BOULDER, CO (November 12, 2024)—A recent Commonwealth Foundation report praises Pennsylvania’s tax credit scholarship programs, which create private-school vouchers funded through tax-credited donations. The report argues in favor of the programs’ expansion, but it has at least three major shortcomings.

Bruce Baker of the University of Miami reviewed Pennsylvania’s Education Tax Credit Scholarships: How EITC Serves Children and Families in the Commonwealth, and found that these shortcomings render the report of little use for policymakers.

The first weakness Professor Baker points out is that the report trivializes the amount of spending on the tax credit scholarship programs, asserting that the $630 million (FY24-25) dollar program is a small fraction—about 1.7%—of the $37 billion spent from all sources (including local and federal) on K-12 public education in the state. But when compared with just the state’s $8.16 billion contribution, that fraction jumps to 7.7%. One of every $13 spent by the state on education goes to this voucher program. This would amount to nearly $4,000 per pupil if distributed to public school district students in Philadelphia, Allentown, York, and Reading—which are among the state’s least well-funded public school districts.

Secondly, the report relies on five cherry-picked “case studies” with limited descriptive information. These case studies cannot therefore support a key causal inference underpinning the report: the assertion that private schools provide better services at bargain prices. The case studies do not adequately report either the resources available (in the private schools or public districts) or the differences in students served.

Finally, the argument that voucher programs yield substantial long-run economic benefits lacks a credible foundation.

In sum, Baker concludes, the report is of little use to policymakers. It essentially pushes them to ask the wrong questions and ignore the right ones when allocating significant sums of taxpayer dollars. The report’s finding that the existing $630 million spending cap on tax credit scholarships should be increased fails to consider better, more equitable, efficient and accountable alternatives for allocating similar amounts of funding.

Find the review, by Bruce D. Baker, at:
https://nepc.colorado.edu/review/tax-credits

Find Pennsylvania’s Education Tax Credit Scholarships: How EITC Serves Children and Families in the Commonwealth, written by Rachel Langan and published by the Commonwealth Foundation, at: https://www.commonwealthfoundation.org/research/pennsylvania-education-tax-credit-scholarships-eitc/