Helping Kids Through EITC and OSTC

Governor Tom Wolf wants to be sure that children from poor parts of the state can get a good education. In his 2018 budget address he called for ensuring “your zip code doesn’t determine what kind of education you can get.” In his 2019 address, Wolf said he wanted to “make sure that our children’s opportunities are not restricted by his or her zip code.” The governor’s Schools That Teach Initiative aims to “support and improve educational opportunities for all students—regardless of their zip code.”

Governor Wolf will very shortly have a chance to match his words with actions as House Bill 800 arrives on his desk.

HB 800 would expand the Educational Improvement Tax Credit (EITC) program. The EITC and the Opportunity Scholarship Tax Credit currently provide scholarships to about 50,000 low- and moderate-income K-12 students, allowing parents to move them out of their zip-code assigned public schools in pursuit of the best possible education. It is, in other words, exactly in line with Governor Wolf’s stated aims.

The bill would increase the size of the EITC program by $100 million and escalate that total in future years if the program is fully utilized. EITC scholarships are 100 percent privately funded and do not change the amount of money allocated to public education or to school districts.

In fact, the EITC and OSTC have saved taxpayers upwards of $5 billion since 2002, according to a new study from EdChoice. This shouldn’t be surprising, given the EITC and OSTC serve 2.8 percent of K-12 students—larger than the Pittsburgh school district—at a fraction of the cost.

Meanwhile, lawmakers are expected to increase public school funding by $400 million in the state budget this year, on top of a record high $30.2 billion in public school spending in 2017-18. Incredibly, school district have amassed $4.6 billion in fund reserves, enough to fund these scholarship for 42 years!

Even at its existing small size, the EITC is making a big impact. Consider a few of the schools whose students would benefit from the program:

Gesu School Students

  • Logos Academy in York, which serves 275 students through an open enrollment policy. The student population is 82 percent minority and 66 percent below the poverty line (fact sheet on populations served);
  • Gesu School in Philadelphia, which serves 450 students, 100 percent of whom are on free and reduced lunch. The student population is 99 percent black and 90 percent graduate on time while 85 percent attend college;
  • Joshua Group offers an intensive academic tutoring and social mentoring after-school program serving more than 100 K-12 students attending both public and private schools in Harrisburg. The Joshua Group also provides scholarships to help more than 150 low-income K-12 city students attend a private school;
  • Independence Mission Schools in Philadelphia serves nearly 5,000 students, 70 percent of whom are eligible for a free or reduced lunch and 80 percent live in families making less than $50,000 a year. Seventy-five percent are non-Catholic, and 71 percent are African-American while 16 percent are Latino and 8 percent are Asian;
  • Children’s Scholarship Fund in Philadelphia, which has so many applicants for scholarship, they hold a lottery to select recipients. Seventy-six percent of CSFP scholarship recipients are eligible for free or reduced school lunch.
  • Extra Mile—which supports schools including Sister Thea Bowman Catholic Academy and St. Benedict the Moor School in Pittsburghcurrently serves more than 600 children from pre-kindergarten through eighth grade. The majority of these students are African American and non-Catholic, and more than 80% of qualify for free and reduced lunch.

Unfortunately, the existing EITC caps are holding back low-income students. Last year alone, 49,000 student scholarship applications were denied and there is a waiting list of nearly $180 million to donate funds under these tax credit programs. Governor Wolf has a chance to make good on his words and deliver more education opportunity to tens of thousands of kids across the commonwealth.