By Nathan Benefield
Pennsylvania’s new state budget includes a historic $125 million expansion of two successful scholarship programs: the Education Enhancement Tax Credit (EITC) and the Tax Credit for scholarships (OSTC). This expansion will provide 31,000 more students with scholarships to the academic setting that best meets their needs.
These vital programs represent a drop from the overall state budget of $44 billion for 2022-23, which included $1.6 billion in additional funding for public schools.
Tax credit scholarship programs have a long track record of success. The EITC engages the business community in education, as businesses donate to scholarship organizations, providing educational opportunities for low- and middle-income students.
As a result, more than 200 scholarship organizations have awarded 767,000 scholarships since the program’s inception in 2001, with an average scholarship amount of $2,200. They represent a tiny fraction of the nearly $20,000 per student spent by school districts that, despite massive funding increases, have lost students and seen their performance plummet.
Because of this disparity, tax credit grants have saved taxpayers more than $4 billion in avoided costs. And an economic impact analysis found that expanding scholarships in Pennsylvania would generate billions of dollars through increased lifetime earnings and reduced criminal justice costs.
Despite the popularity and success of these programs, public school unions and special interest groups in Harrisburg that the unions subsidize have attacked the programs. Their complaint: Gov. Tom Wolf’s Department of Community and Economic Development does not collect personal data on scholarship students.
Ultimately, responsibility stems from parental control over their child’s upbringing. Nonetheless, evidence shows that scholarship programs provide students with more opportunities and better academic outcomes.
Consider the Children’s Scholarship Fund Philadelphia (CSFP), which offers more than 5,000 scholarships per year. Due to scholarship funding limitations, CSFP has many more applications than available scholarships and awards scholarships through a lottery system.
CSFP primarily serves low-income students, with an average family income of $40,000, and 77% of students come from low-performing public school areas. Despite these challenges, 98% of CSFP scholarship recipients graduate from high school on time, with test scores and college attendance rates that far exceed those of the Philadelphia school district.
These incredible results are happening all over Pennsylvania. Pittsburgh’s Neighborhood Academy faces similar challenges: 70% of students have household incomes below $30,000, and 84% would otherwise be in underperforming public schools. Yet Neighborhood Academy has a 75% graduation rate and 57% of students are above grade level in math.
In York, one of the worst-performing school districts in Pennsylvania, 54% of students attending Logos Academy come from poor families and 21% from struggling middle-class families. Yet, while charging the average family less than $2,000 in tuition after financial aid, more than 60% of Logos students exceed the national average in reading and math.
No wonder polls show that 46% of parents would choose private schools if money weren’t an obstacle.
Expanding educational opportunities helps families overcome the challenges of poverty and school segregation. But a student’s future shouldn’t be determined by a lottery.
Despite the incredible expansion of the tax credit scholarship program, there is still much to be done. More than 75,000 scholarship applications were refused last year, and the increase in scholarship tax credits is not enough to end the waiting list.
One solution to this unmet need is the Lifeline Scholarship Program to provide an Educational Opportunity Account (EOA) for students in the 15% lowest performing district schools. This legislation was passed by the Pennsylvania House in April and has broad support: 84% of voters support the creation of EOAs for students.
Similar EOAs are available in ten states, including Arizona, which just adopted a universal program open to all students in the state, and neighboring West Virginia, which adopted the Hope scholarship program last year. last.
By expanding the EITC and OSTC, despite Wolf’s resistance, lawmakers provided educational opportunities for thousands more students. Pennsylvania’s next governor should build on this success to make Pennsylvania a leader in parent empowerment.
Nathan Benefield is Senior Vice President of the Commonwealth Foundation, Pennsylvania’s free market think tank.