April – May 2017

TIME FOR TA XPAYERS— NOT SPECIAL INTERESTS— TO COME FIRST

INSIDE: AFTER OBAMACARE

SCHOOL CHOICE IN THE DEVOS ERA

WHY WE NEED PAYCHECK PROTECTION NOW FEATURES NOTE FROM THE TEAM

3 The Commonwealth Foundation team is growing! Lenny McAllister was After Obamacare appointed director of entrepreneur engagement in western Pennsylvania, and Jeremy Baker joins Commonwealth Foundation as our new senior gov- 4 ernment affairs associate. But that’s not all! New babies and new moms have Time to End Special also delighted the staff in 2017. Interest Loophole

5 End Perks for the DID YOU HEAR? Politically Connected 6 The Pennsylvania House and Senate have been active on several Common- Double-Down on wealth Foundation priorities early this legislative session. The Senate passed Reinventing Government paycheck protection and the House passed school choice expansion already this spring. The Senate and House are both looking to enact substantive 8 pension reform in the next few weeks. Even Gov. Wolf has indicated a willingness to sign the bill this time (after vetoing pension reform in 2015). New Case from the House and Senate committees have each advanced versions of the Taxpayer Protection Act, which would limit the growth of state government spend- Fairness Center ing. Legislation banning ghost teachers has passed out of committee in the Senate and the House Labor Committee is looking to move legislation 10 enhancing the rights of religious objectors to unionism. Choice Is a Win As for the budget? The House GOP recently unveiled their 2017-18 budget, for Students which includes spending restraints, no tax hikes, and a reduction in corporate welfare—an encouraging starting point for negotiations.

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SALARY BENEFITS 2 After Obamacare Repeal Myths vs. Facts

1. MYTH: ONE MILLION AMERICANS WILL for physician services. LOSE THEIR INSURANCE IF THE AFFORD- The Health Care Cost Containment Council found an ABLE CARE ACT (ACA) IS REPEALED. 8.6 percent decline of general acute-care hospital un- compensated care in 2015 compared to 2014. Yet, more FACT: MANY OF THESE PENNSYLVANIANS hospitals reported negative operating margins. Between WERE COVERED BEFORE THE ACA. 2012 and 2014, 34 hospitals realized average losses, but from 2013 to 2015, 46 hospitals realized losses. This myth erroneously assumes everyone purchasing insurance on the exchange or enrolled in Medicaid Reducing the cost of uncompensated care will lose all access to insurance. U.S. Census data through more taxpayer subsidies is a payment shows the number of uninsured Pennsyl- shift that will ultimately leave local econo- vanians declined by 469,000 residents mies weaker. from 2010 to 2015. This gap implies many Pennsylvanians on the ex- change or in Medicaid were 3. MYTH: REPEAL WILL insured before the ACA. In COST 137,000 JOBS fact, the state reports almost BY 2019 AND REDUCE 16 percent of newly eligible THE STATE GDP BY $76 Medicaid expansion enrollees BILLION. were previously enrolled in another type of health insurance. FACT: THESE FORE- CASTS ARE BASED ON It’s also important to note that the state shifted 73,000 DEBUNKED MODELS individuals already enrolled in Medicaid to the expan- sion Medicaid population. This was done entirely as an THAT ASSUME GOVERN- accounting gimmick to ensure the federal government MENT SPENDING CREATES JOBS. COMPENSATION COSTS PER STATE EMPLOYEE would pick up a larger portion of Medicaid costs. The job loss estimate comes from the Commonwealth Fund, which wrongly assumes any ACA alternative will K 2. MYTH: HOSPITALS WILL LOSE $1.6 BIL- eliminate all insurance subsidies. K LION IN REVENUES, LEADING TO POSSI- K BLE CLOSURES. In reality, Pennsylvania lost jobs due to the ACA’s man- K dates and taxes. The American Action Forum estimates K FACT: THE ACA DID NOT IMPROVE HOS- Pennsylvania lost 15,680 small business jobs due to the law in 2015. Statewide unemployment remained above K PITALS’ LONG-TERM SUSTAINABILITY. the national average throughout last year. In fact, we ex- K Hospitals are struggling because the cost of medical perienced the second largest increase in unemployment K care is rising. Focusing on redistribution schemes rather in 2016. K than driving down the cost of care is no solution. The K Department of Human Services (DHS) states health On the other hand, the ACA failed to live up to econom- ic projections. According to DHS, Medicaid expansion  care providers received more than $1.8 billion dollars in created 15,500 jobs in 2015, but a 2013 RAND study esti-     payments for serving newly eligible Medicaid expansion mated expansion would create about 37,500 jobs in 2015.     enrollees. However, these payments aren’t covering the full cost of the care. Medicaid pays on average 61 percent SALARY BENEFITS 3 TIME TO END SPECIAL INTEREST LOOPHOLE By Jessica Barnett, Policy Analyst

