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Tax credit provides ‘the education we wanted’ for PA family

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By Eric Boehm | PA Independent

HARRISBURG – First-grader Nichole Bartolomeo was getting lost in the shuffle.

She was one of nearly 30 students in her class after the Ellwood City Area School District consolidated four elementary schools into a single building in 2010. She was shy and reserved, and her parents did not think she was getting the kind of personal attention that would bring Nichole out of her bubble.

With a single income – Nichole’s father, Daniel, drives a delivery truck – and twin girls in kindergarten, Nichole’s parents believed they were stuck with public school.

FACES OF SCHOOL CHOICE: The Bartolomeo girls, Sophia, Nichole and Alexa, left to right, receive EITC scholarships to attend Holy Redeemer School in Ellwood City.

Then the Bartolomeos heard about a state tax credit program to help families pay for private school. They enrolled Nichole and her sisters in Holy Redeemer, the local Catholic school, using money from Pennsylvania’s Educational Improvement Tax Credit program – part of an expanding policy of promoting school choice pushed by the governor.

Now, Nichole is one of 15 students in her third grade class at Holy Redeemer. Her sisters, Sophia and Alexa, are among 11 students in the second grade class there.

“We were just so thankful that it was available so we could give our girls the education we wanted,” said Joan Bartolomeo, a stay-at-home mom. “The change has been remarkable.”

Now, Nichole is less shy and more active in school, which Joan attributes to the more personal attention in smaller classes.  Nichole has even recently started singing at weekly Mass in the parish.

Once an industrial town on a rail line linking Pittsburgh and Cleveland, Ellwood City (technically a borough, despite the name) is a bedroom community with a population that has dropped by 40 percent over the last 60 years. About one in every five households is below the poverty line, and there are plenty of empty storefronts on Main Street but few new businesses to fill them.

Sister Joanne Kokosinski, the principal at Holy Redeemer, says more than two-thirds of her students receive at least a partial scholarship under the Educational Improvement Tax Credit (EITC).

Some 45,000 students across the state will benefit from the program this year – a figure that is growing.

Under the credit, scholarships are available to students from families with a household income of less than $60,000 annually plus $12,000 for each additional child. That cap is set to rise in 2013 to $75,000 per family and $15,000 per child.

The General Assembly has made other moves to add more families to the program, enlarging the amount of money available last June from $75 million to $100 million annually and adding a second credit program aimed at low-performing schools.

The average EITC scholarship in Pennsylvania is about $990 per student, which amounts to less than 8 percent of the $12,700 average cost of educating a child in one of the state’s public schools for one year.

PROUD PARENTS: Daniel and Joan Bartolomeo made the tough decision to send their kids to a Catholic school. The state’s EITC program made it a little easier.

For example, one year of tuition at Holy Redeemer costs $3,900 for each family’s first child, though there are reductions for families – like the Bartolomeos – with multiple children enrolled at the same time.

It’s a bill that many families in the community have a hard time paying, Sister Joanne said, but the scholarships help.

The program “enables the idea of being able to choose a school,” she said. “Parents are able to choose a doctor for their kids, and they are able to choose where they want to live, but they are not able to choose a school.”

In June, Gov. Tom Corbett signed into law a second educational scholarship program aimed at helping families who are dissatisfied with public schools. Functionally, it parallels the existing program, but the new initiative – dubbed the Opportunity Scholarship Tax Credit, or OSTC – is targeted at low-income families attending the state’s worst-performing public schools.

The income eligibility for both programs is the same, but to qualify for the opportunity scholarship a student must live within the boundaries of one of the state’s approximately 400 lowest-performing schools as measured by standardized testing. The state Department of Education will update the list of eligible schools each year.

“Students who attend low-performing schools should not be subjected to continued failure in their local school and must be afforded an opportunity to access quality educational programs,” Secretary of Education Ron Tomalis said when the bill was signed into law.

