Lincoln Charter School celebrates National School Choice Week on Tuesday, Jan. 24, 2016
The majority of Republican House members signed a letter urging Gov. Tom Wolf to prioritize issuing approval letters for a tax-credit program that helps fund private schools.
The letters should have been sent out last month, according to state law, but the administration has stated it won't issue the tax credits until the budget — already more than three months late — is finalized.
The Educational Improvement Tax Credit and Opportunity Scholarship Tax Credit programs grant tax credits to businesses in exchange for contributing up to $750,000 to local scholarship or educational improvement organizations.
The programs, which help fund a majority of the state's private schools, were started after several failed attempts by former Gov. Tom Ridge to implement a taxpayer-funded school voucher program.
The tax credits, granted through the state Department of Community and Economic Development, are worth up to 75 percent of the business's contribution or 90 percent if the business agrees to provide the same amount for two consecutive tax years.
The department delayed sending out approval letters to businesses applying for the tax credits during the budget impasse in 2015, with Wolf and his administration claiming it did not have the authority to approve those credits without a completed budget.
Republicans argued that Wolf did have authority to send out the approval letters and that he was using the program as a means of applying pressure on lawmakers to finish the budget.
The department eventually sent out conditional approval letters to eligible businesses in late December 2015.
Aaron Anderson, CEO of York City's Logos Academy, said the delay caused his school to miss out on $100,000 in contributions from donors who complained that the program was becoming too much of a hassle.
Contributions through these tax-credit programs make up about 40 percent of the private K-12 school's operating revenue, according to Anderson, and delays in receiving that funding has caused Logos to burn through its reserve funds.
Violation of law: In an effort to avoid a similar circumstance in the future, legislators inserted language into last year's Public School Code bill that would require the department to issue approval letters to businesses that apply for the tax credits "by Aug. 15, or 30 days following receipt of the completed application, whichever is later."
Act 86 was signed into law by Wolf on July 13, 2016.
Despite the language of that law, J.J. Abbott, spokesman for Wolf's office, wrote in an email that "the administration remains unable to issue tax credits with certainty as the budget has not been completed by the legislature."
DCED spokesman David Smith added that the department has no plans to issue conditional approval letters, as it did during December 2015, when the budget was still not complete.
In light of the administration's stance, Reps. Kristin Phillips-Hill, R-York Township, and Jamie Santora, R-Delaware County, co-authored a letter to Wolf on Tuesday, Oct. 3, requesting that he expedite sending out those approval letters.
The letter, which was signed by 77 other House Republicans, states that the department initially told House staff members that the approval letters would be sent out near Labor Day, then that delays were occurring due to staff shortages, and finally that the delays were because Wolf "did not believe it was prudent to (send the letters) without a revenue package."
"The Department has no authority to withhold or delay tax-credit approvals for any reason, regardless of whether that reason is a staff shortage or the absence of a fully completed budget agreement," the letter reads. "The department's delay in issuing the letters of approval is clearly a violation of law."
Phillips-Hill said a lawsuit could be filed against the administration to compel the governor to follow the law, but such a suit would have to come from a parent, school or business directly affected.
"So many children and families depend on these programs," she said. "We have to put people over politics."
Phillips-Hill added that she spoke with House Democrats who support the programs, but they didn't sign on to the letter because there was not consensus on certain wording in the letter.
House Appropriations Chairman Stan Saylor, who signed the letter, said the administration refusing to release these tax credits is a clear case of harming children in an effort to pressure legislators to pass a budget.
Budget negotiations: That budget isn't likely to be completed until at least mid-October after the House and Senate adjourned Oct. 5, without plans to return before Monday, Oct. 16, according to The Associated Press.
Wolf scolded House Republicans during a news conference Wednesday, Oct. 4, for repeatedly failing to deliver a tax package that he deemed large enough to deal with Pennsylvania’s deficit.
After killing a Wolf- and Senate-backed revenue package that included a tax on Marcellus Shale natural gas production, the House has considered proposals including gaming expansion, a warehousing tax and an increased hotel occupancy tax, according to AP reports.
Wolf said during his news conference that he would look to borrow $1.2 billion against profits from the state-controlled liquor system to help patch a $2.2 billion deficit while the Legislature continues negotiations.
Left unclear is the fate of measures carrying nearly $600 million in aid to Penn State, the University of Pittsburgh, Temple and Lincoln universities and the University of Pennsylvania’s veterinary school and authorization for another $52 million for Penn State’s agricultural research and extension programs, the AP reported.
Those measures remain stalled in the House, without money to pay for them.
— Reach David Weissman at email@example.com or on Twitter at @DispatchDavid.