EITC faces steep cuts as state budget nears completion
The 14 tax credit programs in Pennsylvania, including one that supports Pittsburgh’s Jewish day schools and religious schools, could lose as much as $40 million under some budget proposals being considered in Harrisburg by the General Assembly and Gov. Ed Rendell.
The Pennsylvania Educational Improvement Tax Credit, which offers tax credits to companies that support education programs, could be cut by as much as $20 million in the still unfinished 2009-2010 budget, according to one source close to the program.
The previous budget funded the EITC at $75 million.
The threat of EITC cuts, however great or small, was enough to prompt Yeshiva Schools to e-mail its supporters on Tuesday asking them to contact local representative about the issue.
“This morning we were alerted that there are further cuts (Yeshiva’s emphasis) on the table relative to the EITC program,” the e-mail read. “Please contact the members below ASAP … with the following message: ‘We are writing/calling today to urgently request that you preserve the Pennsylvania Educational Improvement Program. It is only through the EITC program that we are able to sustain our three community day schools, which educate more than 800 children in Allegheny County. Please do everything you can to fund this worthwhile program.’”
State Rep. Dan Frankel, D-Squirrel Hill, declined to speculate on the size of the cut proposed for the EITC, calling the situation “fluid,” but did say some kind of reduction to the tax credit programs is inevitable.
“The discussion I’ve heard, there is a 20-30 percent cut in those line items,” Frankel said. “Whether every credit gets the same haircut or is treated differently, I don’t know. I can tell you that I and a group of my colleagues have been trying to mitigate the cuts to the EITC program.”
Created in 2001, the EITC let certified businesses in Pennsylvania make donations to a school’s EITC-registered scholarship fund in return for credits against their state taxes.
In its current format, the EITC program credits a business for 75 percent of the amount of its donation. If the business extends its donation to a second year, that credit jumps to 90 percent.
Rabbi Yisroel Rosenfeld, dean of Yeshiva Schools, said he decided to send out the e-mail blast after hearing increasingly dire reports about the future of the EITC.
“It’s sort of been on and off, on and off,” Rosenfeld said. “The first budget proposed had no or minimal cuts in the EITC. What we have heard the last couple of days is there are substantial cuts being proposed by the governor.”
Rosenfeld said significant cuts to the program would be “devastating” for the area’s Jewish day schools. Yeshiva Schools, Hillel Academy and Community Day School all benefit from the EITC program.
“Considering the economy and lack of resources available to the community,” Rosenfeld said, “it’s become something that schools in our community are counting on.”
Hank Butler, director of the Pennsylvania Jewish Coalition, which has been following the debate in Harrisburg over the tax credit program, wasn’t surprised to hear about the e-mail blast.
“Everyone has been alerted,” Butler said. “The Jewish communities, along with private school groups, have been for the past week and a half been doing alerts.”
“We’ve all been alerted that there are going to be cuts,” he continued, “and we are working cooperatively with the Catholic Conference and private schools to do a statewide approach — I’ll say grassroots effort — to emphasize the importance of the EITC to provide scholarships and allow underprivileged children to go to private schools.”
Like Frankel, Butler also said the process is still “fluid” and the numbers being proposed this week could quickly change depending on compromises and counter proposals.
“We are estimating by next Friday we will have a budget, but in this environment, who knows right now,” Butler said. “That’s why this [push] for the EITC; this may not be the final version, but at least we have to strengthen our message that the EITC is a vital program to all communities.”
(Lee Chottiner can be reached at email@example.com.)