top of page

Transparency & Accountability: the reasonable cost of accepting tax credit scholarship dollars


In his State of the Union address, the President made false claims about a Philadelphia, PA student being "trapped in failing government schools" to promote his agenda to increase tax credit scholarships for students attending private schools. In response, Betsy DeVos offered to personally pay for the student's scholarship to attend a private school. A scholarship gifted from one individual to another, however, is not a Pennsylvania tax credit scholarship or a federal tax credit scholarship; it is just a gift. Nothing prevents individuals or businesses from giving to others, including to scholarship organizations or private schools.


Pennsylvania has one of the largest state education tax credit programs in the nation. In 2019, PA lawmakers wanted to expand the program by over $100,000,000, and Senator Pat Toomey made the unsubstantiated claim that additional tax credits are needed because 40,000 students are on a waitlist for tax credit scholarships in Pennsylvania.


The problem with this claim is that Pennsylvania doesn't collect or maintain any information about applicants for tax credit scholarships. The Department of Community and Economic Development (DCED) that runs Pennsylvania's Educational Improvement Tax Credit program does not collect the information. The Scholarship Organizations and Opportunity Scholarship Organizations might have this information for their own applicants. Attempts to verify Toomey's figure went unanswered.


This ability to make unsubstantiated claims and hide the facts lies at the core of the problem with tax credit scholarship programs. In Pennsylvania, tax credits divert money from public use to private use. Tax credits for scholarships divert over $200,000,000 per year from the state treasury and put it in the hands of nonprofits, private schools and students attending private schools with extremely limited transparency. The state doesn't have an accurate count of applicants or even a complete list of the schools where scholarship recipients are enrolled.


Due to their status as non-public, private schools enjoy many benefits including being exempt from many education-related laws. Private schools don't have to produce the same testing and reporting information that enables the public to easily compare schools based on student achievement. Private schools can choose which students to admit (or not) and which students receive a tax credit scholarship (or not) using any criteria - even criteria that discriminate based on religion or personal characteristics like gender, gender identity, and sexual orientation. Private schools are not bound by the same Right to Know/Open Records requirements, allowing them to hide information about their receipts and expenditures from public view, including information about the money they receive through the PA Educational Improvement Tax Credit scholarship program. This ability to lawfully not disclose financial and other information would extend to the federal Education Freedom Scholarships and Opportunity Act endorsed by Senator Toomey.


These benefits are extended to private schools; but as soon as public money flows into private schools, the public has a right to transparency and accountability. If legislators or the President want to make claims about the number of students on a tax credit wait list, the public should be able to verify that number. On the other hand, if Betsy DeVos wants to personally pay for students to attend private school without any government tax incentive, the personal transaction between her and the recipient is a private matter. The distinction is in the use or diversion of public tax dollars, even when diverted prior to collection by the treasury. Where public funds go, so go public accountability and the right to transparency. This accountability and transparency are essential to a high functioning, equitable democracy.




22 views0 comments
bottom of page