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The money, in the millions, helps area children afford private and parochial schools, provides extra cash for public schools, and gives more tykes the chance to attend pre-kindergarten. And, though it’s not directly tied to the state budget impasse, it is apparently at risk of disappearing.
Since 2001 the state’s Education Improvement Tax Credit (EITC) program has granted tax breaks for businesses that donate to state-approved education foundations. A business can get tax credits worth up to 75 percent of a donation for a single year and 90 percent for a two-year commitment.
That idea was expanded in 2012 with the Opportunity Scholarship Tax Credit, or OSTC, which restricts use of donations to scholarships for children living in the attendance zone of state-designated “low performing schools.”
Locally, the money has helped thousands of students. The Diocese of Scranton, for example, raised $1.1 million through the two programs last year, according to Diocesan Secretary for Development Jim Bebla. That helped pay tuition for 1,000 students, one-fifth of total enrollment in diocesan schools.
Wyoming Seminary gets a big boost from the two programs as well, raising between $450,000 to $500,000 a year, helping about 40 students annuallyt, Vice President of Advancement John Shafer said via email.
But the budget impasse has put money for next year at risk. Not because there’s no money in the programs — businesses continue to pledge contributions. The problem: The state Department of Community and Economic Development, which oversees both programs, has not been approving the tax credits.
According to the Pittsburgh Post-Gazette, DCED has determined the lack of a budget means there is no tax code which, in turn, means there can be no tax credits. A call to a DCED spokesperson was not returned Wednesday.
Bebla said, typically, businesses apply in July for the tax credits, receive a letter approving the credits in September or October, and donate the money by the end of the year. “They need to take the tax credits the year they give the money,” he said.
The process has stalled during the budget impasse, Bebla said, but he was skeptical it will become a problem.
“If, for some strange reason, the budget did not pass until the beginning of January, it’s our understanding that businesses would still receive the letter but would have to wait a year to take tax credits,” Bebla said.
The diocese also has long-standing relations with many businesses that participate in the tax credit programs — about 40 annually — and most of them are repeat contributors, Bebla added. In a pinch, he believes many would still contribute until Harrisburg sorts out the budget debate.
Still, keeping the program intact is important, he said “It’s a tremendous help to our families. There’s no question it’s a significant amount of money.”
Shafer said loss or delay of the money will have “a clear impact, especially for those students coming from low-achieving school districts through the Opportunity Scholarship Program.”
While EITC contributions are most often discussed in terms of tuition assistance for private and parochial schools, the law is broad enough to allow other education uses and multiple organizations set up EITC-approved foundations, including school districts and colleges, for preschools or other education-related projects.