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

Implications for Illinois’ Future

In addition to budget problems made worse by a sluggish economy, Illinois faces other challenges. The state ranks a dismal 49th out of 50 in providing public schools with equitable funding.34 A recent study conducted by The Education Trust similarly found that Illinois ranks 49th out of 50 states in providing tax dollars to schools with a high concentration of low-income students. In fact, according to the group’s analysis, schools teaching the largest number of poor students in Illinois receive $2,060 less per student from state and local government sources than schools with the fewest low-income students.35 Additionally, state legislators and Governor George Ryan have not increased per-pupil spending for the 2003 budget cycle, instead choosing to maintain the current foundation funding at $4,560 per pupil, forcing schools to once again rely on other sources to adequately fund critical public education programs.36

These funding inequities promise to get worse as Illinois has shifted more of the burden of funding public education to local taxpayers.37 As discussed above, in the final 2003 budget (July 1, 2002 through June 30, 2003), Governor George Ryan and state legislators have decreased general state aid to education by $111 million.38 Essentially, the state has decreased its share of education costs from 33.5 percent in the current budget to 31.5 percent in the 2003 budget.

State officials claim that an increase in federal allocations and property taxes will ensure an increase in education revenues for the following school year. However, federal allocations are aimed at specific programs such as special education and bilingual education, and at implementing the recently reauthorized federal Elementary and Secondary Education Act. Educators have suggested that any increase in local and federal funds would be woefully inadequate to pay for the increasing costs of teacher salaries, health care coverage for staff and other expenses.39

To offset the decline in state spending, Chicago-area taxpayers could see a hike in property taxes to the maximum allowed by law. In Chicago, a 3.8 percent hike in taxes would add $20 a year to the tax bill of a home with a fair market value of $100,000. This would generate approximately $57 million in new tax dollars.40 Yet many public school districts have already relied heavily on tax increases as a means to offset the significant drop in state funding. One such district is Springfield, where local property tax revenue—which pays for approximately 59 percent of its education budget—has risen for each of the past five years to offset state funding reductions.41

Even many school systems serving relatively affluent areas are taking it on the chin financially. For example, DuPage County schools will lose $10.5 million in general state aid and $3.3 million in special education funding. The county’s largest school district, Indian Prairie Unit District 204, will take the biggest hit, losing an estimated $7.7 million. State officials hope that rising home values and economic growth, coupled with more federal money, will help offset the decrease from the state.42 Additionally, a flat per pupil foundation level further exacerbates this disparity in school funding.43

These budgetary pressures have a major impact on both teacher salaries and the teaching conditions within school districts, restricting the ability of less affluent districts to attract and retain a quality teaching force. The consequences are well documented.

In September 2001, the Chicago Sun-Times published a series of investigative reports on how the city’s poor, minority and low-scoring public schools are less likely to hire certified teachers. In fact, such schools are five times more likely to employ teachers who have failed at least one certification test.44 Similarly, according to a recent audit conducted by the Chicago Board of Education, more than 900 teachers—one in every five—did not have full certification to teach all their students. In the 81 probationary schools in Chicago—those with the greatest need and lowest test scores—22 percent of teachers were not adequately certified to teach their classes.45

The lack of qualified teachers and adequate funding has created an appalling achievement gap between Illinois’ low-income students and those who live in higher-income neighborhoods. A recent state-commissioned study conducted by Northern Illinois University’s Glen McGee (formerly the state superintendent of schools) criticizes the current state administration for not doing enough to help low-income schools. For example, last year, only 40 percent of low-income third-graders scored at their grade level compared with 74 percent of higher-income students. In high schools, even fewer low-income students—less than a third—met reading standards compared with 63 percent of their higher-income counterparts.46

While the $61 million diverted to tuition tax credits in 2000 would not have solved all these problems, it could have helped Illinois target funding to low-income public school districts. These additional funds would have been especially welcome at a time when a weak economy is placing additional hardships on school districts across the state.

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