Illinois Comptroller Susana Mendoza said on Feb. 26 that the state should opt in to the federal tax credit scholarship program so resources generated by Illinois taxpayers can benefit Illinois students.
The issue is significant because Illinois currently sends more in federal taxes than it receives back in spending, according to a Rockefeller Institute of Government analysis. This donor-state status means residents contribute more to federal coffers than the state receives back. Opting into the federal tax credit scholarship program would allow Illinois to recapture some of those dollars for education support within the state, as reported by Axios.
“Opting into this program would rightly help bring some of that money back home… If 100,000 Illinoisans participate with the max donation of $1,700, the program would generate $170 million for education resources for Illinois students every single year… Participation in the program does not change Illinois public school funding formula in any way… Illinois should opt in and ensure that when our taxpayers generate federal credits, Illinois students receive the benefit,” Mendoza said, according to her statement published in the Chicago Tribune.
Mendoza addressed the issue in the Chicago Tribune, reporting that Illinois must affirmatively opt into the Federal Tax Credit Scholarship program. Without opting in, Illinois taxpayers who claim the credit could see their dollars support students in other states rather than local families. The program provides a dollar-for-dollar federal income tax credit of up to $1,700 for donations to qualified scholarship-granting organizations, which cover expenses such as tutoring, tuition, transportation, and services for students with special needs.
Education Week reported that 27 states have moved to participate in the federal tax credit scholarship program. The initiative provides scholarships for K-12 students attending public, private, or religious schools and covers qualified expense,s including tutoring and services for students with disabilities. Taxpayers receive a direct dollar-for-dollar credit against their federal tax liability up to $1,700 per donation.
According to EdChoice.org, these voluntary private donations do not reduce state appropriations or alter public school funding formulas in participating states. Families can use funds from this program for targeted supports such as algebra tutoring or therapy for children with unique learning needs.
