Lawmakers Introduce Bill to Extend Private School Tax Credit from Illinois

Illinois lawmakers are considering a bill to extend the private school tax credit for another five years. The private school tax credit from Illinois offers private school scholarships to low-income families. If the program is extended, it would prevent thousands of children from having to leave their schools.

Private school tax credit from Illinois: what does the new proposal say?

On Tuesday, Illinois State House Democrats introduced a bill to extend the private school tax credit, officially called the School Voucher Tax Credit Program, for five more years. Specifically, House Democrats introduced HB 4194, which modifies and extends the School Voucher Tax Credit Program through 2028.

House Democrats proposed HB 4194 on the first day of the six-day veto session. The bill is being portrayed as a compromise to get support from progressives and supporters of public education.

Republican Gov. Bruce Rauner originally signed this legislation into law in 2017, called the “Invest in Kids” program.

The program offers a 75% income tax credit to individuals or businesses that contribute to qualified scholarship granting organizations. Recipient organizations then use that credit to provide private education scholarships to eligible students.

In addition to extending the private school tax credit from Illinois through 2028, the new proposal also aims to reduce the maximum annual contributions from the state to $50 million from $75 million.

So, if the new proposal is approved, instead of the 75% tax credit, donors will receive a 100% credit on the first $5,000 they donate. On any additional donation, the donor will get a 65% tax credit if the children they sponsor live in underserved communities and a 55% credit otherwise.

Moreover, the proposal also hopes to reduce the annual limit for tax credits from $1 million to $500,000. The program is set to expire on December 31.

School Voucher Tax Credit Program: will it get enough support?

It remains unclear if the new proposal will pass through the General Assembly. Not all Democrats are in favor of extending the program due to several reasons, including criticism that the program failed to achieve its objective of supporting children from underserved communities.

Republicans, on the other hand, did call for extending the program during budget negotiations, but those calls were ignored by Democrats, who passed the budget with GOP support. Even though Republicans broadly support extending the School Voucher Tax Credit Program, there are disagreements over how long they want the program to be extended.

Last week, Gov. J.B. Pritzker said to support the bill to extend the program in any form. However, on Tuesday, the governor sought to distance himself from the program he once wanted to repeal.

Teachers unions are against extending the program. The Illinois Federation of Teachers and the Illinois Education Association accused the governor of siding with anti-public education Republican governors in other states and disregarding the values of the Democratic Party.

Source valuewalk