Editor’s note: This commentary from Nathan Benefield, senior vice president of the Commonwealth Foundation, appeared Sunday on pennlive.com.
Pennsylvania’s new state budget includes a historic $125 million expansion of two successful scholarship programs—the Educational Improvement Tax Credit (EITC) and the Opportunity Scholarship Tax Credit (OSTC). This expansion will provide 31,000 more students with scholarships to the academic environment that best fits their needs.
These vital programs are a drop in the overall $44 billion 2022–23 state budget—which included an additional $1.6 billion in public school funding.
Tax credit scholarship programs have a long track record of success. The EITC engages the business community in education, as businesses donate to scholarship organizations, providing educational opportunity to low- and moderate-income students.
As a result, more than 200 scholarship organizations have awarded 767,000 scholarships since the program’s inception in 2001, with an average scholarship amount of $2,200. They represent a tiny fraction of the nearly $20,000 per student spent by school districts, which, despite massive funding increases, have lost students and seen performance drop.
Because of this disparity, tax credit scholarships have saved taxpayers more than $4 billion in averted costs. And an economic impact analysis found scholarship expansion in Pennsylvania would generate billions of dollars from increased lifetime earnings and reduced criminal justice costs.
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