More than two years after Gov. Tom Wolf shut down all “non-life support businesses,” Pennsylvania’s economy is still struggling to recover. Pennsylvania has lost 167,000 wage jobs since February 2020 and has the fourth-highest unemployment rate in the country. Industries with critical labor shortages – like natural gas – are desperate for labor and offer high wages.
Although these job openings disrupt the economy, they create opportunities for students who have chosen innovative educational programs to equip them with skills that are in high demand.
As students seize their opportunities, policy makers follow suit. In the new state budget, the Pennsylvania Legislature passed the largest expansion of its Educational Improvement Tax Credit (EITC) and Opportunity Scholarship Tax Credit (OSTC) programs. These allow companies to claim a tax credit in exchange for scholarship contributions, giving students greater access to educational opportunities.
An economic impact analysis found that expanding Pennsylvania tax-credit scholarships will result in higher lifetime earnings for students and billions of dollars in economic benefits from that increased revenue and a reduction in criminal activity.
EITC supports students like Elizabeth Smith, a recent graduate of Blue Ridge High School in New Milford. Before enrolling at the Susquehanna County Career & Technology Center (SCCTC), Elizabeth’s post-high school plan was “enter the job market.” Now destined for college, she earns a family-wage wage in the state’s thriving natural gas industry.
“I hadn’t thought about going to college,” Elizabeth said. “But we have so many gas wells in our area and I got interested in what it takes to drill them.”
At SCCTC, Elizabeth attended a three-credit introductory course at Lackawanna College’s School of Petroleum & Natural Gas. In the fall, Elizabeth will begin a two-year program leading to an associate degree in the technologies of manufacturing, processing and transportation of liquid and gaseous fuels.
“Without the scholarship, I definitely wouldn’t have had the $400 to $500 for my tool kit and steel-toed shoes,” Elizabeth said.
dr Alice Davis, executive director of the SCCTC, says Elizabeth’s development is not unusual. Although many students enter the workforce directly in areas such as practical nursing, cosmetology and welding, some get their foot in the door for a college education.
“Kids who might not think of themselves as college students have the opportunity to do well in a college class and end up saying to themselves, ‘I can do this,'” Davis said.
Elizabeth is lucky. Arbitrary tax credit caps are denying thousands of students scholarships across Pennsylvania. In 2019–20, more than 75,000 student applications went unfunded. Meanwhile, the state has waitlisted more than $116 million in donations for tax credit grants from companies that were willing to give — but couldn’t because of legal caps.
While the recent expansion will provide approximately 31,000 additional students with scholarships, it is still not enough to cover the student waiting list.
Powerful lobby groups like the Pennsylvania State Education Association oppose expanding EITC funding. dr Kenneth Cuomo, superintendent of both the SCCTC and the Elk Lake School District, says objections are more about power than program outcomes.
“The scholarship money goes directly to the students and the school and not through the state bureaucracy,” Cuomo said. “The opposition is about who controls the money.”
As labor shortages continue, state legislatures have even greater incentives to empower students looking for in-demand careers.
The newest addition to the SCCTC is a $500,000+ Commercial Driver License (CDL) School. The Career Center’s CDL program enrolls both adult learners and eligible high school students, with the latter qualifying for tax-credit scholarships that offset thousands of expenses.
Davis reports that a truck driver school graduate got a job immediately with an annual salary of $85,000. Another Career Center graduate who, like Elizabeth, enrolled at Lackawanna Petroleum and Natural Gas School is now earning six figures with a company that services compressors in the gas fields.
“I haven’t decided yet whether to go into gas or actually work on well sites,” Elizabeth said. Whatever her path, there is little doubt that her job prospects are better because of EITC.
Elizabeth is just one of thousands of Pennsylvania students who are benefiting from innovative education. The legislature is putting more students on the path to prosperity and in turn making Pennsylvania a more prosperous by expanding the EITC program.
Gordon Tomb is a Senior Fellow at the Commonwealth Foundation, a free-market, right-wing think tank in Harrisburg.
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