Is Pennsylvania Poised for a Giant Leap in Student Opportunity?

For kids who need a choice and a chance, help may be on the way.

In Tennessee, both chambers of the state legislature passed Education Scholarship Account (ESA) legislation (click the link to learn more about ESAs in Pennsylvania), while the Florida Senate passed legislation to create a new scholarship program, the Family Empowerment Scholarship.

And here in Pennsylvania, Speaker Mike Turzai has proposed legislation (HB 800) to increase the tax credit cap for EITC (Educational Improvement Tax Credit) K-12 scholarships by $100 million next year. This would be the largest one-year increase in the program since its inception.

Adopted in 2001, Pennsylvania’s EITC program allows businesses to fund students’ private school tuitions. The business receives a tax credit (90 percent for two-year commitment or 75 percent for one year) from the state to offset their investment.

The state caps the number of tax credits they issue each year, shown below:

Table: Tax Credit Scholarship Caps

HB 800 would also implement an automatic annual escalator for the EITC K-12 scholarship cap, making more scholarships available to keep pace with student demand. Beginning July 1, 2019, the amount of available tax credits would increase by 10 percent if 90 percent of tax credits were used the previous year. These increases could empower up to an additional 90 thousand Pennsylvania K-12 students with scholarships within the next five years.

Florida’s tax credit scholarship program illustrates just how transformative an automatic escalator can be.

Florida and Pennsylvania each enacted tax credit scholarship programs in 2001. The two states followed similar paths until 2011, when Florida adopted an automatic escalator that increases the tax credit cap by 25 percent when at least 90 percent of available credits are used.

Florida’s tax credit cap is now four times Pennsylvania’s and serves more than twice as many students.

Graphic: Florida vs. Pennsylvania

Sadly, many Pennsylvania students seeking the chance for their best-fit education are turned away. In 2016-17 (most recent data), 43 percent of EITC student applications were denied due to program limits. And in 2018-19, $80 million in EITC business donations—money from business owners who want to invest in students—were waitlisted.

Graphic: Scholarship Tax Credit Wait Lists

EITC provides opportunities for low- and middle-income students to thrive. It connects businesses with their communities, schools, and families. Government is the only obstacle to more students accessing these opportunities.

Speaker Turzai’s bill solves that problem.

A well-educated society thrives and prospers—meaning the opportunity here is high, and so is the cost of inaction. Without reform, students will continue to be denied access to a quality education, be less likely to attend and graduate from college, more likely to persist in poverty, and more likely to engage in criminal activity and become incarcerated.

It's time to end the limits on student choice, opportunity, and prosperity.