April 29, 2019, Harrisburg, Pa.— Last year, Commonwealth Foundation research revealed that more than half of all student applications to Pennsylvania’s tax credit scholarship programs are denied. Now, lawmakers are moving to ensure students have the education options they are so desperately seeking.
Today, the Pa. House Education Committee passed HB 800, which represents the most significant expansion of the state’s hugely popular Education Improvement Tax Credit (EITC) Scholarship program since its inception.
The legislation, sponsored House Speaker Mike Turzai along with 59 other members, including several Democrats, would increase the tax credit cap for EITC K-12 scholarships 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. Seventy-one percent of Pa. likely voters support expanding these caps.
“This bill is a huge step toward helping families access the education choices they deserve,” said Commonwealth Foundation Senior Policy Analyst Marc LeBlond. “Tax credit scholarships are so popular the programs could double in size and still not meet demand. It’s tragic that we’re denying students the education they want because of government-imposed limits on these privately-funded programs.”
(Graphic: Pa Tax Credit Scholarship Demand Outpaces Supply)
Forty-three percent of EITC applications were denied in 2016-17. When combined with applications to the Opportunity Scholarship Tax Credit (OSTC) program, 52 percent of all K-12 scholarship applications were denied.
The state currently caps tax credit scholarship programs at a combined $172.5 million per year. The programs provide about 55,000 scholarships that enable students to attend their school of choice.
“The demand for scholarships is undeniable,” continued LeBlond. “Thankfully, individuals and businesses are trying to step up to meet this demand. All government needs to do is get out of the way.”
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)
A recent Urban Institute study found that tax credit scholarship programs have been proven to increase the recipient’s likelihood to both enroll in college and attain a degree.
“An EITC scholarship may be a family’s only lifeline to provide their child with a chance at a brighter future,” said LeBlond. “It’s time to raise the limits so kids can reach their dreams.”
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 which compares Pennsylvania’s tax credit scholarship programs to Florida’s.
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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