about Chicago kids receiving a better education. Its more about destroying public education in Chicago.


  44. - City Zen - Friday, Aug 4, 17 @ 2:29 pm:

    Amalia - Is the “award winning” neighborhood school a beneficiary of gentrification?

    I have no doubt CPS quality has been rising, but often the biggest gains in student performance in CPS come from schools with shifting demographics.


  45. - WeNeedRide - Friday, Aug 4, 17 @ 2:31 pm:

    How will the poor kids in the voucher program get to the private school? Will public schools have to transport them there?


  46. - Mama - Friday, Aug 4, 17 @ 2:40 pm:

    Will the Catholic schools issue scholarships for students whom need special education/ services? Would Catholic scholarships only go to the best and the brightest students?


  47. - Mama - Friday, Aug 4, 17 @ 2:42 pm:

    What if a parent wants to send their child to a Christian, Hindi or a Jewish school, etc. will scholarships with tax credits be offered to those students too?


  48. - Anonymous - Friday, Aug 4, 17 @ 3:17 pm:

    ==What if a parent wants to send their child to a Christian, Hindi or a Jewish school, etc. will scholarships with tax credits be offered to those students too?==

    And what about Muslim schools?


  49. - TinyDancer(FKASue) - Friday, Aug 4, 17 @ 3:19 pm:

    ==…often the biggest gains in student performance in CPS come from schools with shifting demographics.==

    What about the demographics of private schools?


  50. - IllinoisBoi - Friday, Aug 4, 17 @ 3:23 pm:

    Not one cent for religious schools. If the churches that sponsor them start paying taxes, I might change my opinion.


  51. - JS Mill - Friday, Aug 4, 17 @ 3:32 pm:

    I guess this would make parochial schools and their families “tax eaters”?


  52. - Amalia - Friday, Aug 4, 17 @ 4:24 pm:

    @ City Zen re the award winning Chicago Public school across from a RC school. No. Not gentrified. The neighborhood was as it has always been. The thing that changed was attention to the school. More people decided to send their kids and the CPS gave it more attention. This is not the only place where this is true.


Sorry, comments for this post are now closed.


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