Removing these tax credits would hurt the education of kids who benefit from these scholarships and their families—mostly low-income Illinoisans—thus contributing to a more unequal Illinois economy. When many Illinois public schools did not offer in-person learning, these scholarships likely curbed the large decline in labor force participation of women—especially Black and Hispanic mothers—caused by COVID-19.
The Invest in Kids Scholarship Tax Credit program was enacted in 2017 to help improve access to better education opportunities for children from low-income and working-class families. Empower Illinois reported the average annual household income of participants is $38,000. The vast majority of the donations to the program come from individuals.
Pritzker, who is a vocal advocate of reducing income inequality, has every reason to be a proponent of the Invest in Kids program. In other states with scholarship tax credits, these programs have been found to improve student outcomes. They could help to mitigate the increase in inequality exacerbated by COVID-19.
Research by the Urban Institute shows tax credit scholarships raise high school graduation rates, college enrollment and college attainment of recipients—mostly children from low-income households. In Florida, for example, scholarship recipients were 12 percent more likely to go to college. Those who had received a scholarship from grade 8 to 10 were 2 percentage points more likely to graduate college.
The program helps moms, too. In 2020, when many women with children lost their jobs and some women were forced out of the workforce because their kids were not in classrooms, scholarship recipients got a lifeline: the ability to send their kids to school.
A survey conducted in November and December 2020 found that while 60 percent of private-school students were receiving full in-person instruction, only 24 percent of traditional public-school students were. Research found that public school closures were unwarranted because K-12 in-person learning had no effect on the spread of COVID-19.
Research shows students in grades 1-12 affected by the closures can expect a 3 percent decrease in income during their lifetimes. While the Chicago Teachers Union kept Chicago Public Schools—where the bulk of students are non-white and 76 percent of them are economically disadvantaged—from reopening, tax credit scholarship recipients were likely more able to reap the benefits of in-person instruction and to avoid falling further behind when compared to more affluent families.
Lastly, reducing enrollment at public schools doesn’t mean decreased funding for public schools. Since 2018, when the program launched, state education spending grew more each year than in the past. Additionally, the state’s education-funding formula has a hold harmless provision, so even if a student leaves public school via the scholarship program, school districts’ revenue can never fall below where it was when the scholarship program began.
Since first announcing his run for governor, Pritzker claimed he wanted to reduce inequality and make the Illinois economy more inclusive. However, his policy decisions are at odds with his rhetoric. The push to reduce and ultimately end Illinois’ scholarship tax credits hurts the people he says he wants to help.
Crain’s contributor Orphe Divounguy is chief economist at the Illinois Policy Institute.