Despite months of organizing and a concerted last-ditch effort by Democratic Senators to stop it, a federal voucher program ended up in the final version of the reconciliation bill that narrowly passed both chambers earlier this month.

Congress approves billions of public dollars for private schools

Some of the worst provisions were modified as a result of the Senate parliamentarian, but the final version will still harm public schools. A big change from earlier versions is that states will be able to opt out of participating in the program.

The legislation is not super detailed, and the specifics that may be needed to advocate against vouchers coming to Illinois won’t be settled until the federal regulations implementing the law are drafted by the US Treasury Department. Here’s some of the concerning pieces we know so far though:

• The program will be in the form of a tax-credit scholarship, like Illinois’ defunct, debacle of a voucher program. That means contributors will write checks to voucher middlemen, aka scholarship granting organizations (SGOs). Then SGOs distribute vouchers to families to use for private school tuition and other educational expenses. Contributions can begin in 2027. There is no end date for the program.

• Contributors to SGOs will receive a one-to-one tax credit off their federal income tax bill. Only contributions up to $1,700/year will be credited. This is significantly smaller than the original legislation, which would have allowed credits up to 10% of a taxpayer’s income. But there is no limit on how many taxpayers can claim a credit. If every taxpayer who could contribute did, this could mean $100 billion in federal tax revenue to distribute as vouchers. It’s unlikely that every taxpayer who could make such a contribution will, but a national program of $8 billion to $25 billion annually is certainly possible.

• States have the option of participating in the program. Previously, SGOs could hand out vouchers for use anywhere in the country—regardless of a state’s policies or laws on vouchers. Details are scanty on how states will determine whether they will participate.

• SGOs must be 501c3 non-profits, and they will be approved on a state-by-state basis to fund vouchers in a particular state. However, it’s not clear how much discretion a state will have in the SGO approval process once a state has opted into participation in the voucher program.

• The income limits on receiving a voucher are set very high---300% of the area median income, (e.g. just under $360K for a family of four in the Chicago metro area), and there is no requirement that students ever previously attended public schools in order to receive a voucher. The program will likely cover a lot of higher-income families who were already sending their kids to private school.

• The legislation is silent on whether and how states that opt in can regulate their private schools that take vouchers. So, we don’t know whether states will be able to set standards for private schools on things like making their contracts and spending public, requiring certified teachers and high-quality curriculum or prohibiting discrimination against students, staff and families in protected classes.

• Expenses incurred by public school families could be covered by vouchers as well. Lots of public school parents in Illinois write out checks to cover school fees, supplies, and activities every year. An SGO could issue vouchers to cover those costs because they are “eligible educational expenses” as defined in statute.

• SGOs only need to spend 90% of contributions on vouchers. That leaves 10% that can be spent on their operating expenses—including lobbying to make this program grow. (Under Illinois’ voucher program, SGOs could only use 5% of their takings, and that bankrolled extensive PR and lobbying.)

Could a state that doesn’t want vouchers choose to approve SGOs that only fund public-school expenses? We don’t know. As such, if Illinois doesn’t opt into the program, the state could be forgoing hundreds of millions or even billions in federal revenue that will instead go to private schools in voucher-loving states. Illinois is already a slight net loser in terms of what we pay into the federal government vs what we receive as a state. Not participating in the voucher program could exacerbate that.

Then again, taking those voucher dollars is not without cost. As students leave public school, public schools will lose federal funding, and because their fixed costs can’t change as quickly as their variable costs, there is an additional loss to public school budgets above and beyond that as well (a “fiscal externality”). That extra loss to our public schools in Illinois, if even just 5% of current students left and started using a voucher to attend private school, could be $1 billion or more, according to the Economic Policy Institute.

One thing we know for certain at this point: Illinois has already experimented with vouchers, and that experiment was a failure. The more than $315 million tax dollars dumped into the program funded discrimination, were spent with scant oversight and hurt education equity, rather than helped it. IL-FPS documented these issues extensively; you can find that information and more here.

Meanwhile public dollars for public schools are on the chopping block…

On Friday, the Trump administration announced it would start releasing billions in K-12 education funding that it was illegally holding onto since July 1st. Most of these funds (Title I-C, II-A, III-A, IV-A, IV-B) are for things like teacher training, after school programs and educating the children of migrant farmworkers who must change schools frequently. The total being withheld from Illinois was more than $240M.

