Senate panel introduces bill to expand scholarship tax credit caps
By Marley Parish
A proposal to increase tax credit caps for companies that donate money to private school scholarship funds was advanced by a Senate committee on Wednesday, with the author saying it will “save lives”.
Opponents, however, argue that the legislation will hurt public schools and lead to higher taxes.
Drafted by state Sen. Mike Regan, the bill would automatically increase the Education Enhancement Tax Credit and Scholarship Tax Credit caps by 25% each fiscal year when at least 90% of available credits are claimed in the previous year. Regan introduced an almost identical bill in 2019, but he never saw a vote in committee.
“Some of these children may never have the opportunity to lift themselves out of poverty or [an] an inevitable life of crime and prison,” Regan told the Senate Education Committee, which voted 7-4 to send the bill to the full Senate. “Because their taxpayer-funded schools continue to fail to provide them with the education and support they need to break this horrible cycle.”
An estimated 40,000 to 50,000 students each year are denied admission to private schools due to a lack of available scholarship funds, Regan said. Echoing calls for so-called “school choice” measures circulating in the Republican-controlled General Assembly, he added that students should be given the opportunity to learn in a setting that works best for them.
The Pennsylvania School Boards Association opposes the measure, saying the bill would increase tax credit programs to $2.6 billion over 10 years. In a letter to the Senate committee urging a vote against the proposal, the association said it would “shift much-needed resources away from other critical priorities,” particularly schools in “resource-poor communities.”
The Pennsylvania State Education Association also opposes the legislation. In a statement to the Capital-Star, Chris Lilienthal, a spokesperson for PEAS, said the bill will provide “a massive increase in tax relief for corporations that contribute to private and religious schools.”
“Each year, these tax relief programs will receive funding increases of 25%, more than 10 times the percentage increase that public schools typically receive in any given year,” he said. declared, estimating the potential impact. “This dramatic shift in education funding will inevitably come at the expense of our public schools which educate nine out of 10 Pennsylvania students.”
Pennsylvania’s education funding system, which relies on a formula that uses outdated population money to allocate money to schools across the state, has been a point of contention in Harrisburg. The state adopted a modernized version of the appropriations in 2016, but the formula only applies to new funds.
“We have too many schools that are not fulfilling their responsibilities to some, if not all, of their students,” Regan said, adding that “throwing more money at these failing schools” is not a solution. “And when we force kids to stay in a designated school district simply because of their zip code, we’re doing them a complete and utter disservice.”
All four Democrats on the 11-member committee opposed the proposal.
Sen. Lindsey Williams, D-Allegheny, the ranking Democrat on the panel, disagreed with the premise that the legislation will keep Pennsylvanians out of jail and noted potential cuts to state programs or higher taxes to compensate for lost revenue as a result of the proposed escalator.
“I really hope the Commonwealth Court watches this legislation,” Williams said, referring to the ongoing trial in a case that could transform how Pennsylvania funds its 500 public schools. “This legislation is an indication of the Legislative Assembly’s willingness to fully invest in public schools to meet our constitutional obligation to provide a comprehensive and effective education system.”
Marley Parish is a reporter for the Pennsylvania Capital-Star, where this story first appeared.