Public resources and political activity are like oil and water—they PAC contributions, however, capture only a portion of tax- don’t mix. payer-aided government union political spending. Since 2007, government union leaders spent an additional $55 million on That’s what we’re told, but the truth might surprise you. politics from a portion of union members’ dues explicitly dedicat- Because of a legal carveout for special interests, Pennsylvania ed to “political activities and lobbying.” These union dues fund TV has been mixing public resources and politics for years. But that and radio ads, lobbying outlays, PAC solicitations, donations to carveout could soon end. SuperPACs, and political communication with members.

It has long been illegal for elected officials to mix political business For example, Pennsylvania State Education Association (PSEA) and the people’s business. Even sending a costless fundraising members’ dues fund the union’s magazine, The Voice. The email from a state-owned computer will land any elected official in magazine regularly endorses politicians, including Katie McGinty, hot water. Barack Obama, and Hillary Clinton, and calls on members to lobby against policies like pension reform. Who can forget former Supreme Court Justice Joan Orie Melvin and former House Speaker John Perzel, both of whom violated The United Food & Commercial Workers union, which represents the bright line between politics and public resources? They went liquor store clerks, infamously spent more than $1 million on TV to jail for essentially forcing taxpayers to help them maintain polit- and radio ads opposing liquor privatization—a highly popular ical power. The downfall of such high-profile politicians shows that reform that has the backing of most union households. Union subverting public resources for political gain will not be tolerated. members, as well as taxpayers, were forced to help promote this political activity, even if they ideologically disagree. Except when it is. All told, government unions have spent an astonishing $96 million Pennsylvania government regularly collects and distributes tens of on politics over the past decade, collected with taxpayers’ aid. millions of dollars earmarked for politics on behalf of one special Clearly, public resources and politics are, indeed, mixing. interest group: government union leaders. Not coincidentally, these leaders also happen to be one of the state’s biggest political Paycheck protection would fix this ethical blind spot. spenders. In February, the state Senate passed SB166, which prohibits using This political money, both union dues earmarked for political public resources to collect money earmarked for politics. Under activity and political action committee (PAC) contributions, is the bill, government union leaders would still be able to collect deducted from workers’ paychecks—just like taxes—then forward- money and spend it on politics; they would just do it like everyone ed to government unions and their political organizations. else—without government help.

In turn, union leaders have used PACs to give more than $40 Polling shows two-thirds of Pennsylvania registered voters support million directly to political candidates in the last ten years. In the paycheck protection, and 80 percent of union households agree 2016 election alone, they donated over $400,000 to successful that taxpayer resources should not be used to collect campaign Democratic candidates for State Treasurer, Attorney Gener- contributions. al, and Auditor General; in 2015, they directed $340,000 to With the support of the public and the Senate, state House mem- Democratic judicial candidates; and in 2014, $3.4 million went to bers must now take the next step by passing this bill and sending Governor Wolf’s campaign. it to the governor. If Wolf is serious about improving ethics in A comparison of government union spending with that of the Harrisburg and reforming state government, he will sign it. natural gas industry—often criticized for its heavy influence in Public resources and politics were never meant to mix. It’s time to Harrisburg—offers some crucial perspective. The eight largest close this legal loophole, once and for all. natural gas PACs spent $1.1 million during the 2016 Pennsylvania elections. The top eight government union PACs spent more than six times that amount—$7.1 million.

