Private scholarships and public money: Where is the accountability?

A poster asked the other day when we were going to discuss the story on the lack of oversight of the state’s new private school scholarship program, which will cost taxpayers $50 million next year. I had not posted as the story went to print subscribers first and was not online until today.

The investigative piece by AJC reporters James Salzer and Nancy Badertscher raises good questions about the weak public accountability imposed on the program, which was created by the Legislature in 2008. (The bill was part of the general heave-ho given to public education that year, but I will save that lament for another day.)

The Legislature made changes this year to the law that make it a crime for state officials to release key information about the program.  In contrast, other states with similar laws including Florida have strict public accountability rules.

Here is part of the story. Take a look at it, if you have time.

The law set up “student scholarship organizations,” known as SSOs, that accept donations from people and corporations and funnel them to private schools. In a monthlong review, the AJC found that:

● The law signed by Gov. Nathan Deal earlier this month may be flawed. It says at one point that the state will post information about each scholarship organization on its website; later the same law says all information relating to SSOs is confidential.

● Three officers of one SSO were paid $109,000 each in 2009, or 9.5 percent of their revenue, according to a federal tax filing. Only a handful of other SSOs filed federal tax reports for 2009, but none reported making six-figure payouts to three officers.

● Proponents’ claims that the program saves the state millions of dollars are impossible to prove or disprove for all of the scholarship organizations.

● Each SSO must provide the state with an independent audit each year. Officials say that not all the organizations have done so, but they refused to say how many or which ones.

● The purpose of the program is to give public school kids a chance to attend private schools by granting them scholarships. But some SSOs encourage families to game the system: Although their children are already in private schools, they enroll them in public schools for the sole purpose of making them eligible for the scholarships. The children never actually attend the public school. The AJC found 81 such cases in one county alone.

Under the law, a person or a company may donate to an SSO, each of which has participating private schools. The donor may designate a particular school as the beneficiary. The SSO then sends money to the school, and the school uses it to award scholarships.

Individual donors may write off up to $1,000 of the donation as a dollar-for-dollar tax credit; couples may write off up to $2,500. And corporations may write off up to 75 percent of their total tax liability.

One large scholarship organization, Georgia GOAL, posts a transparency report on its website, but most offer the public few if any details about how they spend the millions of dollars in tax credit donations they receive.

Only a few of the more than 30 scholarship organizations listed on the state’s approved list last month responded to an AJC request for basic information.

A few said they hadn’t given out any scholarships yet. Phone calls brought varying amounts of information from a few more, such as GRACE Scholars Inc., run by the Roman Catholic Archdiocese of Atlanta, the Georgia Student Scholarship Organization in Cumming and Georgia Christian Schools Scholarship Fund.

Steve Suitts, vice president of the Southern Education Foundation, said the SSOs don’t want to release detailed information because they probably can’t withstand an “evidence-based assessment.”

“It doesn’t take much to see this as a campaign of no information and disinformation,” said Suitts, whose organization will release a report next month branding the scholarship program a failure. “What if we had [public] school districts operating this way?”

State Rep. Earl Ehrhart, R-Powder Springs, the sponsor of this year’s tax credit law and the unpaid CEO of the Georgia Christian Schools fund, called some of the program’s critics “crazy extremists” and said they should prove their case with facts or “shut up.” But even Ehrhart said SSOs should release more information than they do.

All the organizations should publish reports on how they spend the money, said Ben Scafidi, an associate professor of economics at Georgia College & State University and a policy adviser for Georgia GOAL Scholarship Program, one of the largest scholarship groups.

“People who donate their money to an SSO want to know if it is going to a kid who truly needs a scholarship and they also want to know it’s not going to excessive overhead,” Scafidi said. “They want to be accountable to donors, to scholarship recipients, private schools, and they want to be accountable to taxpayers.”

The new law says the SSOs must send the Revenue Department a report listing the total contributions by individuals and corporations, the number and dollar value of scholarships awarded, a list of donors, and the audit. It says the department should post the information on its website.

However, the next section of the new law says “all information or reports provided by student scholarship organizations to the Department of Revenue shall be confidential taxpayer information” and that it’s against the law to release it.

–From Maureen Downey, for the AJC Get Schooled blog

48 comments Add your comment

catlady

June 1st, 2011
10:29 am

So there is no telling if the person who donated (and got a dollar for dollar tax writeoff) is the parent/grandparent of the kid getting the (taxpayer sponsored) scholarship? What a surprise here in Georgia!

