On July 4, 2025, the FY2025 Reconciliation Act was signed into federal law. Among its provisions, the law created a federally funded tax credit scholarship program for elementary and secondary education that will be effective beginning on January 1, 2027.
Under the program, taxpayers will be eligible to receive a tax credit of up to $1,700 for the value of cash contributions to certain scholarship granting organizations (SGOs), which in turn, will be required to use these contributions to grant scholarships to students at private and public elementary and secondary schools located within their states.
Eligibility for scholarships will be limited to students whose family income is below 300% of their area median income. Recipients may only use the funds for qualified expenses as defined in the Act and will constitute tax-free income for the recipients and their families.
States may choose whether to opt in and recognize eligible SGOs within their jurisdictions. So far, the governors of 27 states have either formally enrolled or said they plan to at some point. Four governors have said their states won’t participate. The remaining 19 governors and the mayor of the District of Columbia have yet to announce their intentions.
The four governors who have said they don’t plan to opt in – Hawaii, New Mexico, Oregon, and Wisconsin – are all Democrats. Of those states, only Wisconsin already has private school choice: four voucher programs that allow some students to enroll in private schools.
Choosing to duck a direct question yesterday when asked if Illinois would opt into the program, Governor (and presumptive Presidential candidate) J.B. Pritzker indicated that federal regulations from the U.S. Departments of Education and Treasury, which were expected by the end of 2025, have not yet been released. He stated, “As far as I understood, those rules were supposed to come out before the end of the year. They still aren’t out. So we’ll take a look at those and make a decision then.” There’s a profile in courage and leadership if I ever saw one.
This is coming from a guy whose own state agencies have turned slow-walking administrative rulemaking into an art form.
As a member of JCAR, I have a front row seat to watch agencies delay the issuance of rules to play games with the calendar requiring rules to be promulgated within one year of a statute’s passage. This is nothing more than an attempt to put JCAR on the hook to be the bad guy if rules aren’t timely issued. This also results in the issuance of “emergency” rules which do not allow for public comment and stakeholder engagement. Otherwise, the implementation of the underlying statute which calls for administrative rulemaking is delayed. In other words, it’s an emergency of their own making for the sole purpose of jamming up the process. The Governor has been a critic of JCAR, primarily because we’re an evenly split bipartisan committee which has periodically refused to rubber-stamp his pet rulemaking projects.
This new law requires governors to opt in to the program annually if they want their states to participate in this choice-expanding initiative. Governors who choose to opt in, not later than January 1 of each year, must submit to the U.S. Treasury Department a list of scholarship-granting organizations (SGOs) in the state that are qualified to participate. The governor’s role is a ministerial function, not an arbitrary or open-ended determination. The determination of whether an SGO qualifies is up to the Feds.
Since the Governor conveniently blew by this year’s deadline, he should signal his intentions to opt in for 2027, when the program officially begins. It would also give him a chance to submit the list of Illinois SGO’s for vetting once the administrative rules are issued. This is a program that won’t cost Illinois a dime, but given that he and his allies in the General Assembly caved to the public teachers’ union lobby and torpedoed the Invest in Kids Act in 2023, I’m not taking bets on what he’ll do this time.
The only thing that appears to be holding him up is the political calculus of how it will affect him in November. You may want to influence that calculus by letting your opinion be heard. Give him a call, I’m sure he’ll be happy to hear from you.