The rollback of the state's temporary income tax hike could mean deep cuts to an Illinois college scholarship program for low-income students, a recent report shows.
Over 45,000 eligible Illinois students could be shut out of the state's Monetary Award Program (MAP) if cuts are made to offset the revenue losses associated with the phaseout of the higher income tax rates that began on January 1, according to the analysis by the Fiscal Policy Center at Voices for Illinois Children and Women Employed.
At the start of this month, the state income tax dropped from 5 percent to 3.75 percent for individuals and from 7 percent to 5.25 percent for corporations.
The rollback of the state's 2011 temporary income tax increase means a more than $2 billion revenue decline in the current fiscal year, according to Voices for Illinois Children's Fiscal Policy Center. In the next fiscal year, state revenue could fall by about $5.4 billion if the tax hike is not renewed, according to the group.
To make up for the revenue loss, legislators might be forced to cut MAP funding and other non-mandated programs by an average of at least 25 percent in order to balance the budget for fiscal year 2016, which begins in July, the center's analysis shows. A 25 percent cut to MAP translates into 45,000 fewer program recipients, roughly a third of students who currently receive the college assistance, explained Sarah Labadie, senior policy associate with Women Employed.
"There are no positive effects to fewer students getting MAP," Labadie stressed. "And there are no positive effects to the state either for fewer students going to college and getting these jobs. By 2020, 67 percent of jobs in Illinois are going to require a two-year degree or some college, and 43 percent of Illinoisans have that. And so we're not helping make up that difference" if MAP funding is slashed.
The more than 45,000 students who could lose access to MAP funding would come on top of the nearly 170,000 eligible applicants who did not receive assistance in the 2012-2013 school year due to increased program demand and lack of funds, the groups found. Between the 2008-2009 and 2012-2013 academic years, for example, the college affordability program saw eligible applicants tick up 45 percent, or by 120,000 students, while MAP funding declined 3 percent over the same time frame, according to the report.
The MAP program helps low-income Illinois students pay for tuition at more than 130 colleges and universities in the state.
"MAP strengthens Illinois' future by bringing college educations within reach for more low-income students," Emily Miller, Voices for Illinois Children's policy and advocacy director. "Most recipients are the first generation in their families to attend college. As a result, they greatly improve their chances for economic success, which can break the generational cycle of poverty."
Springfield lawmakers, Labadie said, should opt against making cuts to MAP and other supportive programs and instead find new revenue to address the state's budgetary issues.
"Whether it's a blend of different revenue-generating things, whether it's something like a fair tax, there are revenue solutions to help the state stabilize its budget [that] we would be in favor of," she said.
State Sen. Daniel Biss (D-Evanston) is at least one Springfield lawmaker also speaking out about potential MAP cuts.
"Investing in MAP means investing in our future," Biss said in a statement. "As we grapple with our state's very real budget challenges, our handling of MAP will indicate whether we believe in ourselves or whether we're willing to turn our back on the next generation."