And, by giving the writeoff, that means the rest of us have to replace the tax money given as a credit, thus making US subsidize the private school scholarship. And there is no accoutability? No oversight? You mean the ordinary tax payer is bearing the burden for these private schools? Surely not here in Georgia, where we want the government’s hand “out of my pocket!”

It’s great to contribute to a private scholarship fund, if you wish, but giving a dollar for dollar tax writeoff is rediculous, if not worse! I said it then and I reaffirm it now!

Hey, I’d like a dollar for dollar tax writeoff for a “scholarship” for a new car. And, of course, you know who the first beneficiary would be, don’t you? And no oversight!

jarvis

June 1st, 2011
10:30 am

Unaccountable governement is corruption waiting to happen.

atlmom

June 1st, 2011
10:41 am

The reality is that I’d rather have these private schools have the money than the state legislature. That’s the problem isn’t it? I believe that if the legislators have the money, they will only waste it. If the schools have it, they might do something good with it.

Find the root of the problem

June 1st, 2011
10:45 am

you get what you vote for

Call it what it is.

June 1st, 2011
10:46 am

This was quite on purpose, of course, fully intended. This is simply a matter of crooks setting themselves up to get away with thieving taxpayer money (that $1000 that should be in the public funds for public purposes). Steal from the poor to give to the rich. I guess it’s only fair that Republicans should be the opposite of Democrats.

jarvis

June 1st, 2011
10:48 am

Yes atlmom, they might do some good with it, but there is no way of knowing. They don’t have to tell anyone where the money went.

bob leblah

June 1st, 2011
10:58 am

These are the loophole messes that legislators get us into. However, if we want to be fair, allow me to have my state tax “school” money to put where I want to.

jarvis

June 1st, 2011
10:58 am

To top it off, there is no limit to a corporate tax break. Basically the entirety of a corporation’s state income tax could be devoted to paying for private school for their employees. The whole thing is crap.

The private school “scholarship foundation’s” lobby must be pretty damn strong.

bob leblah

June 1st, 2011
11:22 am

hmmm.. i wonder if I can defer this money for an educational trip overseas… ;)

thomas

June 1st, 2011
11:30 am

@ jarvis,

Are we talking about the “government” or private organizations that administer scholarship donations? Do you say “Unaccountable private corporation is corruption waiting to happen,” too?

Cobb voter

June 1st, 2011
11:57 am

If it is a secret, it is probably a mess.

The exposure of those parents who enroll their child in a public school just to qualify them for the private school scholarship is a bomb that we should react to.

Dr. John Trotter

June 1st, 2011
12:09 pm

Maureen: No big surprise here. Looks like legislators using their positions ro get over on the public. People using public monies for private purposes have never set well with me…sort of like the charter school on Lake Oconee in Greene County. If it looks like a duck… Something’s just not right about people having the “private” education on “public” money…and then don’t want you to question them. The hubris of some people is bemusing.

Mikey D

June 1st, 2011
12:25 pm

So, Ehrhart calls people who are concerned about this system crazy and tells them to back their claims up with facts or “shut up” (great example there, Mr. Representative…) and out of the other side of his mouth is helping to make it difficult for people to actually find out any facts by claiming that this information is confidential. Good to see that it’s politics as usual here in Georgia.

Dr. John Trotter

June 1st, 2011
12:37 pm

Like I said on my blog yesterday, it is fashionable to criticize the AJC these days, but without the AJC, the story about Beverly Hall in Atlanta and the recent story about Will Schofield in Hall County wouldn’t have blown wide open. I have been knowing about the situation in Hall County for a couple of years but we don’t have the resources that the AJC has. So, we sat on the story for a good while. But, the AJC has the investigative reporters — and they do a good job! We readers and bloggers can point the AJC to certain hot spots.

A cauldron about to explode is now Clayton County. A gathering storm is developing in Clayton County the proportion of which I have never seen there. The employees (and parents) appear to be so tired of Edmond Heatley and his “Cult” (so to speak). It’s brewing big time in Clayco.

bob leblah

June 1st, 2011
1:04 pm

Couldn’t we cut Clayton county out and throw it into space.

Dr. John Trotter

June 1st, 2011
1:42 pm

@ bob: Or send Edmond Heatley and his Californians back to California. Ha!