4 4 END PERKS FOR THE POLITICALLY CONNECTED By Bob Dick, Senior Policy Analyst

The saying, “Third time’s the charm,” may need revising. Scranton RACP isn’t the only example. Commonwealth Foundation has is now on its fifth economic recovery plan and charmed hardly identified more than $800 million in corporate welfare in this year’s describes the results. For decades, Scranton residents have been state budget. promised solutions to the city’s long-standing economic struggles, but job growth and fiscal stability remain elusive. One of the biggest winners is the horse racing industry, receiving about $250 million each year from the Race Horse Development One of the most damaging of those false promises is govern- Fund. A big chunk of this funds prize money, nearly 30 percent ment-driven “economic development” known as corporate of which is spent outside of Pennsylvania. You can bet the house welfare. These government subsidies to businesses via loans, most Scranton residents have not benefitted from this spending. grants, and tax credits unfairly benefit the politically connected and simply don’t work. Scranton is a prime example. What’s more, a 2016 Pennsylvania Gaming Control Board report found attendance and wagering on horse racing dropped since In the 1990s, Scranton spent hundreds of millions of tax dollars 2011. Despite the perks, the industry is losing ground. on county roads, museums, a stadium, a shopping mall, and an industrial park. Yet, the projects “largely failed” to revitalize the Horse racing isn’t alone—Pennsylvania has given Fortune 500 city, according to a study by the Mercatus Center at George companies like Aramark and Amazon millions in tax dollars while Mason University. taxing small business owners out of existence.

Pennsylvania’s story is similar. Since 2007, our state has led the Lower-profile companies have also won taxpayer-funded subsidies nation in corporate welfare spending at a staggering $6 billion, at the expense of hard-working Pennsylvanians. Aquion Energy outspending its nearest competitor by nearly $2 billion. Yet, these recently filed for Chapter 11 bankruptcy, but not before receiving massive handouts to special interests have failed to boost eco- nearly $19 million in taxpayer subsidies. Remarkably, the Depart- nomic growth. ment of Community and Economic Development promised to recoup the funds and use them again for “reinvestment” in From 2005-2015, the commonwealth underperformed in key Pennsylvania’s economy. economic indicators, ranking 35th in job growth, 31st in personal income growth, and 38th in population growth. In fact, the ten With its history of failure, why is corporate welfare so prevalent? In states spending the most on corporate welfare from 2007-2015— short, optics. Headlines and ribbon cutting ceremonies give the Pennsylvania first among them—saw less job growth than the ten appearance of growth. But this artificial economic development lowest spenders. concentrates power, promotes cronyism, and siphons money from working people across the state. When government officials Here’s why. Normally, businesses make decisions based on what divert dollars to their preferred economic projects, the net result is consumers want. But when government subsidies are on the table, stagnation, not growth. businesses start competing for politicians’ or government bureau- crats’ priorities. Thankfully, there’s a better solution. Pennsylvania has one of the highest business tax rates in the industrialized world. Instead of Success is determined by who lobbies better, not by who makes giving tax breaks and subsidies to select businesses, lawmakers the best product at an affordable price. The result? A few busi- should cut corporate welfare and use the savings to reduce tax nesses “win” at their competitors’ expense, and taxpayers suffer. rates for all businesses. This will attract investment, create jobs, and help reverse the trend of Pennsylvanians fleeing the state for Consider Pennsylvania’s Redevelopment Assistance Capital job prospects elsewhere. Program (RACP). This program gives an unfair advantage to large cities and awards grants disproportionately to businesses in Pennsylvanians deserve better than a system that favors the Pittsburgh and Philadelphia. Scranton workers, meanwhile, are left politically connected. Creating an environment where people can to pay the tab. advance based on merit, not lobbying prowess, is a recovery plan that will put cities like Scranton back on the path toward growth and opportunity for all.

