Scholarship tax credits could be reduced under state plan

By Michelle Martin | Staff writer
Wednesday, March 3, 2021

Kiara Valdivia, a second grader at St. Ann School, 2211 W. 18th Place, and an Empower Illinois tax-credit scholarship recipient, looks through a book at her school on Feb. 10, 2021. (Rob Hart/Chicago Catholic)

Advocates for tax-credit scholarships in Illinois are planning to mobilize to persuade state legislators and Gov. J.B. Pritzker that the state should not cut the tax credits included in the plan, which has allowed more than 20,000 Illinois elementary and high school students to attend private schools since 2018, the year the scholarships were first awarded.

“The net perception is that the program is not valued,” said Robert Gilligan, executive director of the Catholic Conference of Illinois. “That tax credit has allowed a significant number of kids to attend a non-public school, and this year they’ve been in school, learning, whereas their public school counterparts are at home.”

Under the program, people who pay Illinois income taxes can donate to an approved non-profit scholarship-granting organization, and receive a credit of 75 percent of their donation on their state taxes. The scholarship-granting organizations then use that money to award partial or full scholarships to students who want to use them to attend private kindergarten through 12th grade schools. While families with income up to three times the poverty rate are eligible, priority is given to lower-income families.

That means an individual or business could donate $1,000 and get $750 off their state income taxes. The program is capped at $100 million in donations or $75 million in tax credits, although it has never reached those limits, and the original program is set to end after the 2023-2024 school year.

In his budget address on Feb. 17, Pritzker proposed slashing the tax credit to 40 percent of donations, making the program less attractive to donors. It was included in a list of “corporate loopholes” the governor wants to close to help balance the state budget.

But the majority of donors to Empower Illinois are not corporations, said Anthony Holter, president of the scholarship-granting organization. Empower Illinois serves all areas of the state and has provided scholarships for students attending Catholic schools in the Archdiocese of Chicago.

“The lion’s share of our donors are individuals, hardworking, taxpaying individuals throughout the state of Illinois,” Holter said.

The most frequent donation to Empower Illinois is $1,000, but individual donations range from just a few dollars up to the limit of $1.3 million, Holter said.

Trying to cut the program now is bad for kids, Holter argued.

“It creates uncertainty and instability for families at a time when we need to do everything we possibly can to preserve stability, certainty and clarity for kids,” Holter said. “The proposal to cut the tax credit from 75 to 40 percent communicates an uncertainty for donors and for schools and families.”

For the current school year, Empower provided scholarships to 5,500 students in Illinois, 2,900 of them in Cook County, but it has more than 24,000 students on a waiting list, he said.

According the archdiocese’s Office for Catholic Schools website, more than 2,000 students in archdiocesan schools received tax-credit scholarships, but more than 9,000 are on a waiting list.

Holter and Gilligan said that instead of looking to cut tax-credit scholarships, the state should be extending the law past 2024 and perhaps even increasing the percentage of the tax credit.

That would be music to the ears of parents like Olga Del Valle, who has two children at St. Agnes of Bohemia School who are on a waitlist for scholarships from Empower Illinois.

If the scholarships don’t come through, Del Valle said, she would try to scrape together the money to keep her older child, a son now in seventh grade, at St. Agnes next year. The younger child would likely have to go to public school.

But she would prefer both students stay at St. Agnes, where the academics are strong and the principal fosters good communication with parents and families.

Natasha McClendon said she also doesn’t know how she could keep her children at St. Sabina Academy without the help of the tax-credit scholarship program. Two of her five children are receiving scholarships from Empower Illinois this year. The oldest two are out of high school, one working and living on his own and the other about to graduate from college. The youngest is in preschool and doesn’t qualify for a tax-credit scholarship.

McClendon said her father used to help with tuition, after pulling her and her brother out of St. Sabina when they were children because he couldn’t afford the tuition.

“He said it was the worst decision he ever made,” McClendon said.

He father died June 28, 2020, from a COVID-related illness, and McClendon lost her job during the pandemic and hasn’t been able to find another one. Her husband is permanently disabled, and his income doesn’t cover any more than rent and food.

Asked if she would keep her children at St. Sabina without the scholarships, she said, “At the moment, I can’t.”

But she doesn’t want to leave the school, either.

“I am a dedicated school parent,” McClendon said. “I’m on the parent association board. I help out in the school. The teachers know me very well, and the kids know me very well.”

Holter and Gilligan said both their organizations plan to mobilize parents like Del Valle and McClendon to share their stories.

McClendon said she would welcome the chance to share her story with elected officials.

“I would tell the governor to reexamine that issue,” she said. “You have parents who want to get a good education for their children and they really can’t afford to send them. Especially with the pandemic going on, a lot of people have lost their jobs.”


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