Could Pennsylvania finally be getting some transparency for its school voucher program? A bill that just passed in the House (105-97) might do just that if operators of parochial and private schools don’t shut it down first as it heads to the state Senate.
Pennsylvania has had a pair of tax credit scholarship school voucher programs (Educational Improvement Tax Credits (EITC) and Opportunity Scholarship Tax Creditst (OSTC)) for over 20 years. A tax credit scholarship program funds vouchers by taking private donations from taxpayers or businesses who, in turn, can claim credit for those donations on their tax returns.
The donations go to scholarship granting organizations that in turn pass the money on as “scholarships” (because the term “voucher” tests poorly with the public) to families. There are hundreds of SGOs in the state, most directly connected to a particular private or parochial school.
The program has collected over $2 billion; in the current year, it will use $680 million—four times what the program used just a decade ago. That’s a lot of taxpayer money that is not going to the state.
But here’s the curious thing about the EITC program—nobody really knows where the money goes. A 2022 report from Education Voters of Pennsylvania lays out just how much we don’t know about how these dollars are spent.
Are these vouchers being used by low-income students, or students who are escaping inadequate public schools? Nobody knows.
Another Ed Voters report showed some idea of who was on the receiving end of the money, including schools with discriminatory policies, but only with the broadest information.
To address the information gap, state Representative Nikki Rivera introduced HB 2632.
According to Rivera’s press release, “My legislation would close these reporting gaps and ensure greater accountability so we know that these scholarships have reached the intended students.”
HB 2632 would replace EITC and OSTC with a new program called Education Opportunity Tax Credits. The EOTC would have several features missing from the current programs.
Most notably, the new program would include thorough reporting requirements that would track how and how effectively the money is being spent. Under the current program, contributions disappear into a black hole with no reporting of how the SGO spends the funds, who receives the vouchers, how effectively the receiving school educates them, or how many students the private school accepts or turns away.
The program is, in effect, spending tax liability — uncollected revenue — that was destined for the state coffers. Taxpayers will pick up the slack, either in the form of reduced services or increased taxes. They’re entitled to know how these funds are being spent, especially if they are being spent to give tuition breaks for the wealthy or to support schools that discriminate in ways that would be intolerable and illegal in the public schools.
The tax credits would be distributed over four sorts of programs:
- At least $375 million for private and religious school vouchers.
- At least $74.5 million for educational improvement programs.
- At least $30.5 million for early childhood scholarship programs.
- At least $200 million for private and religious school vouchers for economically disadvantaged scholarship programs.
These amounts are unchanged from previous years. Despite the noises being made by opponents of the bill, the funding for the vouchers has not been cut by a single dollar.
READ: Systemic Racism and Ableism Mar Pennsylvania Preschools, Report Finds
EOTC would set income eligibility caps at $120,000, plus 10% for each eligible student. There’s a higher amount for students with disabilities, and the entire formula is tied to increases in minimum wage. This marks a lowering of the eligibility cap to better target actual low-income families.
The new program would also target students living in the attendance area of a low-achieving public school or attending a nonpublic school in a low-income ZIP code.
Public schools would be eligible to participate in the new program, accepting students from outside their district who are using EOTC vouchers for tuition.
The school choice crowd is unhappy with the bill, but they have also been caught flatfooted by last-minute changes. You may see references from opponents to a “$102 million cut for scholarship organizations.” This was a disingenuous reference to the original language of the bill, which shifted funding between the different categories. Around $116 million in tax credits for private and religious school vouchers went unclaimed last year, so the bill originally shifted that funding to other categories, cutting the first category from $375 million to $273 million — close to the amount of tax credits actually claimed last year. In other words, they are protesting the “cutting” of money that was never actually there, and which was added to other parts where it could do more good.
But as already mentioned, none of that is currently true; the version of the bill that passed the House does not change a cent of funding.
There have been no funding cuts.
That leaves opponents nothing to complain about except accountability measures.
The Erie diocese is urging “families, alumni, parishioners, donors, and community supporters“ to contact legislators to protest the non-existent cut and “new administrative requirements.”
The conservative PA Family Institutey urges supporters to protest the “burdensome regulations” that call for things like regular audits by the Auditor General and “new reporting requirements.”
Real Clear Education called the bill a “moral failure.” Their piece was carried by the Commonwealth Foundation, which likes to cite how EITC has served students from low-income households, data based on an incomplete sampling of voucher students from Simple Tuition Solutions, a company that manages some scholarships. STS cites a study of under 7,000 students, while Commonwealth Foundation cites 101,000 students using EITC vouchers.
The Commonwealth Foundation has no actual idea what the demographics of voucher recipients might be, and that’s understandable, because under current law the state does not collect any information about the recipients of the vouchers. Nobody knows what the demographic picture of recipients is. That is what HB 2632 addresses by adding accountability and transparency measures.
Wouldn’t be great to be able to have a conversation about the effectiveness of the program based on actual facts?
READ: Trump Ramps up Education Department’s Dismantling With Changes on Special Education and Civil Rights
In the meantime, I am watching the internet, certain that at any moment these opponents of the bill will be announcing, “We’re so relieved! No money has been cut! No students will lose access to vouchers! We will all have better data with which to discuss the issues! We are now big fans of HB 2632.”
I am watching for that, but I am not holding my breath.
It is not to the benefit of voucher fans to have more data because it is likely to show that in Pennsylvania, as in other states, vouchers are used mostly by wealthy families that were never in public school to begin with and that vouchers are mostly steering public dollars to private religious schools, many of which are highly discriminatory.
Nor can voucher fans like the restrictions that help insure that resources are steered toward students with real need. Nor do I expect they’ll be excited about public schools being allowed to compete for voucher dollars.
As Susan Spicka, executive director of Education Voters of Pennsylvania told me:
“The opposition to this bill makes you wonder how private schools and the organizations funneling money to them spend the hundreds of millions of tax dollars they receive annually through education tax credit programs. If they are doing what they are supposed to be doing it seems they wouldn’t mind some additional reporting requirements and transparency for their spending.”
For those interested in data-informed decisions about the responsible use of tax revenue, there is no down side in HB 2632. For those who would like to operate with plenty of public dollars but no public scrutiny, the bill is a threat.
The bill has passed the House and will move on to the Senate. Contact your senator. Tell them you’d like more accountability from Pennsylvania’s voucher program (and tell them that the “$102 million” cut is not true).
