Tax Credits for Education on the Block

In an effort to balance the State’s $3.2 billion budget deficit, the Legislature is looking to cut funding for Pennsylvania’s Education Improvement Tax Credit Program (EITC). The EITC gives businesses a tax credit for 75 to 90 percent of donations to school foundations, preschool programs, and scholarship programs. The EITC provides about $45 million annually for private and parochial school scholarships as well as another $22 million for public school programs. While the amounts of the proposed cuts to the EITC program are not yet known, it is part of a larger Senate budget plan to slash 18 tax-credit programs from $400 million to $150 million.

The EITC program helps low-income people more easily afford private and parochial schools. It is as close to a school choice program as Pennsylvania residents can get. And now the strides that have been made in this area are being threatened in this budget battle. No mention is made of asking public sector union employees, particularly teachers, of foregoing scheduled raises or of holding the public districts’ basic education funding levels constant-moves with the potential for great savings in this economic environment. The Governor has gone to great lengths to protect the public education system and their massive subsidies while private education donation tax credits gets put on the chopping block.

Strengthening the education system in the Commonwealth will only begin when public education is met with strenuous competition. In absence of a pure voucher system, the EITC program has offered the only hope in this regard.