For Immediate Release
Scholarship Programs Already Saved School Districts Nearly a Billion Dollars
EITC and OSTC Save Money While Improving Education Outcomes
October 6, 2014, HARRISBURG, Pa.—Today, the state House will consider strengthening educational choice and opportunity for Pennsylvania students. Pending legislation would make it easier for businesses to contribute to two tax credit programs, making highly sought after scholarships more readily available for families across the state.
If approved, more students could excel while school districts would save millions of dollars.
“At a time when education funding is top-of-mind with the public, it’s heartening to see lawmakers building upon programs with proven track records offering students a quality education while saving taxpayers millions at the same time,” commented Nathan Benefield, vice president of policy analysis for the Commonwealth Foundation. “To put it in perspective, these scholarship programs serve more than twice the number of students in the Pittsburgh School District—and do it at just one-seventh of what the district spends.”
Thousands of students like Philadelphia’s Kaiden Myers—who used an Education Improvement Tax Credit (EITC) scholarship to escape from a chronically failing district school to attend a private school where he is excelling—are working towards a better future because of these money-saving scholarship programs.
In 2012-13, the EITC and the Opportunity Scholarship Tax Credit (OSTC) provided a combined 60,618 scholarships to K-12 students, which would make it the second largest school district in the state.
Legislation considered today is designed to make even more scholarships available by increasing the taxes business can receive a credit for and allowing credits to be moved between the EITC and the OSTC.
If we sent the more than 60,000 students receiving tax credit scholarships back to their home districts, Pennsylvania’s public schools would need an additional $892 million—nearly $1 billion—to educate them. Given that education spending is already at a record high, that’s a real savings to taxpayers.
- The 60,618 EITC and OSTC students account for less than half the School District of Philadelphia’s enrollment yet are educated at a cost to taxpayers of just 3.4 percent of the SDP’s annual budget.
- The average EITC scholarship is just $1,100. Public schools spend an average of $14,621 per pupil.
- The entire EITC program equals less than one-fifth of 1 percent of taxpayer spending on public schools.
- An additional $892 million would be needed by public schools if scholarship students were sent back to their district schools.
In 2001, Pennsylvania became the first state to enact an education tax credit aimed at corporations.
Since then, the EITC program has granted more than 430,000 scholarships from nearly $470 million in donated funds to students from low- and middle-income families across the state seeking the best school for their child.
In 2012, the OSTC program was added, which is targeted at giving students in low-achieving schools the ability to transfer to a high-achieving school.
Today, both programs experience far more demand from Pennsylvania students than there are scholarships available.
Over the past decade, the Children’s Scholarship Fund Philadelphia (a scholarship-granting organization made possible by the EITC) received 130,000 applications for just 14,500 available scholarships.
Demand for these scholarship programs has skyrocketed, especially in low-income and urban areas where a student’s ZIP code often assigns him or her to a chronically failing public school. Lawmakers stand ready to grant more such students the opportunity for a better education and should be applauded for doing so.
Nathan Benefield and other Commonwealth Foundation experts are available for comment. Please contact us at 717-671-1901 to schedule an interview.
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For more information, please contact our director of media relations for the Commonwealth Foundation at 717-671-1901 or email@example.com.
The Commonwealth Foundation, founded in 1988, crafts free-market policies, convinces Pennsylvanians of their benefits, and counters attacks on liberty