5 DOUBLE-DOWN ON REINVENTING GOVERNMENT By Nathan Benefield, Vice President & COO

The following op-ed has appeared in 18 different publications The Senate is considering a bill that will contain a 401(k) across Pennsylvania. component paired with a smaller defined benefit compo- nent for new employees. New employees can also choose Imagine if Stephen King had written Green Eggs and Ham. a single 401(k)-style plan, which will provide portability and What if Dr. Seuss had penned The Shining? retirement control.

Gov. Wolf’s third budget address was an equally disori- Additionally, this proposal allows current employees to enting shift in tone and substance—almost as if the most opt-in to the hybrid plan or 401(k)-only plan—a welcome liberal governor in the country were polishing his conser- improvement over last year’s proposal. vative credentials. The side-by-side hybrid is not perfect, but it satisfies three Record-setting income and sales tax increases? Gone. Parti- important goals. It shifts future financial risk away from tax- san rhetoric? Mollified. Massive spending hikes? Absent. payers; it enhances choice and portability for new state and Instead, Wolf targeted bureaucratic waste to close the public school employees; and it slows the accumulation of ever-widening budget deficit, including consolidating taxpayer-backed pension debt. To be clear, pension reform agencies, reforming corrections programs, and streamlining won’t reduce the existing unfunded liability taxpayers owe or government services. Laudably, he proposed reducing cor- offer immediate savings. But moving to a defined contribu- porate welfare subsidies for politically-connected businesses tion plan—which, by definition, carries no debt—would take which have failed to encourage long-term job growth. politics out of pensions and help prevent a repeat of the current pension crisis. But Wolf hasn’t completely broken from the past—he still wants $1 billion in new taxes, amounting to $315 per family Pension reform is not just good policy. It’s also popular. A of four. But the fact is, there’s no reason to demand more poll conducted last October showed 54 percent of voters from taxpayers. support placing new state employees in a 401(k)-style retirement plan, including 67 percent of Republicans, 51 per- Instead, the General Assembly should take this opportu- cent of Independents, and a plurality of Democrats. nity to double-down on Wolf’s reform mindset—but do it without tax hikes. Here are three ways to help end the cycle Lawmakers can’t afford to delay. Pennsylvania’s unfunded of budget deficits for years to come. pension liability is almost double the General Fund budget. And it keeps growing. In fact, SERS just announced a 6.5 PENSION REFORM percent investment return for 2016, a full percentage point short of their assumptions—meaning our pension liability State public pensions are more than $60 billion in debt—about will continue to rise and taxpayers will continue to pay more. $5,000 for every Pennsylvania man, woman, and child. FULL LIQUOR PRIVATIZATION But for ten years, government union leaders have denied the pension crisis and argued against reform. Meanwhile, On a recent trip to Giant, I witnessed a couple excited to state taxes and property taxes have ballooned to fund the finally buy wine with their groceries—a result of last year’s ever-growing pension burden. School districts have laid marginal liquor reform. But excitement turned to frustration off teachers and cut programs—even as education funding as they ping-ponged across the store, barred from buying reached record high levels—as more education dollars are wine at the regular checkout and unable to buy groceries at consumed by pension costs.

