Back-to-School Disappointment for Thousands

Thousands of kids across Pennsylvania are finishing up their first month of school. For many of them, the beginning of the school year is an exciting chance to catch up with friends and learn new subjects.

But for some students, a return to school brings disappointment.

Pennsylvania’s tax credit scholarships have helped thousands of students attend schools of their choice—schools they can be excited about—rather than the ones assigned to them by zip code. However, each year thousands more are turned away due to arbitrary caps on the amount of available tax credits. In 2016-17 alone, almost 53,000 scholarship applications were denied. That exceeds the number of students in every district except Philadelphia. Since 2012, 50 percent of student tax credit applications have been denied due to program caps.

There is no reason for such disparity between supply and demand. Everyone benefits from Pennsylvania’s two tax credit scholarship programs.

Students who receive scholarships are able to attend a school that better meets their needs. Moreover, numerous studies have shown that increased school choice improves public schools, helping the students who remain.

Taxpayers also benefit. The Educational Improvement Tax Credit (EITC) program, which was launched in 2001, had an average scholarship of $1,658 in 2016-17. A similar program aimed at students in low-performing schools, the Opportunity Scholarship Tax Credit (OSTC), had an average scholarship of $2,420 in 2016-17. Since Pennsylvania spends an average of almost $18,000 per student, EITC and OSTC scholarships offer tremendous savings. In fact, according to an EdChoice audit, the EITC program alone saved Pennsylvania schools over $1 billion between 2002 and 2014 .

Despite the clear benefits of tax credit scholarships, arbitrary caps placed on the programs limit the number of students who can utilize them. Because of these caps, more than 200,000 scholarship applications have been denied in the last five years.

There is a relatively simple solution: an automatic escalator. Like Pennsylvania, Florida enacted tax credit scholarships in 2001. The two states followed similar paths until 2011, when Florida adopted an automatic escalator that increases the tax credit cap by 25 percent when at least 90 percent of available credits are used the previous year. Florida now awards twice as many student scholarships as Pennsylvania, and their average scholarship amount is significantly higher.

Help could be on the way for Pennsylvania students beginning another difficult school year. House Bill 2530, sponsored by Rep. Kristin Phillips-Hill, and Senate Bill 1204, sponsored by Sen. Mike Regan, would institute automatic escalators for the EITC program. By allowing the EITC program to grow to meet demand, more students will be able to attend schools that best meets their needs.

Pennsylvania students deserve to go back to the right school.