In the Cradle of Liberty, Ed Freedom Should Be the Default

This summer, Philadelphia is celebrating its role as the birthplace of America. Tourists from around the world are descending on Independence Hall, where 250 years ago a group of colonists declared that governments exist to secure the rights of the people, not the other way around. It’s a fitting moment to ask whether Pennsylvania is living up to that promise.

Pennsylvania’s Educational Improvement (EITC) and Opportunity Scholarship (OSTC) tax credit programs allow businesses and individuals to receive credits against their state income taxes when they donate to organizations that provide scholarships for students. EITC was one of the first tax credit scholarships in the nation—and, let’s face it, our commonwealth is rarely at the forefront of innovative ideas anymore.

Now, a majority of lawmakers in the Pennsylvania House—every Democrat and three Republicans — voted for a bill that would kill both programs and replace them with a new program that would be more burdensome for schools. While states across the country are increasingly embracing educational freedom and parental choice, some Pennsylvania lawmakers want to go in the opposite direction.

In 2023–24, more than 100,000 K-12 scholarships were awarded through EITC and OSTC, but families submitted more than 170,000 applications that year. This means that around 70,000 scholarship applications were turned away. In other words, these are popular with Pennsylvania families.  

EITC and OSTC scholarships are targeted at lower- and middle-income families trying to give their kids a shot at a better education. For example, the median income of Philly families receiving tax credit scholarships through the Archdiocese of Philadelphia is $63,000, well below median family income in Philadelphia ($75,000) and Pennsylvania ($101,000).

It’s also worth noting that the average scholarship was less than $3,000 in 2023-24. Meanwhile, Pennsylvania public schools received an average of $23,000 per student that year, and Philly schools received nearly $25,000. Imagine how many kids could be helped if the program grew with demand so all applications were accepted and the average scholarship was more in line with the cost of education.

Then there’s what the proposal calls the “Accountability for Diverted Tax Dollars Restricted Account,” a name that shows the sponsors’ true colors. Tax credits aren’t “diverted dollars.” The state isn’t cutting a check; it’s allowing people to direct a portion of their own tax liability toward children’s education. Businesses and individuals choose how much to give, to whom, and when. Calling that a “diversion” assumes every potential tax dollar rightfully belongs to the government. The founders must be rolling over in their graves.

Participating private schools would face new mandates if the bill were enacted. Rather than helping students, history shows that increasing the cost of participating in scholarship programs tends push high-quality schools, small schools, and newer schools out of the program, thus limiting options for families.

It’s not as if public schools have a great track record of meeting kids’ needs. Fewer than 20% of Philadelphia school district students scored proficient or better in math or reading on the latest Nation’s Report Card, well below the average nationwide, statewide, and in other large U.S. cities. It’s a number that should cast a long, dark shadow over the district’s much touted four-year graduation rate. In the city that championed the idea that all men are created equal, too many kids are being handed an unequal start.

This is why our tax credit scholarship programs are so important—and why this proposal to drastically change them deserves scrutiny.

EITC and OSTC work because they’re built around a simple idea: parents know what their kids need better than government bureaucrats do. A scholarship follows a child to a school his or her parents choose. The school succeeds or fails based on whether families keep showing up. That accountability is direct and immediate — and much more effective than government mandates.

Philadelphia is the centerpiece of America’s 250th anniversary celebrations because it’s where American independence was announced to the world, predicated on our unalienable rights of life, liberty, and the pursuit of happiness. The families using Pennsylvania’s scholarship programs are embracing one of the most important liberties: that of choosing the environment where their children’s formative years are spent.

The least lawmakers can do is not make that harder.

Colleen Hroncich is a policy analyst at the Cato Institute’s Center for Educational Freedom.