Private schools benefit from Pa. tax credits but report zero low-income students
About eight in 10 Gesu students are low-income, according to the school’s self-reported enrollment data kept by the state.
Gesu relies on donors to help its families out with tuition. And it leans heavily on EITC and OSTC, collecting donations totalling $816,000 in 2017-18.
“It’s really critical for us as a school to survive,” said Bryan Carter, Gesu’s president and CEO.
Here’s how the programs work:
EITC and OSTC provide tax breaks to people who donate scholarship money to private schools. Basically, it’s an incentive to give money to private schools instead of giving it to the state.
Most Pennsylvania families are eligible for this scholarship money. A family with two kids can make up to $116,000 a year, roughly double the state’s median household income.
But those aren’t the families supporters of the program tend to highlight. Literature and rhetoricsuggest that the money mostly goes to families who would be in poor-performing public schools if they didn’t get scholarships.
“We also know that kids can’t learn in a failing school, in a public school, maybe an inner-city school, where it’s not safe,” said State Senator Mike Regan, R-Cumberland, who sponsored a tax-credit expansion bill in his chamber. “You can’t learn when you’re afraid.”
Backers highlight the altruistic purpose of EITC and OSTC, arguing that demand for the program outstrips supply.
“We still have a lot of students who come from poverty and are in violent neighborhoods, people who are coming from drug neighborhoods, who wanna get out of that neighborhood school and get to where their children are safe,” said State Rep. Stan Saylor, R-York, chair of the House Appropriations Committee.
But is Gesu the exception or the rule? And do scholarship students typically come from “violent…drug neighborhoods?”
In Pennsylvania, there’s been little effort to answer this question.
State law prohibits regulators from tracking anything about the students who receive EITC or OSTC scholarships — that includes income and academic outcomes. And the scant data available may not be accurate, as our analysis discovered.
There is, however, numerical and anecdotal evidence that suggests a significant portion of the money goes to families of greater means.
Students walk in lockstep inside the Church of Gesu before the school’s recent graduation ceremonies. (Brad Larrison/WHYY)
Like the Gesu School, Villa Maria Academy is a Catholic institution that benefits from the EITC and OSTC programs.
That’s where the similarities end.
Gesu is coed and located in a zip code where most live below the poverty line. Villa Maria sits on 45 acres in Malvern, a posh Philadelphia suburb, and serves all girls.
Villa Maria is surrounded by some of Pennsylvania’s highest-rated school districts, a fact not lost on Ron Lance, director of business operations.
“We’re in a very competitive area here where the public schools are very good and the parochial schools are very good,” Lance said. “You kinda scratch your head sometimes as to why someone would stretch so far to send their kids here, as opposed to Conestoga [School District] or Great Valley [School District] or one of the Downingtown schools. But hey, different strokes for different folks.”
In 2017-18, Villa Maria raised a combined $141,201 through the EITC and OSTC programs. Lance described scholarship recipients as the children of single parents living in well-to-do areas — parents who aren’t wealthy enough to afford the $23,000 tuition at Villa Maria. The school reported serving no low-income students from its enrollment of 445.
Ron Lance said it’s difficult for Villa Maria to attract students from poor families because of its location and the fact that its school is predominantly white.
“I understand the pushback on EITC and OSTC,” Lance said. “And I guess I get that you’re not reaching the poverty folks. But I think it’s difficult for a private school to appeal to some of these minorities.”
Several independent schools described their EITC and OSTC recipients as a mix of students from both low and middle-income families.
Many of those schools charge tuition that tops $20,000 a year and said they wanted to open their doors to families who couldn’t otherwise afford it.
“We’re a blue-ribbon school that provides top education for the brightest girls,” said Jody Romano, vice president of institutional advancement at Mount Saint Joseph Academy, a private school outside of Philadelphia. “Why wouldn’t you want them, just because of economic issues, not to come to the best possible school they could where they could get the best education that could launch them forward?”
Mount Saint Joseph Academy was one of the 57 schools that received scholarship money through their own EITC or OSTC collection organization but reported serving no low-income students.
But administrators say they do have some low-income students, even though they put “zero” on the state’s enrollment form.
The state does not force private schools to calculate the number of low-income students they serve and said private schools can put “zero” if they’re not able to calculate a figure.
Even though private schools have to track student income as part of their participation in EITC and OSTC, when we approached schools that put “zero” on the state form, more than a dozen said it was a mistake, an oversight, or a function of the fact that they couldn’t make a determination.
Some of the state’s most renowned private schools said they overlooked or couldn’t calculate a low-income percentage, including William Penn Charter, Episcopal Academy, Westtown School, and St. Edmund’s Academy.
After being contacted, some of those schools volunteered the information. Episcopal Academy, which accepted $1.3 million in tax credit scholarship money in 2017-18, said about two percent of its students were low-income. Penn Charter reported roughly five percent. Westtown School and St. Edmund’s said their numbers were higher than zero, but could not calculate an exact percentage in time for publication.
Other schools did not respond or declined to comment.
YSC Academy, a school for elite soccer prospects run by the Philadelphia Union, raised $339,046 for a student body of 75. It reported serving no low-income students and declined to comment.
Academy of Notre Dame de Namur, an all-girls school on Philadelphia’s Main Line, raised $273,475 through the tax-break programs and reported that less than one percent of its student body was low-income.
The Kiski School, a boarding school in Westmoreland County, raised $216,350, and did not report serving any low-income students. Officials did not respond to requests for an interview.
Keystone Crossroads could only examine the data for schools that have set up their own scholarship funds. Other schools receive EITC and OSTC money, but through intermediary organizations that don’t have to report what schools their scholarship students attend.
‘Taken as fact’
The OSTC program does require some measure of transparency. Organizations benefiting from the tax credit must submit a yearly renewal form to the state’s Department of Community and Economic Development that asks how many scholarships were given to students from families at or below 185% of the poverty level. For a family of four, that’s about $46,000 a year.
Diving into those forms, though, also reveals questions and irregularities.
Twenty-two organizations — such as Philadelphia’s Girard College — reported giving every scholarship to families below the poverty threshold.
Three organizations — Drexel Neumann Academy, Springside Chestnut Hill Academy, and the Children’s Jubilee Fund — said they didn’t give a single scholarship to a low-income student.
When we contacted organizations that reported giving relatively few scholarships to low-income families, several said they didn’t understand the form. A woman at Drexel Neumann Academy, located in Chester, said her school had always put “zero” on the form and never received any questions from state officials.
The Diocese of Scranton — which said only one percent of its scholarship recipients were low-income — blamed a mathematical error. A spokesperson said the proper number was 39%.
Several organizations filled out the form in ways that are mathematically impossible.
For instance, the ACSI Children’s Fund — which backs independent, Christian schools — reported giving more scholarships to poor families than total scholarships. The Neighborhood Academy in Pittsburgh made the same error.
Some of these errors seemed fairly obvious, but state regulators said they’re not allowed to ask private schools about the income level of scholarship recipients.
The reported figures are “taken as fact,” said Jim O’Donnell, the tax credit division director at the Department of Community and Economic Development, which oversees the programs.