Child Rescue Plan Underway, EITC is Lifeline

As we come down to the wire in the Pennsylvania legislature’s 2012 session, the Senate revealed the latest details (subscription required) of how an expanded opportunity scholarship program would work. Pennsylvania currently has an immensely popular, successful and decade-old old program called the Educational Improvement Tax Credit, or EITC.

The EITC program gives businesses tax credits for donating towards scholarships for students to attend a school of their choice, and currently 40,000 children use the scholarships. But the EITC is currently maxed out at its current cap of $75 million a year, and doesn’t keep pace with all the families who want to use the program.

Under the proposal to expand the existing “EITC 1.0” program:

• An additional $25 million would go to the program, increasing the cap to $100 million in 2012-13.
• The credit businesses may receive will increase from $300,000 to $400,000 in 2012-13, and $750,000 in subsequent years.
• After 2013, the maximum family income to participate will increase from the current level of $65,000 to $75,000, with the allowance for each dependent increasing from $12,000 to $15,000.

The new “EITC 2.0” component of the expansion will cater to students attending Pennsylvania’s lowest-achieving public schools, defined as the bottom 15 percent in combined math and reading scores. Under the program (with some details amended from the initial proposal):

• Businesses can donate to scholarship organizations that give scholarships to students within the bottom 15 percent attendance boundaries, so they can attend a public or private school of their choice.
• 2012-13 tax credit and family income levels would be the same as the existing EITC program: $300,000 for businesses, $60,000 in income + $12,000 for each dependent for families. After 2013, the limits would increase to the levels noted above.
• Maximum scholarship amounts (which cannot exceed tuition levels) is $8,500 for a regular student and $15,000 for a special education student.
• The total tax credit amount for EITC 2.0 is $50 million.
• The measure gives preference to applicants who received a scholarship the previous year; have household income within 185 percent of the federal poverty level, or below $42,643 for a family of four; and who come from school districts classified as first-class or subject to a declaration of “financial recovery status” (which are Harrisburg, York, Duquesne and Chester-Upland).

Rescuing students trapped in violent, failing schools is the right thing to do, and not only saves them, but saves taxpayer money. To see how EITC scholarships are saving kids in a distressed urban community, watch this video about how Logos Academy in York is transforming lives.