Misplaying the Angles: A Closer Look at the Illinois Tuition Tax Credit Law


By enacting tuition tax credits, Illinois has severely short-changed its low-income public schools and their students. At a time when the state’s tax collections have been severely reduced by the nation’s economic slowdown, diverting $61 million in 2000 through tuition tax credits, with similar or greater costs foreseeable each year thereafter, only adds further strain to public schools across Illinois.

Even as the recently reauthorized federal Elementary and Secondary Education Act raises the stakes much higher for the 50 states, Illinois’ budget cuts are forcing public schools to make do with fewer resources, creating major obstacles to improving student performance—particularly among low-income school districts. Diverting tax dollars to relatively affluent families only serves to exacerbate, rather than ameliorate, the inequities in educational resources and in public schools.

As noted earlier, this effect is not unique to Illinois.47 According to the Arizona Department of Revenue, in 1998 more than 70 percent of that state’s tax credit claimants had an income surpassing $50,000.48 In contrast, less than a quarter of the claims were made by taxpayers earning less than $50,000. Worse yet, only 2 percent of tax-credit claims were made by families earning less than $20,000.49

In Pennsylvania, several private school officials have admitted that students already enrolled in their classrooms are using most of the tuition tax-credit scholarships provided under the state’s law. A number of the schools benefiting from Pennsylvania’s tuition tax credit are in affluent and middle-class neighborhoods, rather than low-income areas where the neediest students tend to live. In the first year that the Pennsylvania tax credit was available (2001), approximately three-fourths of the total donations to tuition organizations—nearly $13.6 million—went to organizations that directly support religious schools.50

The fact that low-performing public schools are more likely to operate in low-income districts and neighborhoods only reinforces the need for states to invest in these schools. Efforts to adequately fund low-performing schools and to ensure that all students have access to a high-quality public education are seriously undermined if already limited funding is further reduced by tax credits that divert needed funds to wealthier families.

In short, the experience in Illinois closely reflects the conclusions reached by PFAWF and others who have examined tuition tax credit programs in other states. Such tax credits primarily benefit wealthier citizens, do not help poor families, and instead undercut states’ abilities to target needed resources to help raise student achievement in less affluent public schools.

Although tuition tax credit advocates in Illinois and other states have framed their efforts as a way to assist low-income families, ample evidence reveals that this message is—in the words of a supporter—nothing more than an “angle.” Like the Arizona and Pennsylvania programs, Illinois’ tuition tax credit undermines the historic commitment that the nation has made to guarantee all children a high-quality education.

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