Reality

June 1st, 2011
2:18 pm

Georgia republicans are ridiculous. They gut public education and say that it must improve (will less funding). They find a way to funnel more money into private schools – that don’t even need more money. AND (here is where it gets interesting), they do this behind closed doors and make it so it is illegal to even track the money going to private schools!

Can someone PLEASE tell me why any sane person in Georgia would vote republican?

Just Saying It Like It Is

June 1st, 2011
3:07 pm

They don’t want you tracking it; they don’t want us to know anything simply because the money is going to their rich friends – the little guy doesn’t matter to them nor does the education of the children of the little guy. People who voted for these Republicans are either millionaires or suckers.

BF

June 1st, 2011
3:15 pm

I think I need to get checked for whiplash. The founding principle of this blog can be summed up as, “government-employee school teachers can do no wrong, ought to be paid more than brain surgeons, and should never be held accountable for anything in any way, and most especially not for whether their students learn anything or not.” Get back to us when you’re ready to apply accountability to your pals goofing off in the teachers’ lounge, Maureen.

I won’t hold my breath.

Mom of 3

June 1st, 2011
3:16 pm

While not condoning the lying done by the parents of kids already in private schools, I understand it. Why in the world should public school kids get the money and private school kids not? Is the assumption that all public school kids can’t afford private school but all private school kids can easily afford it? Some parents of private kids scrimp, save, and sacrifice to send their kids to private school and yet can’t benefit from this scholarship. What a joke. My children attend private schools and I refuse to participate in the SSO’s. Like the article stated, I want to know that a truly deserving student will receive the funds I contribute. Unfortunately, the government is incapable of running any program effectively.

dc

June 1st, 2011
3:19 pm

AJC reports it, so it must be a scandal……because they NEVER would make a mountain out of a mole hill. Interesting how there wasn’t any sob story about a poor, single mom family who was getting helped out with this program, thus making any questioning of the value of the program forbidden (we are just trying to help the children, so don’t ever question whether it’s really effective or not!!!!). I guess that only happens when the program fits the AJC’s political POV.

bob leblah

June 1st, 2011
3:24 pm

I do think this is loopholed work-around mess.. but @dc On the nose in terms of your perspective of the bleeding hearts. The real solution is privatizing school. That would never happen though b/c it would become very apparent who was succeeding and was failing via their own effort and merit. We obviously can’t have that…

bob leblah

June 1st, 2011
3:28 pm

@Mom of 3- Agreed.
On the nose here
“Is the assumption that all public school kids can’t afford private school but all private school kids can easily afford it?”

Not everyone sending kids to private school is rich. We’re struggling to send our first, but think its important. A lot of people who can’t “afford” it maybe should consider not having the latest tv; cellphone; new rims; 3 vacations a year; 2 $40k cars. Maybe they could “afford” it then.

Mikey D

June 1st, 2011
3:33 pm

@BF:
I challenge you to find any posting on any of these blogs by a teacher that says teachers do no wrong, should make more than a brain surgeon, or want no accountablility. Just one. You can’t do it, can you? That’s because no teacher has EVER posted that on here. As opposed to someone like you, who insinuates that all teachers are lazy goof-offs hiding out in the “teachers lounge” (would really like to find that place… it’s miraculously stayed hidden from me for 16 years!!) and collecting a fat check for doing nothing. Your prejudice and anomosity are noted, but really add nothing to the discussion…

dc

June 1st, 2011
3:37 pm

come on, Bob, next your going to suggest that “people who need taxpayer help buying food for their families” shouldn’t buy tobacco or alcohol! oops, sorry, silly of me, that would never be acceptable thinking to the enlightened ones….:)

bob leblah

June 1st, 2011
3:51 pm

My neighbor was at the store the other day. A woman was in front of her in line using food stamps. She got into an argument b/c she was not allowed to purchase “organic” (expensive) eggs with her WIC check. It was the 3rd time she attempted this, b/c the manager was called over and told her “we’ve been over this…”. She, by the way, was not originally from this country, however, I am glad she is enjoying our hospitality while complaining about it.

dc

June 1st, 2011
3:59 pm

It can be an interesting world that we live in.

www.honeyfern.org

June 1st, 2011
4:18 pm

I read this article this morning, and I honestly don’t understand why organizations continue to hide how they spend their money and then believe that they won’t get caught. You can find pretty much anything online these days, and if you receive someone’s donation/hard-earned dollars/federal money, you should have to show where it went, especially as a non-profit (which you have to be to receive the money, and I am pretty sure that transparency is part of the laws governing non-profits).

