New Case Study of Illinois School Districts Shows Public Schools Stand to Lose Funds Under Federal Voucher Program: Report Recommends Illinois Opt Out
A new study by Institute for the Public Good and Illinois Families for Public Schools examines what is likely to happen in Illinois if the new federal voucher program were to be implemented here. The study shows that public schools are more likely to be losers than winners financially and that, when funding does flow to public schools students, it is likely to go to schools with higher-income families, increasing already existing inequities across school districts.
The voucher program is set up as a tax credit scholarship program. Taxpayers receive 100% credits for contributions to Scholarship Granting Organizations (SGOs) of up to $3,400. SGOs then redirect those dollars to pay for vouchers covering educational expenses for private or public school students.
Most households with income below $75,000 per year (or $100,000 for joint filers) won’t have federal tax liability that allows them to benefit from a credit for a contribution to an SGO. About one in two public school students in Illinois come from low-income families, so SGOs that support public school students will have a harder time soliciting funds. Contributors wealthy enough to make use of a tax credit will likely contribute to the schools their own children attend or ones located in their own community, i.e. private schools or public schools in high-income school districts.
Key findings include:
In the most likely scenario, New Trier is estimated to see a net gain of $1M to the district, while Springfield is estimated to see a net loss of $1.7 million to the district and Beardstown a loss of $168,000.
Even in the very best case scenario for public schools where dollars flow in proportion to the number of public school vs private school students in these communities, New Trier would see a $1,242 increase per student while Springfield would see a $404 dollar increase per student and Beardstown would see a $240 increase per student. This would greatly increase inequity as New Trier is already at 75% more funding per pupil than Springfield and nearly 300% more per student than Beardstown.
Because some students will use vouchers to leave public school and enroll in private school, public schools will lose revenue, while being left with fixed costs that cannot be rapidly reduced, resulting in budget shortfalls. With an enrollment decline of 2%, the three districts stand to lose a combined $11 million dollars or 93 teachers.
While proponents of opting in have sold the idea that public school students will benefit, the analysis shows that this is unlikely to happen given the makeup of likely donors, the complexity of creating programs that benefit public school students and the limitation on the use of funds for public education. The report recommends Illinois opt out and focus on efforts to get more state and federal funding directly to public schools.
Read the full report here.