Fontana Discusses Back-to-School Funding for Students

The time has come again for students to go back to school. Education is a huge aspect of the budget each year and this week I’m going to focus on highlighting what has occurred over the past few months. During these difficult economic times, many schools are struggling to adequately educate students while still maintaining enough funding to buy supplies, as well as meet payroll for the various staff.

Recently, the Pennsylvania Department of Education (PDE) created a list of the “lowest performing schools” in our state by combining the 2011 PSSA’s math and reading scores for all public schools. The list is broken up between elementary and secondary schools and does not include charter, cyber charter or area vocational-technical schools. Overall, 414 public schools in 74 districts represent the lowest-achieving 15 percent of schools across the state with more than 242,000 kids attending these schools. Allegheny County alone has 53 elementary and secondary schools on this list. To see PDE’s complete listing, please go to: http://www.portal.state.pa.us/portal/server.pt/community/school_services_office/9153/p/1202312

In June, the Pennsylvania General Assembly passed a law that increases the Educational Improvement Tax Credit (EITC) program and creates the Educational Opportunity Scholarship Tax Credit (EOSTC). What these programs do is give both low-income and students attending the schools on PDE’s list some options.

How these programs work are that students whose families earn less than a certain annual income will be eligible to apply for scholarships to a public or private school that participates in the program. In return, tax credits are offered as incentives to businesses that donate to these scholarship programs.

Notification letters were sent out to the parents of students who attend Pennsylvania’s lowest performing schools about the EOSTC program in early August.

Specifically:

EITC

    •    This year, the existing EITC program was increased by $25 million, making the total amount of EITC tax credits available to businesses that fund children who get scholarships to other schools totaling $100 million in FY 2012-13.
    •    In the 2012-13 school year, students are eligible to receive a scholarship if their household’s annual income is no greater than $60,000, plus $12,000 for each dependent member of the household. (Example: For a family with four eligible children, their income limit would be $108,000 or less to qualify for the program.)
    •    After June 30, 2013, the maximum household income increases to $75,000 and the income allowance for each additional dependent rises to $15,000. The income allowance will be adjusted after July 1, 2014 based on Consumer Price Index increases.
    •    An average scholarship will be $1,000 per student.
    •    Businesses that pledge money to public and private school scholarships for one year are able to donate up to $300,000 and receive a tax break from the state for up to 75 percent of the donated amount.
    •    The amount a business firm may contribute increases to $400,000 in fiscal year 2013-14, and to $750,000 beginning in fiscal year 2014-15. Businesses may also be eligible to receive a tax cut of 90 percent of the donated amount for committing to an amount for two years.

EOSTC

    •    Beginning in 2012-13, all students residing in the boundaries of a low-achieving school as of the first day of classes of the school year will be eligible for potentially larger scholarships under EOSTC.
    •    $50 million in tax credits will be available for the EOSTC program.
    •    In the 2012-13 school year, students are eligible to receive a scholarship if their household’s annual income is no greater than $60,000, plus $12,000 for each dependent member of the household. (Example: For a family with four eligible children, their income limit would be $108,000 or less to qualify for the program.)
    •    After June 30, 2013, the maximum household income increases to $75,000 and the income allowance for each additional dependent rises to $15,000. The income allowance will be adjusted after July 1, 2014 based on Consumer Price Index increases.
    •    A scholarship cannot exceed $8,500 for regular education students or $15,000 for special education students.

Under the scholarship program, the following applicants receive priority:

    •    Applicant who received a scholarship for the prior school year.
    •    Applicant with household income no greater than 185% of Federal Poverty Index (i.e., eligible for free or reduced-price lunch).
    •    Applicant with household income no greater than 185% of Federal Poverty Index (i.e., eligible for free or reduced-price lunch) who resides within a first-class school district or a district that would immediately be subject to a declaration of financial recovery status.

Students can only use an EITC or EOSTC scholarship at schools who participate in the program. To see what schools are participating in EITC or EOSTC or if you are a school that would like to participate in the program, please go to the following link:  http://www.portal.state.pa.us/portal/server.pt/community/school_services_office/9153/p/1202312

If you are a business that would like more information on how to participate in EOSTC or a parent or student who would like to apply for a scholarship, please go to www.newpa.com/ostc. Tax credits applications will be processed on a first-come, first-served basis. Applicants will be approved until the amount of available tax credits is exhausted.