Pennsylvania should expand education tax credit program

It’s been nearly two decades since Pennsylvania created a program that has improved the lives of literally hundreds of thousands of Pennsylvania children. Known as the Education Improvement Tax Credit (EITC), it awards funding to children in need so that they may attend the schools of their choice.

Scholarships are provided by our job creators in exchange for a tax credit from the commonwealth and are available in three categories: pre-K; K-12; and educational improvement (through after-school and educational activities in public schools). Scholarships in these categories are awarded to children, so he or she can choose what school to attend. Needless to say, these scholarships have opened new doors to so many needy children.

Government is so often criticized for not doing enough to help children, but here is a clear example of Pennsylvania opening new doors to help its most needy children. The EITC program provides more than 70,000 students with educational scholarships every year to attend the schools of their choice in nearly all of Pennsylvania’s 67 counties and 500 school districts.

With such a successful track record since the program was introduced in 2001, it’s time to expand and help even more students reach their education and professional dreams. Right now, there are over 63,000 eligible students on a waiting list to receive an annual scholarship and the interest is there from the business community to help each and every one of them.

The Pennsylvania Department of Community & Economic Development (DCED), which oversees the program, has over $135 million in eligible business applications that were denied tax credits this year and were placed on a waiting list.

House Bill 800, sponsored by Pennsylvania Speaker of the House Mike Turzai, would go a long way in helping to solve this problem by providing an additional $100 million annually. It would include an escalator clause providing an additional 10 percent increase each year when at least 90 percent of the tax credits were claimed in the prior year. An escalator is important because while Pennsylvania was a trailblazer in the EITC program, states like Florida incorporated such a clause and now serve twice as many students.

There remains plenty of room for growth of the EITC in Pennsylvania. Despite spending $8 billion annually to fund basic education in public schools, EITC represents less than .03 percent. This is essentially a rounding error in the commonwealth’s overall $30 billion-plus spending budget in 2018-19.

It’s important to note all schools that accept EITC scholarship students hold all necessary accreditation requirements by the state Department of Public Education. The schools that scholarship recipients attend provide parents with academic progress reports and college placement statistics, and students take standardized tests that help parents gauge their child’s success relative to peers statewide and nationally. The success is evident. For example, private schools that accept EITC have a 95 percent graduation rate, and more than 92 percent of their graduates attend a two- or four-year college.

Taxpayers should support EITC programs because it also saves money. Nationally, they saved taxpayers as much as $3.4 billion through the 2013-14 school year, according to a study by Dr. Martin F. Lueken, director of fiscal policy and analysis at EdChoice. It stands to reason that those figures only have grown significantly since then. It’s clear that EITC is doing wonderful things for children all across Pennsylvania. House Bill 800 deserves support and passage from the General Assembly and Wolf administration.