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Families Lament, Public School Advocates Celebrate End of Controversial Scholarship Tax Credit

Patti Serpa is a single mother of five who relies on a state-sponsored tax credit to send her youngest, 12-year-old Santos, to St. Pius V School, a Catholic grade school in Chicago’s Pilsen neighborhood that she feels provides him with a better education than his former public school.

“Being at St. Pius, it’s a family,” Serpa said in Springfield last week, where she and dozens of others gathered to demand lawmakers keep the tax credit scholarship program alive. “I have all the teachers and principal’s numbers, like their cellphone numbers. When you’re a single parent you look for stuff like that.”

The eleventh-hour effort to save the Invest in Kids tax credit scholarship program, mounted during the final week of the General Assembly’s last session of the year, failed as lawmakers adjourned without taking up a proposal to extend it beyond Dec. 31.

Invest in Kids prompted fierce debate over the merits of what some equate to a politically volatile school choice voucher program. While supporters say the tax credit gave children in low-income families a shot at a better education, opponents argued it failed to adequately benefit those kids and chipped away at public education. Both sides said they believe it was the first time such a voucher program has been discontinued.

“Around the country, we’ve seen voucher programs only grow, never end,” said Cassie Creswell, of the advocacy group Illinois Families for Public Schools, which opposed Invest in Kids. “So it’s … really a historic rollback of school privatization, which has been gaining speed, especially in the last couple years.”

Invest in Kids was signed into law by Republican Gov. Bruce Rauner in 2017. It gave individuals and corporations a 75 percent tax credit, capped at $1 million, on donations to private school scholarships. Total annual credits were capped at $75 million. Various nonprofits process the applications and distribute the money.

The program had broad support among Republican legislators, who back a school choice agenda and have fought against public school teachers unions. Democrats were divided on an extension for the program.

Last month, four Democratic lawmakers tried to save the program by backing a bill that would’ve extended the program through 2028 and reduced the maximum annual credits awarded by the state to $50 million from $75 million.

Also, instead of the current 75 percent tax credit, the proposal called for donors to get a 100 percent credit for the first $5,000 they contribute, then a maximum 65 percent tax credit for any additional amount if the children they sponsor live in underserved communities and a maximum 55% credit if the children don’t. The annual limit for tax credits would be reduced to $500,000 from $1 million.

But, in addition to arguments against the use of public tax credits to fund private schools, many of which are connected to religious organizations, some Democrats expressed concern that not enough children from low-income families were benefiting from the program, especially Black and Latino children — though the latest proposal was aimed at easing those concerns.

During the 2022-23 school year, no Black students received the scholarships at more than half of the schools participating in the program, and there were no Latino recipients at about a third of the schools, according to data compiled by the Illinois Department of Revenue.

Only about a quarter of the money in the program went to low-income students, and roughly the same percentage went to students from areas with at least one low-performing public school, according to the Department of Revenue data.

Democratic state Rep. Fred Crespo said that in the weeks leading up to adjournment, some House Democrats felt the state should have other funding priorities.

“Some people feel that that money should go to public schools. Others probably felt that, ‘Well, it’s money that could be invested in folks and not-for-profits that provide services to people with disabilities,’” said Crespo, of Hoffman Estates.

A Democratic lawmaker who supports the program said the bid for an extension was hurt because some advocates, particularly the conservative Illinois Policy Institute, tried to turn the issue into a larger crusade against politically powerful teachers unions like the Chicago Teachers Union and the Illinois Federation of Teachers, which are strong political allies and campaign contributors to many Democratic lawmakers. The institute’s long-standing anti-union agenda was evident in its support of Rauner, who waged an unsuccessful war against public service unions allied with Democrats.

“Once the battle became that ideological, it’s just not going to pass with legislative Democratic majorities,” said the lawmaker in support of the Invest in Kids program, who asked not to be identified because he did not want to publicly comment on a politically sensitive issue.

