Scholarships awarded by Pennsylvania's tax credit programs plummeted by 8,404 in 2016, compared to the previous year. To put that number in context: 8,400 students would comprise the 27th largest school district in the state.
So, what caused such a steep drop in scholarships?
Recall that in 2015, Gov. Tom Wolf withheld funding for the Educational Improvement Tax Credit (EITC) and Opportunity Scholarship Tax Credit (OSTC) for six months. Wolf justified imperiling tens of thousands of scholarships by claiming his hands were tied by the ongoing budget impasse.
This seemed a strange explanation given that the EITC and OSTC were not yearly appropriations. These programs were part of Pennsylvania’s tax code, which remained in effect despite the budget impasse Wolf caused by vetoing multiple responsible spending plans.
A more likely explanation? It seemed that Wolf—frustrated by his inability to secure a $4.6 billion tax hike to further boost public school spending—was spreading the pain to Pennsylvania’s private schools, as well.
After pressure mounted from private schools and bipartisan lawmakers, Wolf eventually relented, and the tax credits were released in late December of 2015. At the time, however, many worried the delay in processing the tax credits would hurt families who rely on the EITC or OSTC.
Indeed, it seems those fears were justified, as scholarships declined by more than 8,000.
Per the Department of Community and Economic Development, which oversees the programs, some scholarship organizations chose to encumber their funds to future years. And who could blame them? The uncertainty and delay caused by the Wolf administration left many business contributors in limbo.
Of course, children and families who rely on these scholarships are the ones who suffered most. Perhaps we can expect an uptick in scholarships awarded in future years, but that will be of little solace to parents who had the rug pulled out from under them.
As lawmakers work to finalize the 2017-18 state budget, the House is preparing a school code bill that would boost the EITC by $20 million. Increasing the EITC by any amount is welcome news, but given what transpired in 2015, a larger expansion is necessary. Lawmakers should recommit themselves to the tax credit programs to make sure all children in Pennsylvania can find a school best suited to their needs.