Kids Claim Victory in Pa. Budget - Commonwealth Foundation

Thanks to school choice heroes like Speaker Mike Turzai and Senator Mike Regan, Pennsylvania students will benefit from a $30 million increase in tax credit scholarships. The agreed upon budget package, which Gov. Wolf signed last Friday, increases the Educational Improvement Tax Credit (EITC) cap for K-12 scholarships to $135 million and the Opportunity Scholarship Tax Credit (OSTC) cap to $55 million.

Infogram: Tax Credit Scholarship Caps (K-12)

The $30 million bump in scholarships is the largest increase since OSTC was added in 2012. Based on current scholarship averages, the increase could empower up to 15,000 additional kids with scholarships.

This is amazing news for students. Yet there’s still work to be done.

As CF reported last month, nearly 50,000 tax credit scholarship applications were denied in 2017-18 due to government-imposed caps on the programs. The $30 million tax credit expansion, while welcome, will only help about a quarter of the kids whose scholarships were rejected.

That’s why Pennsylvania should follow Florida’s lead and enact an automatic escalator. Like Pennsylvania, Florida enacted tax credit scholarships in 2001. The two states followed similar paths until 2011, when Florida adopted a provision to increase the tax credit cap by 25 percent when at least 90 percent of credits are used the previous year. Florida now awards twice as many student scholarships as Pennsylvania, and their average scholarship amount is significantly higher.

Infogram: Fl v Pa Tax Credit Scholarships)

Senator Mike Regan has offered a similar proposal, SB 299, which would create an automatic escalator for both EITC and OSTC. Under Senator Regan’s plan, the tax credit caps for each program would increase by 25 percent if 90 percent of the respective available credits were claimed the previous year.

Senator Regan’s plan would rescue kids seeking an alternative to their traditional district school; it would also improve classroom size and per-pupil funding for kids still attending the district school.

The “baby steps” approach to raising tax credit scholarship caps has allowed thousands of children to access the school that’s right for them. However, it’s left thousands more behind. By passing SB 299, lawmakers can ensure the programs have the resources to meet students’ needs.