Pressure from Republican Senators in particular got some of the funds released earlier in the month, those for after school programs. The willingness of Republicans to publicly confront Trump on this issue and him caving on it shows how important public school funding is across the political spectrum and how unpopular cutting public school dollars is!

Unfortunately, all these federal Title funds are still at risk for FY 2026 because the administration’s budget proposal would eliminate them entirely. Longer term, the majority of Title I funds, i.e. not just Title I-C, are also at risk—Project 2025, the policy blueprint for Trump's second term proposes to phase them out. The largest portion of Title I dollars ("Title I-A") fund schools that enroll significant numbers of students from low-income households; for Illinois, that’s about $800 million a year.

In FY 2023, about 12% of Illinois’ K-12 school funding came from the feds. Any cuts to that funding harm an already underfunded system. As reported by the Center for Tax and Budget Accountability (CTBA), the gap between what Illinois’ public schools need to educate their students and what they have was $2.7 billion in FY 2025. That will grow for FY 2026, the result of “the lowest year-to-year increase in EBF funding since FY 2021” combined with “fluctuating local revenue.”

It is important to note that the state’s assumption about adequate funding has always rested on the fact that the federal funding will make up about 10% of what schools need, but now as CTBA further points out, “[t]his assumption may have to be revisited based on the current Trump Administration's attack on federal spending generally, and the federal Department of Education specifically.“

Regrettably, our Democratic state leaders haven't been truly meeting the moment, laying the blame for our fiscal issues solely at the feet of the Trump administration or recycling the worst rhetoric of the other side of the aisle. In fact, here in Illinois, long before Trump assumed power, we've chosen not to take on a structural deficit caused by our regressive tax policies. We don’t sufficiently fund what Illinoisans need to thrive. While we've slowly been increasing K-12 funding since 2017, overall we are now spending less than we did a quarter century ago on the full set of functions and services a healthy state needs to provide. And the wealthiest people in our state who are most able to contribute aren’t paying what they should.

As the effects of the disastrous handout to the super rich from the massive, malevolent Trump reconciliation bill kick in on the national level, Illinois needs to reckon with its own unjust inadequacies of who we fund and how. Not only will the voucher program have an impact on our state’s education system, the drastic cuts to Medicaid and SNAP will too.

We need a progressive income tax (and the constitutional amendment to make that possible), and we need a sales tax on services so that everyone is paying their fair share. We need leaders who are fighting for an Illinois that works for everyone in every community, which includes strong public schools that can welcome, nurture and educate every child who comes in the door.

What’s next and what can you do?

✶ As we wait to see what Illinois’ options are under the new federal voucher program’s regulations, it’s important to make sure our friends, neighbors and elected officials are aware of the issues with vouchers generally and their recent history here in our state. We hope to have updated materials for you to share in the coming weeks and months about the national voucher program, how it might play out in states without vouchers and how other state and federal policies are impacting the public schools in your community. For now, you can share the link to this email.

✶ The upcoming March 2026 primary is another opportunity for advocates to highlight what strong public schools need. With US Senator Durbin retiring, there are many competitive races all the way down the ballot. Voters should push all candidates for both state and national-level offices to commit to only using public dollars for public schools. The end of this post describes a great example of what that looks and sounds like from the Kentucky governor’s race in 2023 where Andy Beshear was a vocal champion for public schools over vouchers.

✶ Media coverage of late has mostly focused on CPS’ dramatic shortfall for the coming school year, with cuts already being announced, but, as discussed above, lack of funding is not a Chicago-only problem. The vast majority of IL school districts are not at 100% adequate funding (look yours up here!), and that’s before any anti-education Trump policies really start to play out.

The IL House Executive Committee is holding a hearing this Thursday, July 31st at 10am in Chicago on CPS’s finances. We encourage everyone to tune in if you can, not just Chicagoans. (Video and audio will stream from here on Thurs a.m.) We are one state, and CPS is not the only district in financial straits in these difficult times.  Whether you can watch the hearing or not, reach out to your state rep about school funding this week. Find their district and Springfield numbers here. The discussions in the General Assembly about education funding should be broader and deeper ASAP! Here’s a suggested script: