It appears Gov. Tom Wolf is trying to save two tax credit programs -- imperiled by the state budget impasse -- that provide $150 million in scholarship money to students in grades K-12 across the state.
On Christmas Eve, the governor directed the state Department of Community and Economic Development to send conditional approval letters to companies that had applied for the Educational Improvement Tax Credit and the Opportunity Scholarship Tax Credit programs.
While companies had been applying to participate in the programs, DCED has been holding off on approving the applications, despite pressure from some legislators, because the caps on the programs are set in the annual tax code approved by the Legislature. The tax code is not approved until a final budget is adopted.
But with the Dec. 31 deadline approaching for approval on tax credit applications, the governor gave the directive to issue the conditional approvals, with the condition being that the programs are continued when the 2015 budget and tax code are approved.
The budget stalemate continued as Monday came to an end with no action taken on the $30.3 billion spending plan from the Legislature that Gov. Wolf received on Dec. 24. That budget is about $500 million less than the one Mr. Wolf supported and negotiated with Senate Republican leaders.
Mr. Wolf is planning a budget announcement this morning. His options include signing the bill, allowing it to become law without his signature, vetoing it or signing it into law while eliminating parts of it.
Jeffrey Sheridan, spokesman for Mr. Wolf, said the governor’s directive on the tax credit programs was to approve applications up to the 2014 caps on the programs -- $100 million for EITC and $50 million for OSTC.
The EITC has allowed schools to raise general scholarship money through business tax credits since 2001. The OSTC program was approved in 2012 and provides scholarships for students in the attendance areas of the state’s lowest-performing schools to transfer to other public or private higher-performing schools.
While officials at the some of the schools that raise scholarship money are happy about the governor’s directive, the short notice means they are scrambling this week to reach their regular donors and to convince them to write checks by the end of the week.
To qualify for the tax credit program, assuming it is continued, checks from companies must be dated 2015. That is unless the Legislature approves some type of exception to the rules of the program, said Aaron Troodler, Pennsylvania regional director of the Orthodox Union Advocacy Center, which represents about two dozen Jewish schools in the state.
“We are definitely appreciative of the fact that the governor allowed the release of the letters. Ideally we would have liked to have seen them released well in advance of the final week of the year, which would have given scholarship organizations more time to do their due diligence and collect the checks,” Mr Troodler said.
Mr. Troodler said statewide Jewish schools have received about $10 million annually from the tax scholarship programs.
In Pittsburgh, Diocesan officials are working this week to reach its EITC and OSTC scholarship donors, said schools Superintendent Michael Latusek. The Pittsburgh Diocese raises about $3 million a year through the EITC program and $2 million a ear through the OSTC program.
Those funds provide scholarships for 4,500 of the 18,000 students in diocesan schools. The money raised this year would be used in the 2016-17 school year.
“This is good news in one respect, but we are scrambling,” Mr. Latusek said.
He said Ron Bowes, assistant superintendent for public policy and development for the Diocese, and school principals, were busy this week contacting donors to let them know their approval letters were forthcoming and trying to convince them to write checks by the end of the week.
The work is made difficult by the time constraint and the fact that people are out of town for the holidays.
“We will wait and see how this goes. Hopefully all is well,” Mr. Latusek said.
Mary Niederberger; firstname.lastname@example.org; 412-263-1590. On Twitter @MaryNied.