PEORIA — Jan. 1 may be the start of the new year, but Jan. 2 marks the start of a controversial new program that adds up to millions in tax breaks for Illinois residents and millions more in scholarships for private-school students.
If Illinois follows the history of other states, taxpayers will be up and online early Tuesday, snapping up a maximum of $75 million in tax credits available for making donations to the Invest in Kids Scholarship Tax Credit Program.
The tax credits, administered by the Illinois Department of Revenue, translate to as much as $100 million in scholarship donations to parochial and private schools throughout the state.
Funding will be distributed based on geographic regions that line up with the state’s appellate court districts.
While private schools in Chicago and surrounding counties stand to get slightly more than half of the tax credits, taxpayers in the 21 counties that make up region 3, including Peoria and Tazewell, could reap about $7.5 million in tax credits, which means about $10 million in scholarships.
That could be as many as 15,000 scholarships statewide, including 3,000 to 4,000 in the Peoria area, estimated Myles Mendoza, executive director of Empower Illinois, one of five state-approved scholarship granting organizations, or SGOs, that will collection donations and distribute scholarships.
The next big day for the program is Jan. 24, when families can start applying for the scholarships. But how much scholarship money will be available is only a guess until the tax-credit program goes live at 8 a.m. Tuesday. Even after that, potential donors have 60 days to make the donation to an SGO.
“A scholarship program does no one any good if donations aren’t made,” said Susan Knapp, development director at Peoria Notre Dame High School, who has been gearing up the school’s donor base to start trying to reserve tax credits as soon as possible Tuesday morning.
“The big thing we’re trying to convey is tax credits are given on a first-come, first-serve basis,” Knapp said.
Taxpayers can get a credit of 75 cents for every $1 donated, up to a $1 million in tax credits. For example, a $10,000 donation entitles a taxpayer to claim a $7,500 credit on 2018 state income taxes. To apply for the tax credits on opening day, donors had to have already set up an account through the department of revenue’s website.
Notre Dame, like other schools, is targeting individual donors and alumni because they can choose which school or schools receive their donations. Corporate donors don’t have the same option.
Though Knapp said she’s heard “a lot of excitement” from potential donors, she’s also heard a lot of confusion and questions about how the program works.
“It’s been a huge challenge to educate everyone on the law itself,” she said. “It’s complicated and we’re still learning.”
Of the five scholarship granting organizations approved by the state so far, only Empower Illinois and the Association of Christian School’s International will operate statewide.
Empower Illinois’ network of private schools statewide include the 42 schools in the Catholic Diocese of Peoria, which make up the majority of private schools in the area. Thirteen of the 42 schools are in Peoria, Tazewell and Woodford Counties.
Mendoza of Empower Illinois expects tax credits to go “very fast” in the Chicago area, slower in central Illinois and slowest in the southern part of the state.
Mendoza has had to scramble to get Empower Illinois up and running. The organization partnered with Step Up For Students, which operates Florida’s 15-year-old tax-credit scholarship program, to provide logistical help such as a call center, tech support and fraud prevention.
Empower Illinois evolved out of One Chance Illinois, where Mendoza was also executive director. One Chance, an educational choice advocacy group, the Catholic Conference of Illinois and other groups had lobbied two years for a tax-credit scholarship program in Illinois. In a last-minute compromise in August, lawmakers attached the scholarship program for private schools to a major school funding reform package aimed at increasing state funding for the state’s neediest public school districts.
Some longtime supporters of school-funding reform, ranging from the Illinois Federation of Teachers to State Sen. Dave Koehler and State Rep. Jehan Gordon-Booth, both Peoria Democrats, dropped their support after lawmakers added the tax-credit scholarship program. Critics call the program a back-door voucher that will drain funding and students from public schools.
Mendoza and supporters of tax-credit scholarships maintain the program opens new educational options to families, particularly families who can’t afford private school tuitions.
Family income of eligible students cannot exceed 300 percent of federal poverty guidelines, or $73,800 for a family of four.
“That’s huge,” Knapp said. “Families with that kind of income typically aren’t even considered.”
Notre Dame, like parochial schools throughout the area, has already made plans to help families fill out scholarship applications.
Beginning Jan. 24, a bank of computers and other assistance, including bilingual translators, will be available at the high school to help families apply.
Pam Adams can be reached at 686-3245 or firstname.lastname@example.org. Follow her on Twitter @padamspam.