Tuition Tax Credit Vouchers Added by Rauner as Bargaining Chip in Illinois School Funding Debate

It shouldn’t be particularly surprising that a proposal to add tuition tax credit school vouchers for children living in families with annual income up to $113,775 has been thrown as a bargaining chip into the Illinois school funding impasse being negotiated in a special session in Springfield. After all, Governor Bruce Rauner has hired a staff of advisors right out of the Illinois Policy Center that pushes such bills, Cardinal Blase Cupich, head of Chicago’s Catholic Archdiocese has met with Rauner to push hard for the program, and the American Legislative Exchange Council (ALEC) has a ready-made model bill that can be pulled right off the shelf.

Here is how things stand in Illinois (covered in more detail in this blog last week).  Illinois is a divided state whose legislature remains dominated by Democrats but whose current Republican governor, Bruce Rauner adheres to far-right ideology including austerity budgeting (and now, clearly, a belief in school privatization via vouchers).  Until the first week of July, due to an ideological impasse, the state had lacked a budget since Rauner’s election two and a half years ago, and the funding crisis had undermined universities, health care, and social services along with public education.  In early July, after Rauner vetoed the state budget passed by both houses of the General Assembly, lawmakers finally came together to override his veto. But the budget stipulated that school districts would not be able to access their state funds until the Governor approved an “evidence-based” school funding formula, passed by both houses of the legislature, but not yet sent to Rauner for his signature. Last week, Rauner vetoed that school funding formula. Rauner can use what the state of Illinois calls an “amendatory veto”—the right to veto part of a bill—in this case the part of the school funding plan that Governor Rauner called “a bailout” for the Chicago Public Schools.

A special legislative session has ensued.  The Senate gets 15 days to consider the veto and the House another 15 days.The General Assembly of Illinois can kill the entire school funding formula or perhaps reach a compromise.  And into these intense negotiations the subject of tuition tax credit school vouchers has been introduced.

Here is the Chicago Sun-Times: “Another powerful player has quietly joined the tangled web of talks about allocating public education money to schools before the fast-approaching first day of class: Cardinal Blase Cupich. The influential head of Chicago’s Catholic Archdiocese met with Gov. Bruce Rauner about trying to get a tax benefit for those who contribute to scholarships for parochial and private schools. The cardinal’s overture drew strong support from the Republican governor, cautious looks from Democratic leaders… As Democrats continue to push for an override of Rauner’s school funding veto, state Sen. Andy Manar, D-Bunker Hill, on Thursday characterized the archdiocesan scholarship program as as something the governor is asking of Democrats.”

Here is Chicago’s WBEZ explaining the details of the tuition tax credit voucher program: “Under the draft proposal reviewed by WBEZ, individual taxpayers could choose to send up to $1 million annually to scholarship organizations rather than to the state Department of Revenue. Those diverted taxpayer dollars would fund scholarships to pay tuition cost at private or parochial schools, or to pay the cost of a public school education in a district outside a child’s community. All told, the state could dole out $100 million annually in tax credits to finance this scholarship program. If the scholarship fund attracts at least $90 million in donations in any year, it would grow to $125 million. It could continue to grow by 25 percent annually, with no cap, as long as taxpayers send at least 90 percent of the maximum allowed to the fund. Donors could direct their money to a specific school, rather than a specific student, and some eligible students could be turned away. The proposal is striking in its reach. Any family of four earning up to $113,775 annually would be eligible for a scholarship. In Illinois, 67 percent of families of two or more people earn up to $100,000 a year, according to U.S. Census Data.”

As in other states like Indiana, the program would begin small but have the potential to grow rapidly once passed.

The voucher proposal may actually work as a bargaining chip. The Sun-Times reports that the idea has some appeal for the powerful Illinois House Speaker Mike Madigan: “‘Democratic negotiators are not warm to giving the Cardinal the scholarship program to the level’ he’s pushing a source said. Illinois House Speaker Michael Madigan supports the idea that the program could fund scholarships, but not as initially proposed, said his spokesman….”

In his new book on the corporate policy agenda to slash taxes, undermine public sector unions, and privatze public services, Gordon Lafer introduces his chapter on “The Destruction of Public Schooling” with a quote from Joseph Bast, (past) president of the Heartland Institute… (another Illinois) ALEC affiliate: “Elementary and secondary schooling in the U.S. is the country’s last remaining socialist enterprise…. The way to privatize schooling is to give parents… vouchers, with which to pay tuition at the K-12 schools of their choice…. Pilot voucher programs for the urban poor will lead the way to statewide universal voucher plans. Soon, most government schools will be converted into private schools or simply close their doors. Eventually middle-and upper-income families will no longer expect or need tax-financed assistance to pay for the education of their children, leading to further steps toward complete privatization…. This is a battle we should win….” (The One Percent Solution, p. 127)

Begin modestly with a bargaining chip in a debate that is holding up basic school funding just as local school districts need their August 10th state funding check to begin the school year. Start by awarding $100 million annually in tuition tax credit vouchers, but build in plenty of room for rapid growth. Neglect to remind the public that tuition tax credits are not a mere tax deduction; with tax credits, 100 percent of one’s contribution to the scholarship-granting organization is removed from the taxes that once fed the state’s general fund. And suddenly—and with less money in the general fund—-Illinois will be supporting two separate systems—a private voucher system and a public education system.

Basic arithmetic demonstrates how public school children will inevitably lose school counselors and nurses and find their class size increased.