The Opportunity Scholarship and Educational Improvement Tax Credit Act

A message from school choice advocates

Quick Terms… School Vouchers or Opportunity Scholarships provide financial assistance to families so they can choose the schools that work best for their children. Educational Improvement Tax Credit (EITC) Program Qualified organizations provide kids in need with scholarships to attend the school of their choice Companies make tax-deductible contributions to qualified non-profit scholarship organizations or educational improvement organizations

Senate Bill 1 would… Create a voucher system allowing low and middle income families to choose a school that fits their child’s needs. Expand the EITC program so middle income families can also continue reap the benefits of school choice.

Available to families below the 130% federal poverty level ($28,665 for a family of four). 100% of state subsidy will follow the child to the school of his or her choice. Average Opportunity Scholarship state-wide will be $5,000+. Public to public – strictly optional  Receiving districts decide whether to accept students and how many. (AMENDMENT would provide that acceptance on a lottery basis) Overview – Opportunity Scholarships

Public to Non-public Highlights Optional for schools to participate. Must disclose certain policies upon request to include: tuition, admissions, academic offerings and requirements, discipline, religious instruction, parent involvement, and extracurricular activities. Cannot discriminate on basis of race, academic aptitude, athletics, status as handicapped person and must be in compliance with laws as of enactment. Constitutional under federal and state case law because the parent has a choice where to exercise the scholarship.

Phase-In of Scholarships YEAR 1  Students in the bottom 5% of lowest performing public schools are eligible (144 schools). YEAR 2  All students living within attendance boundaries of the 144 schools are eligible. YEAR 3  All low-income students meeting income guidelines. YEAR 4  Creation of a middle-income voucher program for families making up to $67,000 a year.

The cost… $0 for kids currently attending a public school because their scholarships are funded with money that’s already being spent. Scholarships for low-income kids not living in the attendance boundary of a school in the bottom 5% are capped at 3% of prior year’s basic education funding (currently- approximately $163 million).

Accountability Accountability: all participating schools must administer one of a menu of nationally recognized achievement tests. The PSSA will be one of those options.

Current average EITC scholarship recipient’s income = $29,000. EITC Eligibility under SB1:  Beginning July 1, 2011, base income increases to $60,000 with $12,000/child added to base income ($84,000 for family of four).  In Year Four ( ), overall EITC credit is increased by 5% annually. With implementation of Year Three scholarships, EITC funds will be freed up substantially for middle-class EITC recipients. Educational Improvement Tax Credit Program (EITC) Included in SB1 to create a complete school choice program for low-income and middle-income families:

o Beginning in Year Four, the program would be expanded by using 50% of the Excess Tuition Fund* to provide school choice demonstration grants and middle income scholarships. o The other 50% of the funds will still be used to pay costs of low-income scholarships. * The Excess Tuition Fund is the difference between the opportunity scholarship provided and the actual tuition. NEW – Public School Choice Demonstration Grants & Middle Income Scholarships

EXCESS TUITION FUND (FUNDED BY DIFFERENCE OF VOUCHER AMOUNT AND ACTUAL TUITION) BEGINNING IN YEAR 4 ( ): 50% OF THE FUNDS WOULD BE UTILIZED AS FOLLOWS: July1 – July 15 --> 50% reserved for school districts to utilize as PUBLIC SCHOOL CHOICE DEMONSTRATION GRANTS to assist with the Optional Tuition Grant Program currently available in SB 1. 50% of the fund (plus whatever is not utilized after July 15 th for the Public School Choice Demonstration Grants) would be available for MIDDLE-INCOME * SCHOLARSHIPS on a pro-rata basis. *Middle-Income is defined as above 130 to 300% of federal poverty ($67,050). Applicants would be required to apply for grants on an annual basis.

A Bipartisan, Responsible, Affordable & Targeted School Choice Plan for Pennsylvania