Can ESAs Coexist with Tax Credit Scholarships? Absolutely

As lawmakers move closer to introducing education savings accounts (ESAs) in Pennsylvania, some may wonder how ESAs would coexist with the commonwealth’s private scholarship programs, the Educational Improvement Tax Credit (EITC) and Opportunity Scholarship Tax Credit (OSTC).  

To be clear, ESAs are one hundred percent compatible with scholarship tax credits. Supporters of school choice should pursue an “all-of-the-above” strategy when it comes to educational opportunity. This means moving forward with ESAs, as well as expanding EITC & OSTC, strengthening charter school options, and ensuring a vibrant homeschool community.

Keep in mind that the EITC and OSTC provided roughly 50,000 scholarships in 2015. But 50,000 is only 3 percent of the 1,580,000 students enrolled in traditional district schools. Tens of thousands more families must be empowered to find a school best suited to the needs of their children. 

Enter ESAs, which are widely lauded as the next frontier in choice—and rightfully so. These programs are changing lives across the country. What’s more, ESAs are revenue neutral and do not require a new appropriation from state government.

Fortunately, we know ESAs can coexist with other school choice programs. Simply look at the experience in other states.

The ABCs of School Choice, an annual report from our friends EdChoice, is instructive on this point. For example, Arizona operates four separate scholarship tax credit programs while also introducing and expanding its pathbreaking ESA program. Each of Arizona’s tax credit programs have grown to serve more families since the enactment of ESAs.

The experience in Florida is similar. Florida, which has enjoyed a voucher program for students with special needs and a tax credit scholarship program since 2001, also passed an ESA bill in 2014. Now in its third year, Florida’s ESA program serves more than 7,000 children. Notably, children served by Florida’s tax credit scholarships has grown by 50 percent since the ESA program was enacted.

What can Pennsylvanians learn from the experience in Arizona and Florida? Parents across the county are clamoring for additional educational options, and there is plenty of room for a new school choice program in the commonwealth. ESAs and scholarship tax credits are perfectly compatible.