Toomey Wades Into Fight Over $100M Private Schools Bill

Jun 17, 2019

 U.S. Sen. Pat Toomey waded into a budget fight in Pennsylvania on Monday over substantially expanding state taxpayer support for private and religious schools that is stoking pushback from public school advocates. 

Democratic Gov. Tom Wolf is expected to veto the measure, but Toomey, a Republican, wrote to the governor to urge him to sign it and make the case for nearly doubling a tax credit program, increasing it by $100 million to $210 million a year.

Approximately 40,000 children are on a waiting list for the taxpayer-funded scholarship aid to help pay their tuition, Toomey wrote.

"The educational futures of Pennsylvania children should not be jeopardized by political games or partisan politics," Toomey wrote. "I urge you to sign this legislation."

Under the 18-year-old Educational Improvement Tax Credit program, corporations and business people can effectively direct tens of millions in tax dollars to favored private and religious schools. The existing $110 million program subsidizes those donations with a tax credit of up to 90%, meaning a donation of $100,000 may cost the donor $10,000.

Toomey wrote that a few thousand dollars in scholarship money can mean the difference between "being trapped in a failing school or having the opportunity to pursue higher-quality education of their choosing."

Wolf, who campaigned for office on raising support for public schools, still plans to veto the bill, his office said in statement Monday.

The tax-credit program lacks accountability, transparency and oversight provisions in the current law, Wolf's office said. In addition, Pennsylvania's public schools remain underfunded while the legislation lacks a source of money to finance "such a substantial and unprecedented funding escalation," it said.

Wolf's office also called Toomey's letter misleading, since businesses can still donate money whether or not they get a "dollar-for-dollar tax credit."

"If businesses are unwilling to donate to these causes without getting a substantial tax break, that is a decision made by the business, not the commonwealth," Wolf's office said in a statement.

The Republican-controlled Legislature sent the bill to Wolf earlier this month, with votes from just four Democrats. Some Democratic lawmakers criticize the program as already doling out money to families of means who don't need the financial help and say the money would be better spent aiding school districts that are cash-strapped despite already high property taxes.

Some donations go directly to private or religious schools for scholarships. Some donations go to middleman organizations that can withhold up to 20% in administrative costs before distributing the money to the schools.

Families that qualify for a scholarship must report $85,000 or less in annual income, after deducting about $15,600 per child in the household. In other words, a family of four that reports about $115,000 in income can qualify for scholarship aid.

The average scholarship amount was $1,815 in the 2017-18 fiscal year, according to state figures.

In addition to adding the $100 million in tax credits, the legislation would add automatic 10% increases in years after a year in which the tax credit is almost fully subscribed and lift the family income eligibility limit to $95,000. It also would limit administrative cost withholding to 10%.