Opinion: Are Pennsylvania’s taxpayers helping students from low-income families to attend high-quality academic institutions, or are we financing lavish lifestyles for well-to-do households?

In this op-ed, Pennsylvania resident Coleman Poses, advocates for additional accountability to ensure taxpayer-funded scholarships are properly accounted for and allocated to students in need.

Are Pennsylvania’s taxpayers helping students from low-income families to attend high-quality academic institutions, or are we financing lavish lifestyles for well-to-do households?

While we know that such a problem exists in other states, we have no idea to what extent the problem occurs here. 

The problem in question is a program in Pennsylvania called the Educational Improvement Tax Credit (EITC). EITC enables a business that contributes money to a scholarship organization to lower its state tax liability anywhere from 75% to 90% of its contribution. With that contribution, the scholarship organization is then able to offer private and religious school scholarships to students.

There are several concerns that taxpayers should have about this program:

1. There is no cap on the amount of the scholarship, allowing someone to attend an institution like the Hill School, where the current annual day school tuition for high school is $49,350; and
2. The EITC program allows families making up to 500% of the Federal Poverty Level to qualify for these scholarships. That means that a family of four making as much as $147,000 annually can compete with families making less than $60,000 a year.

Yet the champions of the 9-digit increases to EITC over the past few budget cycles have suggested that these scholarships are going to the neediest students in the commonwealth.

How do they know? They don’t. The law specifically prohibits the type of data sharing that is necessary to answer such a question and to properly evaluate the success of the program. 

Yet there is reason to believe that very few of these scholarships make their way into the possession of poor families seeking a private education for their children. A 2019 Keystone Crossroads article revealed that over a third of its sample of 151 schools that administer their own scholarship programs reported no low-income students at all.

We also know nothing about the scholarship recipient’s home district, or where the recipient attended school before receiving an award.

So, if a student already attends a costly private school and their family meets the generous EITC guidelines, with a scholarship that child can continue attending the school at no cost, and the savings could be used for family vacations, home entertainment systems, SUV’s, fancy restaurants, and more. And the taxpayer ultimately pays that bill, in order to compensate for the loss of revenue from the tax credit.

Lawmakers had introduced several bills in the state house and senate in the past that would have required data sharing and added accountability to these scholarship programs. Unfortunately, the committee leaders in the two chambers at that time refused to advance those bills for a vote. 

More recently, there have been some changes in the General Assembly that indicate legislators may be more open to learning who benefits from these programs. In February, Representative Joe Ciresi (D., Montgomery) introduced HB 2063, which would assure:

1. that there are guidelines on the use of administrative expenses claimed by scholarship organizations, requiring them to be documented and related to the job of distributing the actual scholarships;
2. that beneficiaries of these scholarships come from households with incomes not to exceed 200%; and
3. that the state be provided with information regarding a scholarship recipient’s home district, where the recipient attended school before receiving an award, as well as aggregate performance data of the schools receiving the scholarship tuition.

Detractors have claimed that the bill would place a hardship on the scholarship organizations to collect such data. Yet public school districts collect this type of information routinely. Shouldn’t private institutions have similar capabilities?

For additional information about this bill and what you can do to support it, you can go to: https://actionnetwork.org/letters/vote-yes-on-hb-2063.

While scholarship recipients are the consumers in this market-based approach to public education, the customers are the taxpayers who – either indirectly through tax credits, or directly, through school vouchers – pay for these programs. And the only way to “Let the taxpayers beware” is to provide the information needed to determine if the service that they are paying for is in fact providing a public good.

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