SPRINGFIELD | Although most colleges and the state legislature are on summer vacation, Republicans in the Illinois House this week proposed two tax incentives to help middle-class Illinois families afford higher education.
One proposal would create a state income tax credit of up to $1,000 a year for taxpayers who are the principal provider of financial aid to a student enrolled in an accredited Illinois higher education institution.
“Our ongoing state financial crisis has stretched both family and university budgets to the breaking point. Without help, many of our best and brightest students may be 'priced out' of a college education here in Illinois. We cannot allow that to happen,” said state Rep. Dan Brady, a Bloomington Republican who is co-sponsoring the package.
The credit would cover 25 percent of the educational expenses of a student, up to $1,000 per tax year. Families earning more than $150,000 would not be eligible.
Indiana and one other state already offer such a credit.
Another proposal, filed by state Rep. Adam Brown, R-Champaign, would create a deduction, up to $10,000 per tax year, equal to the contribution the taxpayer made to a qualified tuition investment program, such as a 529 plan.
Current law permits such a deduction only to contributions made to certain in-state 529 plans.
Brown said about 30 other states offer a similar deduction for these self-directed college investment plans.
Republican sponsors Thursday said the proposals would help middle-class Illinoisans send their children to college in-state.
Brown said affordability of higher education is an important issue for parents, "especially for middle-class families. Struggling to pay for college is an issue that we all face, and we all fear, many years down the road."
Another goal of the proposals is to keep Illinois students in Illinois for college, Brown said.
"It's cheaper to go out of state than to stay here and use one of our wonderful state facilities," said co-sponsor state Rep. Bill Mitchell, R-Forsyth, citing recent statistics that 31 percent of Iowa's freshmen and 21 percent of Missouri's freshmen are from Illinois.
"For a strong and vibrant middle class, you need a good education, K through 12 and higher education," Mitchell said. "We have excellent facilities in Illinois, but we defeat ourselves when we send our kids to our neighboring states. It's a shame, and we should correct that."
Brown said he hoped the Illinois House would address these proposals in the fall veto session or next spring.