Before opening up new vouchers, Josh Shapiro needs to examine the old ones.
While Governor-elect Josh Shapiro considers opening up more school vouchers in Pennsylvania, unanswered questions remain about the voucher program that Pennsylvania already has.
Pennsylvania has a pair of tax credit scholarship programs, Educational Improvement Tax Credits (EITC) and Opportunity Scholarship Tax Credits (OSTC). These programs allow contributors to pay money into scholarship programs for private and religious schools and credit those contributions against their state tax bill.
The program has been in place for over twenty years; more than $2 billion has been spent on private school tuition scholarships, leaving a hefty hole in state revenues.
But that $2 billion has disappeared into a black box, a program that has little transparency or accountability. A report from Education Voters of Pennsylvania lays out the questions that have gone unanswered.
Scholarship organizations number in the hundreds in Pennsylvania, many associated with just one school. They are allowed to keep 20% of the funds donated for scholarships, a generous sum compared to most other states with similar programs. In those states, the cut is between 5% and 10%; Florida allows only 3%. There are no regulations or reporting requirements for these organizations regarding what they do what that 20% cut.
Pennsylvania’s tax credit scholarships are not designed to serve only low-income students. The eligibility cut-off is household income of $99,676 plus $17,017 per child. The program may well serve some number of low-income students, but nobody knows, because the state prohibits collecting that information. Pennsylvania has no idea who, exactly, is being served by these programs.
Are these scholarships being used to help students “escape” low-performing schools to attend a private school? Nobody knows. We do know that the scholarships can be used to fund tuition for students who were already enrolled in a private school, meaning that there is no reduction in expenses for public schools-just a reduction in revenue.
An analysis in 2019 found that in 151 schools that ran their own tax credit scholarship organization, 57 schools enrolled no low-income students at all.
Additionally, there is no auditing requirement, so the state also has no idea if scholarships are being provided to students who don’t meet the income requirement. Nor are there any checks on side deals by which parents could trade contributions in return tuition cuts. Is it possible to use this system to launder a portion of your own child’s tuition by passing it through a scholarship organization and thereby getting a tax credit from the state? Probably, but nobody is checking to see.
We do not know how many students need the voucher funds in order to afford private school. We do not know how many students are denied scholarships because of a lack of program funds, nor how many apply but don’t get the funds because the school rejects the student. That’s a real possibility, as private and religious schools accepting these funds are free to discriminate against students for reasons such as sex, disabilities, sexual orientation, religious beliefs, socioeconomic status, and gender identity or expression.
We do not know which districts the students come from, but we do know that the schools that receive funds are clustered primarily in six Pennsylvania counties (out of 67). And we know that these schools include some of the most expensive elite schools in the state. The Education Voters report offers the example of AIM Academy, which received $1.3 million in scholarship funds for 96 students; that means that the students was funded by the state at $13.5 thousand per student, resulting in a rate of funding higher than that of 97% of students attending public school.
Because the state does not collect information on individual recipients, we also have no idea what educational outcomes are being achieved. Are scholarship recipients getting a better education than they would have if they had attended public school? We have no idea.
Supporters of tax credit scholarship programs argue that the state is not funding the program because the funds never touched the state’s hands. As Kentucky’s Supreme Court just found, that argument does not hold water. Taxpayers are taking on the tax liability of contributors and filling the gap either through increased taxes or decreased services.
When it comes to Pennsylvania’s EITC/OSTC program, we don’t know who it serves, where the money is going, if the limited rules are being observed, or if taxpayers are getting any educational bang for their buck.
Says Education Voters Executive Director Susan Spicka, “It would be wildly irresponsible for state lawmakers or Governor-elect Shapiro to entertain any conversations about expanding school vouchers without first conducting a thorough examination of Pennsylvania’s existing EITC/OSTC voucher programs.”
Considering Shapiro’s interest in voucher programs, Spicka adds, “The ONLY voucher discussion in Harrisburg in the New Year should be focused on examining Pennsylvania’s current EITC/OSTC voucher programs to determine if $2 billion in spending has produced any benefit to the commonwealth over the past 20 years.”
