By: Dan Bartkowiak, Chief Strategy Officer
Pennsylvania House Democrats are busy trying to explain their vote on House Bill 2632, legislation that would take Pennsylvania’s successful tax credit scholarship programs and replace it with a weaker, more restrictive program.
PA State Rep. Jennifer O’Mara (D-Delaware County) recently posted a video saying many people have received a text message about her yes vote and that she wanted to explain the bill. “Let’s make it make sense,” she says.
Sadly, several of Rep. O’Mara’s claims about HB2632 are inaccurate and incomplete. Especially with other House Democrats making similar claims related to the Educational Improvement Tax Credit (EITC) and Opportunity Scholarship Tax Credit (OSTC) programs, let’s dive deeper:
Claim #1: “This bill does not cut a single dollar of the $680 million of taxpayer money that is invested into the EITC program.”
- Original language: The original version of House Bill 2632 did include direct cuts to available scholarship aid, reducing scholarships from $370 million to $273 million. While the bill was later amended to remove those direct cuts, HB 2632 still proposes changes that would have a financial impact, including reducing tax credit levels, imposing a new tax on scholarship organizations, and tying student eligibility to unrelated policy changes, specifically future legislatively enacted minimum wage increases.
- Eye-opening committee vote: Rep. O’Mara serves on the PA House Education Committee and was one of 14 Democrats who voted yes to pass the original version of HB2632, which included direct financial cuts. It was not until the bill reached the PA House Appropriations Committee that the direct scholarship cuts were removed (in large part due to significant public opposition – Thank you!).
- Tax Credits vs. Taxpayer-Funding: The current $680 million in the EITC and OSTC programs represents tax credits, not taxpayer money. These student scholarship programs rely on voluntary contributions from individuals and businesses in exchange for tax credits rather than direct state appropriations. That distinction is important.
Claim #2: “This bill also does not eliminate the EITC program or the scholarships that are currently given out.”
- On page 3 of House Bill 2632, the legislation creates a new “Education Options Tax Credits” program to replace the existing framework. This would be a new, more restrictive program.
- Beginning with the 2027-28 school year, tax credits would no longer be awarded under the EITC or OSTC programs but instead through this new Options program.
- In addition, the bill would change the current “economically disadvantaged schools” (EDS) scholarship structure. Rather than maintaining the existing EDS supplemental scholarship model, it would change those scholarships into a geography-based approach like the current OSTC program. Current EDS supplement scholarships of up to $2,000 for elementary students and $4,000 for high school students would be eliminated.
- House Bill 2632 also adds several new regulatory requirements, including:
- Requiring the Auditor General to regularly audit every scholarship organization and every participating private school, oversight that is not required for public schools in the same way (see bill pages 15-17).
- Imposing new reporting requirements on participating private schools (see bill pages 33-35).
- Adding a 2% tax on scholarship organizations to fund state agencies (see bill page 18).
- Requiring additional reporting by the Department of Revenue to reveal donor information that can intimidate those participating in the program (see bill page 15).
Claim #3: “Last week, the PA Senate voted to increase funding to the EITC program without any accountability measures.”
- Pennsylvania has already enacted enhanced reporting requirements for scholarship organizations, including additional reporting on scholarship recipients. Those requirements take effect this year, and reports covering the 2025-2026 school year will be publicly available through the Department of Community and Economic Development (DCED) beginning this November.
Bottom line: PA House Democrats are pushing Gov. Shapiro’s agenda to devalue educational options. The maker of HB2632 campaigned on controlling education funding, and this bill would fundamentally replace and further restrict Pennsylvania’s longstanding programs that expand educational opportunities.
Meanwhile, based on state testing, 380 public schools in Pennsylvania are designated as “low-achieving.” Harrisburg High School, whose main campus sits less than three miles from where our State House members voted on House Bill 2632, has just 12% of students proficient in reading and only 2% proficient in math.
At the same time, EITC and OSTC awarded more than 100,000 student scholarships during the 2023-2024 school year. Demand continues to exceed available scholarships, with nearly 70,000 student scholarship applications going unmet because the programs have reached their statutory caps.
Pennsylvania should not be working to make these scholarships more difficult to access. We should be working to expand access to educational options to help more students in need.
