School Choice Momentum in Pennsylvania

The Educational Improvement Tax Credit (EITC) program established Pennsylvania as a school choice leader when it was introduced in 2001. The program helps thousands of students, but it hasn’t kept up with demand as arbitrary tax credit caps leave thousands of students waitlisted each year. Happily, the recently enacted 2018-19 budget includes a $25 million increase in available credits, which will help thousands of students access the school that fits them best.

The EITC program has benefits beyond the profound impact to scholarship recipients. For starters, numerous studies confirm that competition from school choice improves public schools. Furthermore, the EITC increase will save Pennsylvania taxpayers millions of dollars. Average per pupil funding in Pennsylvania was nearly $18,000 in 2016-17; the average EITC scholarship is less than $1,700. These savings were corroborated by an EdChoice audit that found the EITC program saved taxpayers more than $1 billion from 2002-2014.

Unfortunately, a cap increase isn’t enough to guarantee eligible children the scholarships they deserve. Despite clear program benefits, Governor Wolf has used the EITC as a political football during tense budget negotiations.

During the 2015-16 budget battles, Wolf withheld EITC funding for 6 months. Tax credit scholarships (EITC and OSTC) dropped by 8,400 that year, as schools and families dealt with uncertainty in the program. Undeterred, Wolf used a similar tactic last fall despite state law mandating approval letters be sent within 30 days. This repeated politicization of tax credit scholarships has resulted in some businesses withdrawing from the programs.

The 2018-19 budget agreement gives teeth to the requirement to release EITC approval notification on time by allowing businesses to sue if they don’t receive the notices within 10 days of the deadline. Rep. Kristin Phillips-Hill’s House Bill 2530 would further strengthen the provision by permitting any “person adversely affected” by the withholding of EITC approval letters—such as scholarship organizations, parents, and recipients—to file suit to compel the release of the letters. HB 2530 also includes an automatic escalator for EITC, which would increase the amount of available credits by 25 percent whenever 90 percent or more were utilized the previous year.

Educational choice is gaining momentum in Pennsylvania. From the introduction of education savings account bills in the House and Senate, to opinion polls showing majority support, to the $25 million EITC increase, parental choice in education has made great strides. Enacting HB 2530 would be a tremendous step toward ensuring every child receives the best education possible.