Six months overdue, Pennsylvania’s state elected officials still do not have agreement about a spending plan for the 2015-2016 fiscal year. The consequences of this budget impasse may not just affect certain programs; they could also be devastating to the entire community.
The Educational Improvement Tax Credit (EITC) and the Opportunity Scholarship Tax Credit (OSTC) programs are funded by companies that contribute to scholarship organizations in exchange for a tax credit.
The longstanding EITC program has helped countless parents pick the best school for their children, including our Catholic schools. Thousands of the most vulnerable children are at risk of losing their scholarships. The OSTC program particularly helps the poorest families in the neighborhoods with the worst performing public schools.
Business owners who wish to contribute to scholarship or educational improvement organizations applied on time in July, but they cannot send in their checks until they receive confirmation that their tax credits are approved. Unfortunately, without a state budget, the Department of Community and Economic Development (DCED) is choosing to withhold these mandatory approval letters. The 2015 tax year is coming to an end. If the scholarship donations are not made by December 31, they cannot be declared on this year’s tax returns. These donations will not be recovered if the tax credit letters are not issued soon.
The consequences to taxpayers here are doubly devastating – when many families cannot pay tuition on their own, students will be pulled from Catholic schools. Yet every child must go to school somewhere. Already struggling public school districts will have to find the means and make the room to add the influx of additional students in the middle of this school year and even more in September.
The Pennsylvania School Performance Profile website calculates the average cost per public school pupil at $14,924.08 per year. Non-public schools are good for the community. Without them, the taxpayers would have to pay an extra $2.28 billion this year alone to cover the new public school students. Inaction on the EITC/OSTC programs has dire and costly consequences.
We need the budget to be settled now. Short of that, we need a commitment from the governor’s administration and the General Assembly that will allow businesses to claim the credit in 2015 even though the contribution is made in 2016.
Citizens feel like they are under siege. Schools, human services agencies, and health care providers that leverage the state dollars to meet the needs of the poor are shutting down or borrowing into potentially crippling debt to keep their doors open. Pennsylvania cannot stand this impasse any longer. Please send a message to your legislators and the governor urging them to make the necessary tough decisions to get the EITC and OSTC back on track. Tell them to consider the long-term consequences of inaction.