This is just another reason why the general public doesn’t trust educators and the business of education any more.

rsterman

June 1st, 2011
4:30 pm

Only the rich can afford a “donation” – a tax deduction that will cause the rest of us to pay their share of taxes.

The GA GOP is using a backdoor scheme to undermine public education AND pass another tax cut specially crafted just for their rich friends.

Why are the middleclass the only people who have to accept cuts in state services? I think the idle rich could scrape by without another tax break?

catlady

June 1st, 2011
4:45 pm

So, if my state tax liability is $6000, can I specify it go to a certain SSO that just “happens” to give a hefty scholarship to my granddaughter? I mean, with no questions asked, and no one to report it? Sounds pretty sweet. And that $6000 that the state would have had to spend on roads or whatever, will be made up by other taxpayers (by raising their rates) including the overburdened middle class? All I have to do is get the SSO to agree to award a certain person. Perhaps I could join with others to pay the officers of the SSO, say, $100,000 per year for their “help.”

East Cobb Parent

June 1st, 2011
4:55 pm

The people I know contributing to the GASSO have had their children in private schools for several years. To my knowledge there is no way to designate a particular student. This would have to be done at the school level. I looked at the forms.

Greg

June 1st, 2011
5:01 pm

To answer your question, there is no accountability in this process. Neither. is there any accountability in public eduction. The whole system is a scam and our childen are lagging behind the rest of the world because of greedy adults.

Devil's Advocate

June 1st, 2011
5:08 pm

How is the argument that those who cannot afford private school deserve the opportunity to go any different from those who cannot afford a $150K home by traditional means (i.e. real down payments) deserve to have a home? Socialism is socialism. If you’re going to allow it in one place you’re going to find it in many places.

Private school is a luxury that does not deserve public tax money.

Devil's Advocate

June 1st, 2011
5:18 pm

Wrong Greg. Our children lag behind because the adults in our country don’t value education and would rather let their kids live they they are on some reality tv show than work hard for their education. There is nothing wrong with public schools other than too many adults don’t send their kids ready to learn. Show me one classroom without distraction from students who fails to adequately educate the students…

yuzeyurbrane

June 1st, 2011
5:20 pm

I think most people get it. Some of these SSO’s are very sophisticated parts religious fundraising bureacracies. Their primary goal is not to help individual poor or middle class students but to supplement the budgets of private (often parochial) schools. The amount for each student recipient is relatively piddling but the aggregate amount that the private schools are publicly subsidized is substantial. They have committees of lawyers and CPA’s guiding donors thru the technicalities of maximizing their tax write-offs. I know. I have read some of their pitches. Many also have fulltime paid staffs running their fundraising efforts. Some are but affiliates of larger religious based groups who also have fundraising efforts to send funds to educate children in foreign countries. So when they raise public tax money through SSO’s to fund parochial schools in Georgia it frees up money to fund their foreign charitable efforts. For those of us in the middle class who have been told to buck up (or as State Rep. Ehrhart would say, “shut up”) and tighten our belts because the state is broke (Erhart has said that, too), excuse me if I feel used by a bunch of powerful special interests. To add insult to injury, not only did this program not get cut this year like HOPE and in general, all public education budgets, but they funded it in full again and added an automatic COLA for automatic increases for a number of years without having to even come back to the legislature for approval!!! Erhart cleverly held this back and snuck it through during the waning hours of the legislative session. I doubt it would have survived a bona fide legislative review under the full light of the media and public. Or would it?

Coweta private schooler

June 1st, 2011
5:23 pm

My wife and I busted our rears for 13 years to send 3 kids to private Christian school and now another 4 for college. The last one graduates from Georgia Tech next year, following the same path as the older two. We paid our local school property taxes, and we paid for our own kids K-12 education. I’m glad to do my civic duty and pay for local government education, and my duty as a Christian parent to teach my kids correctly without government intervention. I wouldn’t take a dime of government money if it meant government oversight until they turn 18. Worth every penny of the money.

Glad my state idiot tax, aka lottery/Hope, and my state income tax money pays for most of their college. And they will all three be out without a penny of debt for me or them. Worth much more than the beach house we could have paid cash for instead, or the fleet of luxury cars. Life is about choices. It is possible if you want to and are willing to work hard enough and sacrifice enough to make it happen from the beginning.

And yes I am obviously a Republican.

