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Bill to increase caps on school-choice tax credit programs clears Pennsylvania Senate committee

By Victor Skinner | The Center Square contributor

(The Center Square) – The Pennsylvania Senate Education Committee advanced legislation Wednesday to automatically expand school-choice programs during times of high demand.

Sen. Mike Regan, R-Dillsburg, pointed to his experiences with troubled youth during his law enforcement career and the attitude of disregard for education in some of the state’s worst public schools as motivating factors for sponsoring Senate Bill 527.

The bill automatically would increase caps for the Educational Improvement Tax Credit (EITC) and Opportunity Scholarship Tax Credit (OITC) programs by 25% for every fiscal year when at least 90% of the available tax credits are claimed in the previous year.

“Ultimately, this is about lives,” Regan testified Wednesday, “Changing and improving the lives of kids.”

Regan also spoke to how “life-changing educational experiences (translate) into fiscal benefits for this commonwealth.”

Regan cited a study that said expanding the program will create $7.4 billion more in lifetime earnings from increased academic achievement and $2.3 billion for increased economic output and reductions in social costs associated with additional high school graduates, as well as $260 million from reduction in crimes.

“The billions of dollars that we will experience in return will more than cover the increase of $100 million (annually) in tax credits,” he said.

“We have too many schools that are not fulfilling their responsibilities to some, if not all, of their students,” Regan said. “We would not allow these students to remain in an abusive home where their basic needs are not being met. Why then do we turn a blind eye to such treatment by failing schools?

“Quite frankly, throwing more money at those failing schools has proven time and time again not to be the answer to the problem.”

Sen. Scott Martin, R-Strasburg, offered a technical amendment to the bill to update figures in the legislation before the committee voted, 7-4, to send the measure to the full Senate for consideration.

Sen. Lindsey Williams, D-Pittsburgh, questioned the cost of the expansion, citing an estimated increase of more than $2.3 billion over 10 years.

“I really hope that the Commonwealth Court is watching this legislation as an indication of the Legislature’s willingness to fully invest in public schools to meet our constitutional obligation to provide a thorough and efficient system of education,” she said, alluding to the ongoing school funding lawsuit in court.

Regan countered Williams’ concerns by citing the financial benefits of students who receive a quality education, both to the students and society in general.

“You have a human factor here,” he said. “Save a kid’s life, what’s that worth? What’s that worth to you?”

A legislative memorandum on SB 527 explained how the current cap on the EITC and the OITC is constricting both programs, which allow businesses to receive a tax deduction for contributions to scholarship organizations that provide tuition assistance for nonpublic schools to eligible students.

“We know increasing the caps allows more children to receive scholarships. The $25 million increase we passed in 2019 provided an additional 8,000 scholarships. But still nearly 43,000 student applications were denied,” the memo read. “We also know businesses want to contribute more to the program. Each year, businesses that apply for tax credits are turned away due to the caps – to the tune of millions of dollars in lost donations. The automatic escalator would solve this mismatch.”

“I think it’s important to point out these institutions have to go out and raise these dollars from private entities or individuals to pair up in order to qualify for that credit,” Martin said in committee. “The sheer fact that we had 42,000 kids that were paired up – families who wanted that opportunity who were denied simply because of an arbitrary cap even though the dollars could have been there – what we’re doing here is making a connection.”

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  • Maybe I don’t understand it, but I believe what this program does is allow businesses to save on their tax bill by contributing to charter schools. The article from The Center Square, with information provided by the Republican legislators, very cleverly doesn’t explain that. I very firmly believe that the state and local governments should be totally responsible for public education. I’d like to see one strictly managed cyber school, run by the state, to provide for children whose parents don’t want them to attend school in person. For-profit schools at public expense are just plain stupid.

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