May 7, 2019, Harrisburg, Pa.—Today, in a bipartisan vote, the Pennsylvania House of Representatives passed HB 800, a school choice bill that promises opportunity to thousands of students trapped in inadequate schools simply because of their zip code.
The legislation, sponsored by House Speaker Mike Turzai, would increase the cap on the state’s Educational Improvement Tax Credit (EITC) K-12 scholarship program by $100 million next year and further raise the cap by 10 percent when 90 percent of tax credits are used in the prior year.
The move comes in response to overwhelming demand for a limited number of scholarships, which are funded by private donations from individuals and businesses that receive a state tax credit in return. Expanding tax credit scholarships is supported by 71 percent of Pa. likely voters, according to a 2017 poll.
“We congratulate Speaker Turzai for championing this transformative bill and applaud all House members who are committed to providing parents a choice in how and where their children are educated,” said Commonwealth Foundation President and CEO Charles Mitchell. “Now, the Senate must also stand up for providing educational opportunity regardless of a student’s zip code, a principle Governor Wolf has repeatedly said he supports.”
In his 2018 budget address, Gov. Wolf called for ensuring “your zip code doesn’t determine what kind of education you can get.” In his second inaugural address, Wolf wanted to “make sure that our children’s opportunities are not restricted by his or her zip code.” And the governor’s “Schools That Teach Initiative” aims to “support and improve educational opportunities for all students—regardless of their zip code.”
“Wolf may soon have the chance back up these words with action,” continued Mitchell. “EITC scholarships enable students in some of Pennsylvania’s lowest-income areas to move beyond their zip-code assigned public school and access an education that better fits their needs.”
The state currently caps tax credit scholarship programs at a combined $172.5 million per year, which is less than 1 percent of public school revenue. This provides about 55,000 scholarships, enabling students to attend the private school of their choice.
However, 43 percent of EITC scholarship applications were denied in 2016-17 due to tax credit caps. When combined with applications to the Opportunity Scholarship Tax Credit (OSTC) program, 52 percent of all K-12 scholarship applications were denied.
There’s no shortage of funding to meet to student demand for scholarships. Last year, businesses applied for $180 million in EITC and OSTC tax credits beyond the current cap but were put on wait lists due to program limits.
(Graphic: Tax Credit Scholarships Donation Wait Lists)
“Families from Erie to Philadelphia and from Pittsburgh to Scranton are sending their children to great schools thanks to the private donations that support the EITC program,” continued Mitchell. “Now, thanks to Speaker Turzai and the lawmakers that joined him in supporting this school choice bill, tens of thousands more families could have that same opportunity.”
Sen. Mike Regan has introduced a similar EITC expansion bill, SB 299.
For more information and analysis see our fact sheet Expand Educational Choice with Tax Credit Scholarships.
Commonwealth Foundation experts are available for comment. Please contact Michael Torres at 850-619-2737 or mbt@commonwealthfoundation.org to schedule an interview.
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The Commonwealth Foundation transforms free-market ideas into public policies so all Pennsylvanians can flourish.
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