The new Pennsylvania state education budget for the 2005-06 academic year, signed on July 13 by Gov. Ed Rendell (D), contained a victory for school choice–a 10 percent increase in the state’s popular Educational Improvement Tax Credit (EITC), which provides scholarships for students to attend a school that best fits their individual needs.
“Pennsylvanians applaud the General Assembly for recognizing the tremendous impact the EITC program is having on families across the commonwealth and for providing a monetary increase to this innovative and effective program,” said Paul M. Henckels, chairman of the REACH Alliance, the Harrisburg-based group that coordinates statewide efforts to pass school choice legislation. “Thanks to the increase made despite the tight budgetary year, thousands of additional Pennsylvania families will now have access to the schools of their choice.”
The program hasn’t just helped schoolchildren–it has attracted the business community to become more directly involved in education. Through the EITC program, businesses can donate money to help children in their local communities, taking a tax credit of up to 90 percent (for a two-year commitment) for contributions made to qualified scholarship, educational improvement, and pre-K scholarship organizations.
More Money, More Participation
The new budget allows total tax credits to increase from $40 million to $44 million, with $29.3 million dedicated to scholarships and $14.7 million dedicated to innovative educational programs in public schools.
During the 2004-05 school year, 165 scholarship organizations, 230 educational improvement organizations, and 50 pre-K scholarship organizations received donations from participating businesses. Since the program’s inception in 2001, the 2,200 businesses participating in the EITC program have donated more than $140 million to help educate children in the commonwealth.
To receive an EITC scholarship, a family must meet income guidelines set forth in the EITC statute–annual income of $50,000 or less per family, with a $10,000 allowance for each dependent child. For example, a family with three dependent children can earn up to $80,000 and still qualify for the scholarship–$50,000 in income, plus $30,000 worth of allowances.
Last year, about 25,000 students received EITC scholarships. The REACH Alliance estimates that number will reach 27,000 this year.
New Reporting Requirements
In passing the new budget, the legislature also approved additional reporting requirements to ensure accountability for scholarship, educational improvement, and pre-K scholarship organizations.
“I am pleased that my colleagues supported this change designed to protect the integrity of the EITC program–a program that has been successful in helping children and families in Pennsylvania attend the school of their choice,” said Senate Majority Whip Jeffrey Piccola (R-Dauphin), who sponsored the bill in the senate.
“I am deeply gratified that we increased the EITC program by $4 million,” Piccola said. “This is one of the best education programs enacted in Pennsylvania in recent years.”
Andrew T. LeFevre ([email protected]) is executive director of the REACH Alliance and REACH Foundation in Harrisburg, Pennsylvania.
For more information …
For more information, see “More than 1,000 Celebrate Fourth Anniversary of Pennsylvania Tax Credit,” School Reform News, June 2005, available online at http://www.heartland.org/Article.cfm?artId=17113.
“Pennsylvanians applaud the General Assembly for recognizing the tremendous impact the EITC program is having on families across the commonwealth and for providing a monetary increase to this innovative and effective program.”