Thursday, August 28, 2014
Inquirer Daily News

Podcast: Is there enough oversight of state tax credits?

Gov. Corbett signed a $27 billion budget last month, and the headlines have centered around the state making deep and controversial cuts to services for the poor and disabled.

Podcast: Is there enough oversight of state tax credits?

Gov. Tom Corbett signed a budget last month that expands a tax credit for corporations that fund scholarships to private and parochial schools.
Gov. Tom Corbett signed a budget last month that expands a tax credit for corporations that fund scholarships to private and parochial schools.

Gov. Corbett signed a $27 billion budget last month, and the headlines have centered around the state making deep and controversial cuts to services for the poor and disabled.

But while cutting services, the state also cut taxes.

The Educational Improvement Tax Credit program, which allows corporations to receive tax credits for funding scholarships to private and parochial schools as well as educational services, grew from $75 million to $100 million. Plus, an additional $50 million is going toward new tax credits for scholarship aid to go to students in low-performing public schools.

Listen to this week's It's Our Money podcast, in which we talk to Daily News Editorial Page editor Sandra Shea, who argues that there isn't enough oversight of the program. 

Check out some of the highlights from our interview with Shea below.

On EITC supporters who say the program saves money for taxpayers:

"The people who are in charge of granting these tax credits … tend to say well, you know, these are programs that are funded by corporations. But, in fact, taxpayers actually fund them. Because the tax credits actually are, in fact, revenue that the state does not receive. So it is basically showing up as a deficit in the budget."

On whether the EITC program is “vouchers-lite,” as it has been called in Harrisburg:

"A corporation makes a donation to a scholarship organization. That scholarship organization then gives money to students to attend private and parochial schools. Meanwhile, the corporations that make that donation get that money back in the form of a tax credit. So, in fact, it’s kind of like one step removed from vouchers."

On other state tax credits:

"This is kind of a stealth budget in the state. And last year, the total number of tax credits that was authorized by the legislature was $344 million. Now, that’s a big number and if there were any other single line item in the budget for basically $350 million, you know people would be talking more about it."

On oversight of the state's tax credit programs:

"This is also taxpayer money that doesn’t have very much scrutiny attached to it. The DCED [Department of Community & Economic Development], for example, oversees all tax credits that are granted in the state. But they don’t do much in terms of monitoring the programs."

About this blog
Every year, city government spends slightly more than $4 billion. Where does all that money come from? More importantly, where does it go? Are we getting the most bang for our tax buck? “It's Our Money” is a joint project between Philadelphia Daily News and WHYY, funded by the William Penn Foundation, designed to answer these questions.

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