House passes $100 million expansion of private school scholarship tax credit

Pa. House Speaker Mike Turzai, R-Allegheny ("Friends of Mike Turzai" / WikiMedia Commons)

Update, June 12: Gov. Tom Wolf told the Capital-Star he will veto the legislation. Read more here. 

Original story

The House voted Tuesday to nearly double the size of a state tax credit for individuals and businesses that donate money for private school scholarships.

The bill expands the Educational Improvement Tax Credit Program by $100 million, from the current $110 million per year to $210 million. The bill passed 111-85, with every Republican and four Democrats voting yea.

House Speaker Mike Turzai, the legislation’s sponsor and an ally of school choice, said the bill was about recognizing that “when it comes to education, one size does not fit all.”

“For a variety of reasons unique to each individual, these great public schools are not always the right fit for every child or for every family,” Turzai, R-Allegheny, said in a statement.

In place for two decades, the EITC program allows companies to write off of their taxes 75 to 90 percent of their total donations to private school scholarships.

Pennsylvania is one of 22 states that offers such tax credits. The Keystone State also has another credit aimed only at low-income individuals.

A federal report released last fall found that Pennsylvania’s program led to 34,000 scholarships  — worth $57 million, or roughly $1,600 each — in 2016-17.

Besides expanding the credit initially, Turzai’s bill would increase funding for the program by 10 percent in years when 90 percent of the credits are claimed. It would also raise the maximum income threshold for families of scholarship recipients from $85,000 — plus $15,608 per child — to $95,000.

According to the federal report, 2,690 donors gave $77 million to the program in 2016.

Opponents have contended that the bill sacrifices tax revenue that could be otherwise spent on public schools.

The Pennsylvania State Education Association, the commonwealth’s largest teachers’ union, opposes the bill, claiming it would “benefit a limited number of students,” and that it “does not reflect the current needs and priorities of ordinary Pennsylvanians.”

“The EITC program has received hundreds of millions of dollars since it started, but a lack of accountability and transparency means policymakers have little information to evaluate if the program is working,” PSEA President Rich Askey said in a statement.

There is also concern that the automatic increases could harm the state’s budgeting. Nathan Benefield, vice president and COO of the conservative Commonwealth Foundation, contended the increase was “a small ticket item.”

Since funding cuts in 2011, the state’s education budget has grown from $9.5 billion to $12.6 billion — including a $300 million bump in basic education funding, or money given directly to schools.

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