Pritzker Plans To Phase Out Private School Tax Credit

Feb 25, 2019

St.Ignatius College Prep is one of the private schools operated by the Roman Catholic Archdiocese of Chicago, which lobbied for the tax credit provision.
Credit https://www.flickr.com/photos/chicagoarchitecturetoday/7541118788

When Gov. J.B. Pritzker rolled out his budget proposal on Wednesday, he acknowledged that he needs more than $1 billion in new revenue to make it work. The question is: Where will he find all that dough?

A briefing document provided after the speech offered some answers. Pritzker envisions big sums rolling in from tinkering with the medicaid ($390 million); legalizing sports betting ($200 million) and recreational marijuana ($170 million); closing some corporate tax loopholes ($94 million); and taxing tobacco products ($65 million).

But at the smaller end, he even wants to reclaim $6 million by phasing out tax credits for private school donors.

Remember, if you can, the summer of 2017, when Illinois had gone two years without a budget. The legislature finally approved a plan, but it had a booby-trap: No money for schools until lawmakers approved a change to the funding formula.

Key to that compromise was the last-minute creation of a controversial but popular program giving private school donors a 75 percent tax credit. Now Pritzker wants to phase it out to get $6 million for his budget.

Private school patrons argue the credit is helping thousands of families without costing the state any money. State Representative Will Davis, a Democrat from Homewood, has a different view.

"Well, it's a tax credit,” he says. “And any tax credit is money that we don't receive into our state coffers that we can therein spend whatever's appropriate."

The law contains a five-year sunset provision, meaning the legislature would have to approve renewal. But Pritzker wants to cap contributions at $50 million in this calendar year.

Davis and State Sen. Andy Manar (D-Bunker Hill), who sponsored the legislation in their respective chambers, say Pritzker has indicated he wants to phase it out sooner, perhaps by limiting the program to families who are already enrolled.

Other legislative proposals suggest other ways to limit the program. State Sen. Jennifer Bertino-Tarrant (D-Shorewood), who chairs the Senate Education Committee, has re-filed the measure she proposed last year that would prohibit such tax credits in any year the legislature fails to appropriate at least $350 million for equity funding. Rookie state Rep. Ann Stava-Murray (D-Naperville) has filed a bill that would disqualify schools controlled by any church or sectarian organization from participating in the tax credit scholarship program.