6 the wine register. Pennsylvania’s government liquor monop- making the program unsustainable. oly and archaic alcohol laws still make no sense. With talk in Washington, D.C., of block granting Medicaid Indeed, grocery stores can buy wine only from the govern- to the states, lawmakers have a new opportunity to reinvent ment wholesale monopoly, in which a handful of bureau- Medicaid for truly those who need it. crats determine what can and can’t be sold across the state. Florida, for example, improved the quality of Medicaid Full liquor privatization, both retail and wholesale, could through a waiver that emphasized choice counseling, saving deliver Pennsylvanians the convenience they want and gen- $161 million annually in the first five years. erate between $1.1 to $1.6 billion in immediate revenue. Other states have requested more robust Health Savings REINVENT MEDICAID Accounts to ease the transition from Medicaid to private health insurance. Work requirements—which in other Let’s face it: Medicaid doesn’t provide quality health programs have helped individuals transition out of poverty care. Medicaid recipients experience more difficulty into the workforce—and sliding scale premiums are other finding doctors and longer wait times than those with worthwhile policy solutions that would concentrate resourc- private insurance, thanks to low provider reimbursement es on individuals most in need. and a maze of red tape. A one-year budget absent major reforms will simply kick the Yet, more than one-third of Pennsylvania’s total operat- budget-deficit can down the road. Lawmakers should view ing budget goes to Medicaid programs, to the tune of Gov. Wolf’s proposal not as a final product but as a starting $26.9 billion. That’s more than PreK-12 education, higher point they can improve upon with reforms that will benefit education, transportation, and debt service combined. all Pennsylvanians. These costs are rising faster than the state economy,

APRIL  MILLION

MARCH . MILLION DEFICIT WATCH

FEBRUARY . MILLION $679 million For the fifth consecutive month, state tax collections came in below estimates. Pennsylvania could end the JANUARY fiscal year with a deficit exceeding $800 million.  MILLION

DECEMBER . MILLION 7 NEW CASE FROM THE FAIRNESS CENTER: HARTNETT, ET AL. V. PENNSYLVANIA STATE EDUCATION ASSOCIATION, ET AL.

This press release from the Fairness Center was circulated “Teaching is my calling, but I fundamentally disagree January 18, 2017. with many teachers’ union stances on personnel and political issues,” said Greg Hartnett, an art teacher and Pay up, or you’re fired. That’s the ultimatum union father of five. “Even though union leaders violate my leaders can legally level at teachers across the beliefs, I must either give them a cut of my paycheck or commonwealth—even teachers who opt out of union lose my job. That’s coercion. That’s immoral. I hope this membership. Now, a group of four Pennsylvania lawsuit helps the court recognize it’s also unconstitutional.” public schoolteachers is standing up to this work- place bullying by filing a lawsuit designed to reach Hartnett and his fellow teachers are not alone: 62 per- the U.S. Supreme Court. cent of teachers don’t support compulsory union fees, according to a 2015 Education Next poll. Represented by the Fairness Center and National Right to Work Foundation-provided staff attorneys, Last year, the U.S. Supreme Court deadlocked 4-4 Greg Hartnett of Homer-Center School District, Eliz- in Friedrichs v. California Teachers Association, a case abeth Galaska of Twin Valley School District, and Rob which also sought to end compulsory union fees for Brough and John Cress of Ellwood City Area School teachers. The divided court’s tie effectively al- District are suing the Pennsylvania State Education As- lowed union policies forcing teachers in Pennsyl- sociation to end compulsory union fees as a condition vania and many other states to pay unions as a of public sector employment. condition of employment. “Teachers should not have to give up their constitutional rights to teach our kids,” commented Nathan McGrath, vice president and chief litigation counsel for the Fairness Center. “This lawsuit is designed to clearly and cleanly address the core issue that was left undecided in the Friedrichs case. We intend to provide the Supreme Court with another op- portunity to end more than 40 years of union coercion.” “My choices have been taken away by a legal system stacked in favor of unions and against individual teachers,” added Hartnett. “If I’m trusted to teach the next

Greg Hartnett. Image courtesy of the Fairness Center.