Targeting scholarships to underperforming schools and low-income families makes sense, but the goal should be school choice for all students regardless of their public school’s performance or their income level, Jeff Reed, communications director for the Friedman Foundation for Educational Choice, said. Founded by Nobel Prize winner Milton Friedman, the foundation was an early advocate for increasing educational options in America.

“Just because a school is high performing in general, doesn’t mean it is working for every individual student,” Reed said.

Already, Pennsylvania has the second most robust educational tax credit program in the nation behind only Florida, Reed said.

The key difference between the two is that the program in the Sunshine State has a floating cap allowing it to increase automatically as demand necessitates, provided there is enough funding available from businesses contributing to the scholarship fund. Right now the cap is north of $220 million.

Like Florida’s program, Pennsylvania’s programs are funded by business contributions. The accounts are run by nonprofits, and businesses receive a 75 percent tax credit on the money they contribute, limited to $400,000 total in tax credits.

For example, a corporation with a $10,000 tax bill to the state can pay that amount into a scholarship account – enough to provide EITC scholarships to 10 students – and be left with $2,500 in taxes due.

Since the EITC was launched in 2001, it has granted almost $600 million in tax breaks for contributions to scholarship accounts.

By funding the scholarship programs, businesses know their tax dollars are going directly towards educational purposes, rather than whatever pet projects the politicians in Harrisburg have in mind.

And businesses can also earmark their contributions to certain schools rather than pouring their money into the centralized pot in Harrisburg.

In Ellwood City, for example, eight different businesses contribute to the scholarship fund run by the Pittsburgh diocese with the instructions that the funds are to be used for their local school, according to Sister Joanne.

Tax credit scholarship programs like the EITC and OSTC do not attract the kind of vociferous political opposition that some other school choice options – think “vouchers” in any of the myriad forms – tend to receive.

Part of the reason is that, unlike vouchers, the dollars used for the EITC program are never passing through the public school system in the first place. That unhinges the most common argument against many other school choice funding schemes – that they take dollars directly out of school districts’ budgets and direct them to private or religious institutions.

Teachers’ unions and other opponents of vouchers in Pennsylvania successfully headed off a proposed statewide voucher program in 2011 and again in 2012. But the new OSTC and the expansion of the EITC received bipartisan support in the General Assembly when they were approved last June, a testament to the success of the concept.

Reed compares the tax credit programs and other forms of school choice to fire alarms in schools. Most of the time – hopefully all the time – they are unnecessary. In a good public school system, few parents and kids would leave because that inevitably means more costs for their family.

But when a school is failing some students, the fire alarms become necessary.

“It makes more sense to fund students than to fund schools,” said Reed. “We should be more or less agnostic on the type of school and care more about school quality and what is best for the kids.”

Joan and her husband Daniel are both products of Pennsylvania public schools and say they support public education.

For them, so far removed from the political battlegrounds of the state Capitol where school choice has been a two-decade war of attrition, joining the list of EITC scholarship recipients was simply a matter of giving their daughters the best education possible.

“This is a personal matter for us, and it’s worked out really well,” Joan said.

Contact Boehm at Eric@PAIndependent.com and follow @PAIndependent on Twitter for more.

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Eric is a reporter for Watchdog.org and former bureau chief for Pennsylvania Independent. He lives in Minneapolis, Minnesota, where he enjoys great weather and low taxes while writing about state governments, pensions, labor issues and economic/civil liberty. Previously, he worked for more than three years in Harrisburg, Pennsylvania, covering Pennsylvania state politics and occasionally sneaking across the border to Delaware to buy six-packs of beer. He has also lived (in order of desirability) in Brussels, Belgium, Pennsburg, Pa., Fairfield, Conn., and Rochester, N.Y. His work has appeared in Reason Magazine, National Review Online, The Freeman Magazine, The Philadelphia Inquirer, The Washington Examiner and elsewhere. He received a bachelor's degree from Fairfield University in 2009, but he refuses to hang on his wall until his student loans are fully paid off sometime in the mid-2020s. When he steps away from the computer, he enjoys drinking craft beers in classy bars, cheering for an eclectic mix of favorite sports teams (mostly based in Philadelphia) and traveling to new places.