(The Center Square) – Eliminating a de facto “electricity tax” and boosting funding for school choice programs share space in one legislative proposal handed back to Pennsylvania’s House of Representatives late Thursday afternoon.
Despite an overwhelmingly bipartisan vote in the Senate, the bill’s chances in the narrowly-divided lower chamber aren’t so clear-cut.
But why?
Even with broad support for eliminating the gross receipts tax on electricity bills to the tune of a $500 annual savings per taxpayer, subsidizing tuition and services for students in private religious and special education schools has long troubled the Democratic majority House. House Bill 1667, as amended by the upper chamber on Thursday, asks for $25 million more.
Earlier this week, the lower chamber passed a different proposal, House Bill 2632, that would reorganize how funding is allocated in its two state scholarship tax credit programs, which the Republican majority Senate has deemed an attempt to further restrict students’ access to support. Currently, $680 million in tax credits are awarded to scholarship donors each year, yet more than 70,000 students remain unaided due to funding constraints.
“The EITC program has been a tremendous bipartisan success for well over two decades,” said Senate Majority Leader Joe Pittman, R-Indiana, in a statement to The Center Square. “The action taken by the House yesterday would no doubt take steps backwards from empowering parents and families with the resources to make the best decisions possible on how to meet the unique educational needs of their children.”
EITC is an acronym for the Educational Improvement Tax Credit program. A second program, called the Opportunity Scholarship Tax Credit or OSTC, is also scrutinized in the legislation.
Critics of the programs say taxpayer money is better spent on public schools, where a recent court ruling found the state’s old funding system inequitable. Over the last three years, the state has boosted support to economically struggling districts through a new adequacy formula by roughly $1 billion.
“When hundreds of millions of taxpayer-supported dollars are involved, taxpayers deserve transparency and accountability,” Rep. Tarah Probst, D-Stroudsburg, said of HB2632. “This bill simply allows the public to better understand where the money is going and who is benefiting from it. If these programs are working as intended, that should be clear for everyone to see.”
Earlier this week, the lower chamber also approved its electricity savings proposal, House Bill 2224, which would limit corporately-owned utility companies from raising rates on customers despite plentiful investment returns. Supporters say this could save $1.7 billion and shave 20% off of utility bills.
