News Release: House Expands Popular Tax Credit Scholarship Programs

Thousands More Students Could Attend Schools of Choice

March 13, 2017, Harrisburg, Pa.—Today, the Pennsylvania House voted to extend the state’s popular tax credit scholarship programs to thousands more students. HB 250, sponsored by House Speaker Mike Turzai, expands the Educational Improvement Tax Credit (EITC) by $50 million and the Opportunity Scholarship Tax Credit (OSTC) by $25 million—a combined 43 percent increase.

Together, these programs enabled more than 50,000 students to attend the schools of their choice in 2014-15.

“Tax credit scholarship programs are a lifeline for children whose ZIP codes relegate them to underperforming schools,” commented James Paul, senior policy analyst with the Commonwealth Foundation. “We applaud the House and Speaker Turzai for acting to give thousands more students access to educational options that best meet their unique needs.”

Tax credit scholarship programs allow businesses to fund scholarships in exchange for a partial tax credit. Students can use these scholarships to attend a private school suited to their needs. More than 500,000 scholarships have been distributed since 2001.

Click here to view an embeddable, interactive version of the below chart.

Programs like the EITC and OSTC have an impressive track record. Of 18 studies of educational choice scholarship programs, 14 found they improve academic performance.

They also save money. An EdChoice audit found Pennsylvania’s EITC program saved taxpayers roughly $1.3 billion from 2002-14. While Pennsylvania school district spending averaged $15,800 per pupil in 2014-15, the average EITC scholarship was just $1,684 for the same year.

Expanding the EITC and OSTC would fill a vital need. For example, each year Children’s Scholarship Fund Philadelphia turns away nearly 8,000 students who apply for financial assistance to attend a school of choice. If HB 250 becomes law, more students could be served by CSFP and other scholarship granting organizations across the state.

“Tax credit scholarships are a win-win for students and all Pennsylvanians,” Paul continued. “We hope the Senate will act quickly to expand these life-changing programs.”

James Paul and other Commonwealth Foundation experts are available for comment. Please contact Gina Diorio at 862-703-6670 or gld@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.