Pennsylvania’s tax credit scholarships are life-changing programs that help students succeed and taxpayers save.
According to brand new analysis by Martin F. Lueken, Ph.D. of EdChoice, tax credit scholarships under Educational Improvement Tax Credit (EITC) and Opportunity Scholarship Tax Credit (OSTC) programs have produced a cumulative savings of $3 to $5 billion.
Critics of these programs often depict them as harming local school districts, but Lueken’s research shows the opposite. The total savings realized at the district level—$4 to $6 billion over the life of the programs—more than offset the $1.1 billion in tax credits issued by the state treasury.
The savings occur when students switch from the school district to a private school on a tax credit scholarship. The school districts retain all local property tax, state, and federal revenue, but the variable costs are transferred with the student to the new, private school. Additionally, tax credit scholarships help reduce classroom sizes for district schools.
Infographic: Tax Credit Scholarship Savings
Furthermore, overall school district funding in Pennsylvania remains well above the national average.
According to the latest data available from NCES, Pennsylvania ranks ninth in the nation in overall per-pupil funding. In fact, Pennsylvania public schools receive nearly $4,000 more than the national average.
Infographic: Pa. Per Pupil Funding vs. US Average
In terms of state aid, Pa. districts received $12 billion from the state in 2018-19. This is an all-time record and a 20 percent increase since 2014. That said, the funding formula (the way education dollars are distributed) needs to change. The fair funding formula is a more sensible, student-based solution than the current “hold harmless” model.
Infographic: Pa. State Aid to School Districts
Tax Credit Scholarships have been a lifeline for hundreds of thousands of Pennsylvania students. But each year, tens of thousands are denied the opportunity to thrive because of program limits. These programs save money for the taxpayers while also giving children the chance of a better life. Let’s raise the limits on tax credit scholarships and boost student opportunity in Pennsylvania!