While it has traditionally supported Republican candidates in Chicago’s suburbs, the Illinois Education Association saw the legislature’s decision to not extend Invest in Kids as a major victory.

“The voucher system was intentionally created with a lack of oversight and accountability, leaving us with no data to measure its effectiveness,” the IEA said in a statement. “We need to focus on providing the necessary funding to our public schools so that all children in Illinois continue to have access to a high-quality, public education.”

Creswell and some Democrats also argued that scholarship money went to private schools that deny access to students for reasons that include sexual orientation.

On Friday, supporters of Invest in Kids lamented its impending demise during a news conference at Chicago Hope Academy, a private school on the West Side. Ike Muzikowski, Hope’s principal and president, said 150 students — roughly half of the school’s student body — benefit from the tax credit scholarship program.

“Removing these scholarships removes opportunities from students who deserve an equitable opportunity to choose something better for themselves,” Muzikowski said.

Creswell said it should be up to private schools to raise money from donors for students who need scholarship help.

“These donors who have been getting tax credits should continue writing their checks to schools and to scholarship organizations,” Creswell said, noting that those donations will be eligible for federal tax deductions as they were before Invest in Kids was created.

While acknowledging that donors would be free to continue giving to scholarship funds after the tax credits end, House Republican leader Tony McCombie of Savanna said, “Unfortunately, some folks might not be able to financially do that.”

All 40 members of the House GOP were ready to support an extension of the program, and McCombie said she’ll continue to push for it to be revived.

“It is my hope that over the remainder of the year that the advocates for and against this will actually come together, sit at a table together and will come up with a remedy and we’ll whip the votes on both sides of the aisle and come to the speaker and to the [Senate] president and say, ‘This is my roll call. We have the votes. And let’s call this bill,’” McCombie said.

If Democrats who chose to let the program lapse are committed to increasing funding for public education, “I would love to hear that as the reason of the bill not being called,” McCombie said.

“If the governor’s saying that’s what he’s going to be doing, I’d be interested in hearing that,” McCombie said.

Democratic Gov. J.B. Pritzker has shifted positions on the program in the last five years.

As a candidate for governor in 2018, he vowed to repeal Invest in Kids, but after taking office he approved a legislative initiative that extended the program for a year beyond its original expiration date and expanded it to private trade schools.

During this past spring’s legislative session, Pritzker was noncommittal, though he’s also said the program should be modified to allow for a federal as well as state income tax deduction for donations.

Last month, Pritzker indicated he’d sign a bill extending the program if the legislature approved one, only to later walk back those comments by saying he’d defer to lawmakers on whether a proposal would move forward.

Days before last week’s final legislative session, the governor told a reporter that “support for public education is really where my focus is.”

Pritzker’s office did not respond to a request for comment on the decision by legislative Democrats to let the program lapse.

At Friday’s news conference on the West Side, Tiffine White of North Lawndale credited Hope Academy with keeping her children, who attended the school with the help of Invest in Kids scholarships, away from street violence. Two of her kids graduated from Hope Academy and enrolled in college, while two others are seniors at the school. They will be able to graduate without their scholarships being affected, she said.

“Without the scholarship, I don’t know what would have happened. My boys might be a statistic of the streets,” she said.

Some supporters said they worry more religious and private schools will be at risk of closing if they lose students who are able to attend thanks to the scholarship program.

Bob Gilligan of the Catholic Conference of Illinois said Invest in Kids doesn’t present a challenge to either teachers unions or public schools, noting that the Catholic Church has supported increased funding for public education in Illinois.

Eva Villalobos, whose four daughters attend St. Gall School in the Southwest Side Gage Park neighborhood, said it would cost more than $20,000 per year to keep her kids in the school without the scholarships.

“If I go back to work, maybe I could afford it paycheck to paycheck,” said Villalobos, a former accountant. “But what about all of these other families that don’t have careers and do not have those options?”

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