A statewide coalition of Jewish, Catholic and business leaders is working the phones and Internet to drum up support for a tax credit that provides educational opportunities for thousands of Jewish children in the state.
The Pennsylvania Educational Improvement Tax Credit, which offers tax breaks to corporations that contribute to private scholarship funds, is facing funding cuts as the Legislature and Governor continue to haggle over the 2010 budget.
The EITC has generated more than $4 million in aid to Jewish funds statewide, according to Hank Butler, executive director of the Harrisburg-based Pennsylvania Jewish Coalition.
Butler expects cuts to the EITC, currently funded at $75 million. The question is: how deep will the cuts be?
“It would be naïve for anyone to think there would not be cuts,” Butler said. “We’ll do everything we can, but everyone has to brace for the reality that in this economic climate, there will be cuts.”
Budget proposals floating around Harrisburg range from cutting the EITC in half to keeping it fully funded. Most of those proposals have failed. Butler expects House and Senate leaders to go into conference committee later this week or next week to hammer out differences over the budget.
Before that happens, a grassroots coalition is trying to make the case that the EITC is a vital education program, and not just a tax break for businesses.
“If it’s looked at as another business incentive, we could get hit,” Butler said. “It is an essential education program and thousands of kids are being helped who would not be helped without this program.”
The EITC gives businesses a credit against state taxes in return for donations to certain scholarship funds registered under the program. In Pittsburgh alone, the program has generated $8.3 million in scholarships for 2,786 kids attending day schools and pre-K programs since 2001, according to Sally Stein, who manages the scholarship foundations at the United Jewish Federation.
“We have two foundations set up to receive contributions under the tax credit program, one supports the three day schools,” Stein said. “The second is for the pre-K program and that supports eight pre-K programs based at the JCC and seven area synagogues.”
None of the scholarships have covered 100 percent of a school’s tuition, she added, but “if a family has several children attending program, all the children would be eligible.”
As part of grassroots effort to protect the EITC, United Jewish Federation President Daniel Shapira acting as chair Pittsburgh Jewish Education Improvement Program, and Rev. Kris Stubna, secretary for Catholic Education at the Diocese of Pittsburgh, jointly wrote a letter to the Pittsburgh media urging support for the EITC.
“We believe cutting the EITC program would be shortsighted, as it could deprive hundreds of children of a high-quality education and supportive enrichment programs,” they wrote.
State Rep. Dan Frankel, D-Squirrel Hill, said the battle over the EITC breaks down largely along party philosophies — Democrats generally see some kind of tax increase as necessary for budget stability, while Republicans oppose tax increases and prefer to make more spending cuts.
“The governor is committed to it (the EITC) and fully funds it in his budget, as do House Democrats,” Frankel said. “In the Republican budget, they lump all the tax credits together. … That number, when you lump them all together is $250 million. We understand they’re looking at a 50 percent cut in the EITC, which would bring it down to $35 million or $36 million.”
But Butler said there was at least one Republican bill in the House that would have fully funded the EITC as well.
He hopes any cuts to the EITC stay below 10 percent, or a reduction of no more than $7 million. That would leave the program funded at its 2007 level, which Bulter sees as livable.
(Lee Chottiner can be reached at email@example.com.)