Schlossberg votes to increase transparency and expand opportunities for childcare in educational tax credit program
Rep. Mike Schlossberg June 22, 2026 | 6:25 PM
HARRISBURG, June 22 – State Rep. Mike Schlossberg, D-Lehigh, today voted for legislation that would expand funding opportunities to include childcare costs while increasing accountability and transparency in the state’s Educational Improvement Tax Credit programs.
The EITC program, established by Act 4 of 2001, allows businesses to reduce their state tax liability – including the Corporate Net Income Tax and other taxes – by contributing to approved scholarship and educational organizations.
House Bill 2632, which passed the House, would expand the range of uses for the EITC, offering more opportunities for Pennsylvanians. This includes expanding the pre-kindergarten scholarship program to allow more money to be invested in childcare in Pennsylvania, removing caps on scholarships, and enhancing the tax credits to help low-income student programs.
“Childcare is one of the largest expenses working families face,” said Schlossberg. “By expanding EITC funding opportunities to account for those costs, we also can better support parents who are working hard to provide for their children.”
Schlossberg said EITC programs have grown to a $680 million public investment in nonpublic education for fiscal year 2025-26 – more than four times the $150 million cap that existed a decade ago. Despite that growth, the Independent Fiscal Office has reported that significant data gaps make it difficult to fully evaluate the programs’ effectiveness.
The bill would close reporting gaps and help ensure that program funds are reaching their intended recipients. Participating schools would be required to provide basic information to the Department of Education, businesses redirecting tax dollars through the program to submit basic information to the Department of Revenue, and participating entities to undergo audits by the state Auditor General
“A $680 million annual scholarship tax program should be transparent and include detailed reporting,” Schlossberg said. “This bill would ensure that everyone can see how well EITC programs are working and whom they are helping. By closing these reporting gaps, we will have the information needed to assess the effectiveness of EITC scholarships and evaluate their impact on our students, schools, and taxpayers.”
Schlossberg said that the legislation would not reduce funding for the program. Instead, it would increase transparency, reallocate funds to match demand, and expand funding opportunities to include childcare costs.
House Bill 2632:
- Allocates $680 million in tax credits to better align with program demand
- Expands funding opportunities to include childcare costs.
- Targets resources to students living in the attendance area of a low-achieving public school or attending a nonpublic school in a low-income ZIP code.
- Increases transparency on how scholarship dollars are used, including requiring reporting by income level and amount of remaining tuition charged to the student.
- Increases oversight of scholarship granting organizations.
The bill now moves to the state Senate for consideration.