Reports from under the Capitol dome suggest an expansion of Pennsylvania’s successful Educational Improvement Tax Credit (EITC) will be part of the budget deal. According to the AP,
The Educational Improvement Tax Credit, which is popular with the school choice movement, will potentially double to $150 million from the $75 million set aside in this year’s budget. It would be one of the largest expansions of a discretionary program from the budget that’s in force now.
The EITC allows businesses to take a tax credit for voluntary contributions to provide scholarships to students. It seems there is some debate over how much to increase the program. But the reality is this: The more students receiving scholarships, the more taxpayers will save.
As we pointed out in a summary of this proposal to expand school choice, opportunity scholarships cost less than public school spending per student. In 2010-11, school districts spent nearly $15,000 per student. In contrast, the average EITC scholarship was less than $1,100.
|EITC Savings Per Student vs. School Districts|
|School District Spending Per Student||$14,865||$14,865||$14,865|
|Avg. Scholarship Amount based on:||Current Avg. EITC Scholarship||Avg. Catholic School Tuition||Max for Traditional Student under HB 2468|
|Avg. Scholarship Amount||$1,099||$5,000||$8,500|
|Cost Difference vs. School Districts||$13,766||$9,865||$6,365|
Even if we assume higher scholarship amounts under the new proposal—such as the average tuition of Catholic schools in Pennsylvania, or the maximum scholarship amount allowed under the new proposal—we would still be providing an education for thousands of dollars less per student.
Lawmakers should maximize the opportunities given to school children—and the savings to taxpayers—by significantly increasing the cap on educational tax credits, and building in future increases to allow the program to grow to meet demand.