Penn. Tax Credit Off to Fast Start

Published July 1, 2002

In just 10 months and with little publicity, more than 1,140 companies have taken advantage of Pennsylvania’s Educational Improvement Tax Credit (EITC).

Advocated and signed into law by former Governor Tom Ridge, the EITC provides companies with a 75 percent tax credit for donations to scholarship or educational improvement organizations. The credit rises to 90 percent if a company makes a two-year commitment.

Since August 2001, companies have pledged over $32 million in donations to Scholarship Organizations, which help fund tuition to nonpublic schools, and over $20 million in donations to Educational Improvement Organizations, which fund innovative programs in public schools. Almost all of the pledges cover a two-year period.

“It’s encouraging that so many businesses have decided to help families have access to the schools of their choice and fund innovative programs in public schools,” commented Dennis Giorno, executive director of the Harrisburg-based REACH Alliance (Road to Educational Achievement Through Choice). “We’re confident that when all is said and done, the EITC will be one of the most effective and popular programs the General Assembly has enacted.”

The REACH Alliance, which was actively involved in the drafting and passage of the EITC, expects at least 8,000 to 10,000 families from every region of the state to benefit from the education tax credit in 2002. David Bowman, a member of the Keystone Christian Education Association Scholarship Committee, recently presented $100,000 in scholarship awards to 215 students in more than 34 counties.

“It’s been heartening to see many parents and businesses concerned about the education of the children,” he said, “but there is more work to do.”

Although state tax revenues are reduced when businesses take the tax credit, each family that uses a scholarship to transfer a child from a public school to a private school reduces enrollment at public schools, which in turn would be expected to save taxpayers money. But Fred Cabell, education director of the Pennsylvania Catholic Conference, points out the scholarships also help struggling families keep their children in private schools, thus preventing an enrollment increase at public schools.

“What we miss every year is how many switch the other way,” noted Cabell. “Every kid who switches into public schools costs taxpayers at least $7,000.”

Businesses have until June 30, or until the annual thresholds are reached, to apply for tax credits. The thresholds are set at $20 million for the Scholarship Organizations and $10 million for the Educational Improvement Organizations.

For more information …

Further information on Pennsylvania’s Educational Improvement Tax Credit is available from the REACH Alliance’s Web site at

Founded in 1991, the REACH Alliance is Pennsylvania’s grassroots coalition to support school choice. The Alliance represents Pennsylvanians from the business, labor, religious, and civic sectors, from taxpayer groups, and from nonprofit organizations.