Challenge to Illinois Tax Credit Dismissed

Challenge to Illinois Tax Credit Dismissed
June 1, 2000

George A. Clowes

George Clowes is a Heartland senior fellow addressing education policy. He served as founding... (read full bio)



On April 21, Judge Thomas Appleton of the Sangamon County Circuit Court dismissed a lawsuit filed by the Illinois Education Association and various other organizations that claimed a 1999 tax credit law violated four provisions of the Illinois Constitution, including two that deal with the establishment of religion.

The law in question provides a state income tax credit of up to $500 for 25 percent of tuition, book fees, or lab fees in excess of $250 that are incurred by K-12 students at public or private schools.

The lawsuit was the second attacking the constitutionality of the tax credit. Last December, Judge Loren P. Lewis of the Franklin County Circuit Court dismissed a similar suit filed by the Illinois Federation of Teachers, holding that the law meets constitutional muster. In finding the plaintiff's lawsuit "substantially insufficient in law," Lewis pointed out that Minnesota had "adopted a statute similar in all material particulars to the Illinois statute" and that the U.S. Supreme Court had ruled the Minnesota law constitutional in Mueller v. Allen (1983).

"This is a great day for the parents and children of Illinois," said Matthew Berry, staff attorney at the Institute for Justice, which represented 12 Illinois families in defending the constitutionality of the tax credit. "The teachers' unions and other opponents of meaningful education reform have taken two shots at school choice in Illinois and are now 0 for 2."

In his order dismissing the lawsuit, Appleton pointed out that the tax credit allows Illinois parents to keep more of their own money to spend on the education of their children as they see fit and does not involve the expenditure of government money.

Plaintiffs had contended that a tax deduction or a tax credit is "public money." The judge rejected that argument, noting that just because the state allows a taxpayer to keep more of his own money does not mean the money belongs to the state. He also pointed out that, carried to its logical conclusion, the plaintiffs’ argument would mean there could be no tax exemptions, deductions, or credits where a religious entity was involved.

"If Plaintiffs’ argument were taken to its logical conclusion, the total income of every taxpayer is public money," noted the judge. But unpaid taxes are not public money. Therefore, there is no public support of religion involved when some of those unpaid taxes are used to pay for a child's parochial education, he ruled. Any money that is spent is spent by parents, not the state.

Appleton also dismissed as "absurd" the plaintiffs’ argument that only the rich can benefit from the law--that it unreasonably excludes parents of public school children and low-income parents from exercising the credit. Just because a tax credit has a threshold expense and isn't used by everyone doesn't make it unreasonable, he ruled.

"While this decision will no doubt be appealed, we are confident that it will be upheld," commented Berry. "The tax credit is equally available for expenses incurred at public, private, and religious schools. The law creates no incentive for parents to choose religious schools over nonreligious schools; rather it simply provides greater opportunity for parents to send their children to schools of their choice."


George A. Clowes is managing editor of School Reform News.

George A. Clowes

George Clowes is a Heartland senior fellow addressing education policy. He served as founding... (read full bio)