8 generation, I should be trusted to make my own deci- sions with my own money. That’s just common sense.” ‘Ghost Rebecca Friedrichs, lead plaintiff in Friedrichs v. CTA, released the following statement in support of the Teacher’ Ban lawsuit: Passes Senate School employees in Pennsylvania and through- out the country should be freed from forced Committee support of government unions. Hundreds of thousands of educators are trapped in the In late March, the Senate Education Committee passed SB government unions’ culture of fear, which has 494 banning “ghost teachers” who drain resources from public silenced educators and brought great harm to schools to work full-time for teachers’ unions. our noble profession and the dear children we A Commonwealth Foundation analysis of Pennsylvania’s 500 serve. I’m so proud of these four courageous school district contracts reveals up to 198 district employees teachers for having the guts to shine the light of may work full-time for the teachers’ union while remaining on truth on a dark situation in our schools. public payroll. In more than 70 percent of Pennsylvania’s 500 school These ghost teachers are teachers in name only; many haven’t districts, public schoolteachers who opt out of union taught in decades and will never return to the classroom. In membership are still required to pay “agency fees” to some cases, ghost teachers receive taxpayer-funded salaries, gain seniority, and accrue pension and health benefits while the local, state, and national teachers’ unions to cover working for a private organization. This practice is sometimes collective bargaining costs. The amount is signif- called “release time” or “union release.” icant: PSEA’s nonmember fees in 2016-2017 are only 26 percent less than full membership dues. Nearly 25 percent of school districts—111 of 500—authorize ghost teachers in their collective bargaining agreements. The PSEA can charge nonmember fees because of a First Amendment “compromise” struck 40 years ago This is a blatant misuse of resources meant to educate chil- by the Supreme Court in Abood v. Detroit Board of dren. The full Senate should act on this legislation to ensure Education. But Abood’s premise—that collective bar- every public education dollar is benefitting students, not special interests. gaining can be separated from politics—is fundamen- tally flawed. Every dollar devoted to government SB 494 would ban full-time union release in all school districts, union collective bargaining agreements is a dollar allowing up to 30 days of leave for administrative duties in any that cannot go to infrastructure, public safety, fire one year. protection, community maintenance, or tax relief. Fast Facts: Therefore, public sector union collective bargaining is inherently political. • 111 of Pennsylvania’s 500 school districts—or 22 percent— authorize ghost teachers in their teacher contracts. Forcing teachers against their will to fund unions and political collective bargaining violates teachers’ con- • Philadelphia School District allows up to 63 employees stitutional rights of free speech and free association. to work for the union full-time. Teachers and other public employees should not have to • Pa. taxpayers owe $1 million for Philadelphia ghost pay for activity and representation they do not support. teachers’ pensions since 1999.

For more information, visit fairnesscenter.org • Allentown taxpayers have paid ghost teachers $1.3 million since 2000 without reimbursement.

Learn more at commonwealthfoundation.org/ghost

9 CHOICE IS A WIN FOR STUDENTS By James Paul, Senior Policy Analyst

What child hasn’t heard the story of Chicken Little? save money. His encounter with a falling acorn leads him mistakenly to conclude the sky is falling. Mass hysteria ensues For proof, look no further than Pennsylvania’s highly when his friends buy in to his doom-saying. Unfortu- popular Educational Improvement Tax Credit (EITC) nately, misguided panic isn’t confined to fairy tales. and Opportunity Scholarship Tax Credit (OSTC) programs, which allow businesses to direct a portion In the aftermath of Betsy DeVos’s confirmation as of their tax liability to fund scholarships to families Secretary of Education, opponents predict she could dissatisfied with their assigned public school. Since decimate public education. DeVos is a well-known 2001, more than 500,000 such scholarships have school choice advocate who believes in empowering been awarded. parents and students with options. Unfortunately, critics view this not as a step forward but as a disaster. The results? Of 18 studies of educational choice schol- arship programs nationwide, 14 found they improved Their perspective is misguided, unsupported by academic performance. facts, and ultimately harmful for the future of American education. Beyond the studies, the students are the real evidence. At St. Francis de Sales School in West Philadelphia, But here’s one thing DeVos’s supporters and de- for example, students are excited to learn, and their tractors agree on: every student deserves access academic achievements are inspiring—despite the to a quality education. The goal is not in question, obstacles they face. Of 500 students at St. Francis, only the means. 74 percent are low-income, and many are immigrants, hailing from 45 countries. Some believe traditional public schools assigned to students based on their ZIP code can meet every student’s individ- ual needs—every time, in every town in America, in every situation. Advocates of choice, though, believe traditional public schools work well for some students, but public charter schools, private schools, cyber schools, home schools, or some combination of these work best for others. And propo- nents of choice have the evidence on their side. Indeed, when educational options in- crease, students perform better, tradition- al public schools improve, and taxpayers

