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Students Win Big with Tax Credit Scholarship Boost

The recently enacted state budget includes a $25 million increase in the successful and popular Education Improvement Tax Credit (EITC) program. This increase is tremendous for families—given that tens of thousands of students seeking educational opportunities are turned away every year.

The $25 million increase, specifically for K-12 scholarships, will allow another 15,000 students to be served—based on the average scholarship amount of $1,658.

The EITC currently provides 34,000 K-12 students with scholarships; another 6,500 pre-K Students receive scholarships, and nearly 15,000 scholarships were awarded through the sister program, the Opportunity Scholarship Tax Credit (OSTC) program. 

The $25 million increase matches the second largest increase in the EITC program’s history.

In total the ETIC and OSTC programs now provide $210 million in tax credits:

  • OSTC – $50 million
  • EITC – $160 million, with the following for each category:
    • $110 million for K-12 Scholarship Organizations
    • $12.5 million for Pre-K Scholarship Organizations
    • $37.5 million for Educational Improvement Organizations

The EITC benefits students across the state. As the maps below show, scholarship organizations distribute scholarships in 65 of 67 Pennsylvania counties.*

Gov. Wolf signed off on this increase without hesitation, a striking contrast to his earlier position. In previous budget standoffs, Gov. Wolf withheld EITC letters, discouraging businesses from applying for credits and reducing the number of scholarships available. In addition to the increase, the legislation modifies timelines, and puts some teeth into the enforcement of state deadlines to prevent future delays.

This $25 million boost is tremendous for low- and moderate-income families seeking educational opportunity. Still, Pennsylvania’s tax credit programs lag behind national leaders like Florida. Lawmakers should look to legislation sponsored by Sen. Regan and Rep. Phillips-Hill to create an automatic escalator to ensure students don’t get left behind.

 

*Editor's note: An earlier version stated that 59 counties have scholarship organizations.