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State Republicans seek tax breaks for college students' families

Republicans seek tax breaks for students' families

DeKALB – Local Republican lawmakers want to expand tax deductions and introduce a new tax credit for middle-class families with students in Illinois schools.

Republican state Reps. Robert Pritchard of Hinckley, and Tom Demmer of Dixon, unveiled the plan Wednesday at Northern Illinois University with House Minority Leader Tom Cross of Oswego; Joe Sosnowski of Belvidere; Mike Fortner of West Chicago, and Kay Hatcher of Yorkville.

"The state has disinvested in higher education for more than a decade, to the point that public universities now receive less than a quarter of their operating funds from the state," Pritchard said. "Colleges and universities are forced to trim expenses and increase tuition. ... That's creating a lot of stress."

Republicans unveiled their plan at the Sky Room at NIU, where incoming undergraduate students from Illinois who take 15 credit hours will pay $302 a credit hour, or $9,071 annually after a 2 percent tuition increase that was approved June 20.

The Republicans are proposing to give in-state families earning less than $150,000 a year an income tax credit of up to $1,000 if they have a child attending an accredited Illinois school. The tax credit is not limited to undergraduates, either.

The credit would apply to students who are attending an Illinois university or college that is sanctioned by the Illinois Student Assistance Commission to receive the Monetary Award Program, which is used by students to pay for educational expenses. However, students who receive the MAP grant are not eligible for the tax credit.

The lawmakers also are hoping to extend availability of tax deductions for investing in 529 education-savings program. Currently, residents are able to deduct their taxes if they invest in a specific public 529 program. Pritchard and others are hoping to extend that deduction to all kinds of savings program, public or private.

"It allows people to plan for college as well as, when they're in college, have some kind of tax credit," Pritchard said.

Cross estimated the total cost of the proposals to the state would be $87 million – a drop in the bucket compared with how much the state is spending because of inaction on pension reform, he said.

He also suggested this could be paid out of the revenue that is expected to be generated by a proposal to expand gambling in Illinois.

Steve Brown, the spokesman for House Speaker Michael Madigan, said he found the timing of the bill's introduction to be confusing, and noted that there's no defined funding source for it.

"There is no gambling bill at the moment," Brown said. "Spending money from a program that doesn't exist yet would, at best, seems premature."

State support for universities like NIU has dwindled for years. If Gov. Pat Quinn signs this upcoming fiscal year's budget as is, NIU will receive $93 million from the state – 20 percent of the revenue university officials are expecting.

The tax-credit program has been introduced as House Bill 3640, while the increased tax deductions are listed under H.B. 3641. Both bills were introduced Wednesday in the House. Pritchard said he hopes they will pass this fall.

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