Advocacy groups are pushing Gov. J.B. Pritzker to reconsider reducing a tax break for scholarship donations citing the benefits a scholarship program has provided to Illinois students.
In his February budget proposal, Pritzker requested tax deductions for donations to the Invest in Kids Tax Credit Scholarship program be reduced from 75% to 40% to save the state $14 million as the state faces a tight budget year after COVID-19 slowed revenue. However, advocates argue the deduction's benefits need to be maintained.
In a letter to parishioners to be published in bulletins this weekend, Illinois' Catholic Bishops, including Springfield's Thomas John Paprocki, are calling on the program to be saved and expanded.
"Over the past three years, the Invest in Kids program has proven to be a resounding success," the bishops wrote. "Unfortunately, Governor Pritzker has recommended severely cutting the Invest in Kids program. If his budget recommendation is enacted, the program will struggle to remain viable."
The Catholic Conference of Illinois is asking for the tax credit to be expanded by allowing scholarships to be used for trade schools, increase the tax credit, and allow students to renew the scholarship.
"Support this plan which will not only benefit families in our Catholic schools, but more importantly, will provide otherwise unattainable educational opportunities for all working class families. All children deserve these opportunities no matter their family income. The popularity of the Invest in Kids program proves great support for this principle," the bishops wrote.
More: Takeaways from the analysis of Pritzker's fiscal year 2022 state budget proposal
According to a new poll released Tuesday, the tax credit is growing in popularity. In an April poll by ARW Strategies surveying 800 Illinois voters, 61% said they support the tax credit, compared to 54% in October. The poll also found 67% of Democrats, 71% of Black voters, and 81% of Latino voters support the credit. Sixty percent said they do not support Pritzker's plan to cut the credit.
"The poll results demonstrate strong, diverse support for the Invest in Kids Tax Credit Scholarship Program, particularly within Black and Latino communities," said Empower Illinois President Anthony Holter.
The tax credit was passed with bipartisan support when Illinois lawmakers made changes to the state's public school funding formula in 2017. Since the scholarship began the following year, over 20,000 students have used it to attend 650 different schools, according to the Catholic Conference.
"Participating schools have provided excellent education to these students, even during the pandemic, through in-school, high quality instruction. And the need is still not being met. Already in 2021, there are over 25,000 more students waiting in line for scholarships, a testament to the need to expand this program," the bishops said.
State Sen. Melinda Bush, D-Grayslake, said the benefits the program provides to low-income students was a key sticking point for lawmakers in 2017.
"The tax credits made sense to us because they were given to families that really needed the help in order to send their children (to school). I think we're going to look at that one really closely," Bush said.
Republicans consider the tax credit a good way to allow families to choose where to send their kids to school so money is not such a barrier to education. They say reducing the tax credit will limit the amount of donations and amount of students who can benefit.
"(Reducing the tax credit) will mean that more families who are looking for school choice, looking for an alternative for their students, they won't be able to afford it. People who have money to pay for private education will be able to send their kids there. People who don't — it just won't be an option for them. I think it's a big step backwards for Illinois' education system," said state Rep. Tom Demmer, R-Dixon.
More: Pritzker's budget seeks to net state $932 million by eliminating corporate loopholes
Pritzker included reducing the tax credit as part of his plan to eliminate or reduce "corporate loopholes" in this year's budget to save the state money. Reducing the scholarship credit is the only tax break that can also hit individual taxpayers Pritzker is proposing.
"I don't see that as a corporate loophole, but I see it as a place where we recently gave a tax credit and perhaps we should be looking at all the tax credits that we added over the last few years to see which ones are actually producing what we thought they were going to produce," Bush said.
Pritzker's budget proposal has not yet been put into legislation and it is not clear which tax break cuts will be passed by lawmakers. The General Assembly has until the end of May to pass the next state budget.