June 15, 2021, Harrisburg, Pa. — A new study from the Commonwealth Foundation and the American Federation for Children shows that Pennsylvania’s tax credit scholarships are a powerful tool for student success, recipient lifetime earnings, and the state economy. While competition for each scholarship among low- and middle-income families is steep due to government caps, a new bill aims to increase access.
The study, titled “The Untapped Potential of Expanded Tax Credit Scholarships,” reviewed the most rigorous evidence on school choice programs and student outcomes in the United States. By applying that evidence to a bill currently being considered in the Pa. General Assembly that would immediately increase available scholarships, the study finds:
- $7.4 billion in higher lifetime earnings due to increased academic achievement among the students who receive scholarships.
- $2.3 billion in additional economic output within the state due reduced social costs caused by low academic achievement and benefits of additional high school graduates.
- $260 million in savings to states and municipal governments due to reduced crime associated with more local residents with higher academic achievement.
“The state of Pennsylvania is at an educational tipping point,” says Marc LeBlond, report co-author and Commonwealth Foundation senior policy analyst. “In a year that has been dubbed ‘the year of school choice’ because 12 states have already enacted new legislation expanding school choice programs, students here continue to be waitlisted and scholarship donors are turned away. As our report highlights, joining the national movement to prioritize students by passing the Excellence in Education for All Act would not only bring life-changing benefits to thousands of Pennsylvania children, but would also benefit our entire state economy.”
The report analyzes the economic impacts of raising Pennsylvania’s cap on tax credit scholarship through a bill called the Excellence in Education for All Act (SB 1). The bill, which is expected to be voted on by the Pa. Senate this week, would immediately expand the current cap on K-12 scholarships by $95 million and allow for the cap to automatically increase each year if 90% of the available scholarships are used in the previous year.
The current limits on the programs have resulted in 40,000 to 50,000 applications for scholarships by Pa. students being denied each year. In addition, the caps force the state to turn away $100 million in donations annually from businesses and individuals who want to contribute to the scholarship fund, according to the study.
“Tax credit scholarships are an investment in students—enabling their family to find a school that meets their child’s educational needs regardless of their ability to pay,” said LeBlond. “In light of the academic harm caused by COVID-19, policymakers should embrace the chance to unleash the full potential of tax credit scholarships so that more Pennsylvania students have the opportunity to excel in school, enjoy increased incomes, and grow our economy.”
Commonwealth Foundation experts are available for comment. Please contact Michael Torres at 850-619-2737 or [email protected] to schedule an interview.
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The Commonwealth Foundation transforms free-market ideas into public policies so all Pennsylvanians can flourish.