10 Tuition runs only $3,700, with a total cost per student of Lawmakers should also explore Education Savings Ac- $4,800. Even so, most students at St. Francis would be counts (ESAs)—a path-breaking program that provides unable to afford tuition if not for the EITC and OSTC flexible funding to parents to customize their child’s programs. education. Under this policy, funds earmarked for a child’s K-12 education are deposited into an account Traditional public schools also benefit from educational controlled by parents and supervised by the state. options. Of 33 studies of the impact of school choice scholarship programs on public schools, 31 found public These funds may be spent on a variety of educational schools actually improve as a result of choice. In Phila- services, including but not limited to private school delphia, for example, traditional schools are exploring tuition, tutoring, online programs, and even programs ways to improve their offerings to compete with public offered by local school districts. ESAs have been charter schools. enacted in five states so far, with legislation introduced or pending in many others—including the Pennsylvania What’s more, school choice makes fiscal sense. EITC State House. and OSTC scholarships are roughly $2,000 per stu- dent. Meanwhile, school district funding per student is When it comes to children’s futures, we must progress nearly $16,000 on average. As a result, the EITC alone beyond the mindset that the public education system saved Pennsylvania taxpayers more than $1 billion from exists to prop up buildings or bureaucrats. 2002 to 2014, according to a recent audit by EdChoice. Instead, we must put children first. As DeVos has said, Far from fearing choice, we should expand edu- “Let the education dollars follow each child, instead of cational options for all Pennsylvania students. The forcing the child to follow the dollars.” Too many stu- thousands on waitlists for charter schools already dents in our great state are forced to follow the dollars. show demand is there. That’s why HB 250, spon- sored by House Speaker Mike Turzai, seeks to With DeVos’s confirmation, students and parents in increase EITC and OSTC contribution caps so even Pennsylvania and across the nation can have renewed more students benefit. hope that the education policies coming from Wash- ington, D.C., will ensure our education system serves students, not the reverse.

House Expands Popular Tax Credit Scholarship Programs

On March 13, the Pennsylvania House voted to extend Tax credit scholarship programs are a lifeline for chil- the state’s popular tax credit scholarship programs dren whose ZIP codes relegate them to underperform- to thousands more students. HB 250, sponsored by ing schools. We applaud the House and Speaker Turzai House Speaker Mike Turzai, expands the Educational for acting to give thousands more students access to Improvement Tax Credit (EITC) by $50 million and educational options that best meet their unique needs. the Opportunity Scholarship Tax Credit (OSTC) by $25 million—a combined 43 percent increase. Tax credit scholarship programs allow businesses to fund scholarships in exchange for a partial tax credit. Together, these programs enabled more than Students can use these scholarships to attend a private 50,000 students to attend the schools of their school suited to their needs. More than 500,000 schol- choice in 2014-15. arships have been distributed since 2001.

11 Commonwealth Foundation P.O. Box 825 1675 Camp Hill Bypass Camp Hill, PA 17011

A PUBLICATION OF THE COMMONWEALTH FOUNDATION PENNSYLVANIA’S FREE-MARKET THINK TANK

CF IN THE NEWS

Philadelphia’s mistake should serve Because as a stinging reminder that Tax of the special political tax hikes—no matter how credit scholarship privilege ... Pennsylvanians seemingly inconsequential or programs are a lifeline are forced to act as the justifiable—can hurt many of for children whose ZIP collection agency for the people who can least codes relegate them to union leaders’ political afford to pay. underperforming activities. schools.

Bob Dick, Pittsburgh Tribune- Bob Dick and Elizabeth James Paul, Philadelphia Review, March 20, 2017 Stelle, Tyler (Texas) Tribune, March 19, 2017 Morning Telegraph, March 12, 2017

Commonwealthfoundation.org | [email protected]