Devil's Advocate

June 1st, 2011
5:39 pm

Bravo Coweta private schooler,

I would say your more of a conservative than a Repubican these days. Modern Republicans seem to be in on the buying of fleets of luxury cars or houses bigger than their family needs. Democrats and Republicans today both love tax money, they just want to spend it on different things. But I get what you’re saying. Good job.

I love teaching. I hate what it is becoming...

June 1st, 2011
6:41 pm

Coweta,

I am glad you were willing to do your part to support local education while sacrificing for your children, but do keep in mind that there are some who could never afford the “beach house” or “fleet of luxury cars” no matter how willing they were to ‘work hard’ and forgo certain amenities. Hard work does not guarantee wealth. There are lots of other factors that influence where an individual falls on the socio-economic ladder of life.

justin

June 1st, 2011
8:34 pm

@ coweta,

Congratulations on your children’s achievements.

As a christian, I sent/send my children to public schools. One is in college and receives HOPE. As a christian, I think I am doing my part to educate my children properly. I don’t feel any regret and guilt by receiving government subsidies for educating my children. As far as I can tell, there is no Biblical command that says christians should not receive government support. I believe there is a commandment to obey the authority and pay taxes.

So, I’m glad you feel you are doing a christian duty, but I sure hope you don’t feel others who follow a different path are not doing the same.

Tony

June 1st, 2011
10:58 pm

Didn’t the US Supreme Court recently decide on a case from Arizona where citizens contested a similar tax break? What was the decision?

a reader

June 2nd, 2011
8:04 am

1. The story in the AJC did have a positive story of a mom wtih daughter up at Holy Redeemer. It didn’t seem to be arguing with outcomes (how kids benefit) but rather with oversight and accountability.

2. Not all of the organizations are the same, and the article did point out that GA GOAL posted all of its information on its website. Too bad the other organizations don’t voluntarily rise to the highest standard.

3. There is a limit each year on how much tax money can be redirected. So there is a cap – it’s not unlimited.

4. My kids are in private school and I’m paying much $$ in property taxes. If this program took money directly from my local school system I might think it worth it, but taking it off the top at the state level in a time of economic distress is something I can’t support. So my tax bill is higher than it could be because the donation I make to my childrens’ school is just a regular chartible deduction and not a one-for-one reduction of my liability.

Having an educated public benefits everyone. This program doesn’t contribute to that at the state level, and that is the purpose of government: to serve everyone.

AJinCobb

June 2nd, 2011
9:06 am

@Coweta private schooler,

You’re opposed to taking a dime of government money to educate your children, yet all three have gone to Georgia Tech? Uh, that’s a public institution … government controlled, taxpayer funded.

yuzeyurbrane

June 2nd, 2011
10:03 am

I must admit that I am constantly puzzled by the complaint of many private schoolers that they are still paying local school taxes. Talk about the powers of people for rationalizing their own choices. No one forced them to send their kids to private school. It was their own choice. And, right or wrong, it is worth it to them. But don’t ask me to subsidize their own personal choice through additional taxes or less money spent on public education. And especially don’t ask me to make additional sacrifices when the main beneficiaries are the private institutions themselves and not any 1 individual student. Studies have shown that public schools were the greatest force for good in creating our democracy in the 19th and 20th centuries by both educating the children and assimilating millions of immigrants. Despite the sad history of racial discrimination throughout our society, public schools have made wonderful strides in helping assimilate black kids into the mainstream culture.

Reality

June 2nd, 2011
10:08 am

You private school folks need to STOP being so delusional!!!

Public schools are funded by everyone’s taxes. I am single with no children and yet must pay to educate all kids through public schools. This is what our society provides to all.

Private schools are for those not wishing to participate in what our society provides. This means that you pay out-of-pocket for your choice to send your kids to private school. You SHOULD NOT get any rebate, voucher, tax breaks, whatever to do this. This is your choice, period.

Whatever money you get from the State through any program is WRONG. By taking money, there is less of it to go where it is supposed to go. Why is this hard to understand? You have a whole pie, and you are taking a slice of it – thus there is less pie left. It seems pretty simply to grasp that concept.

Now, if you want to CLAIM that you should get your money back from the State, then I also want my money back. After all, I have no children to fund. However, I think that you would not like for me to do that….. because you are selfish. You are only looking out for your own pocket and don’t give a darn about me or about the overall well being of the children of Georgia.

Stop trying to justify your selfish position with such BS.

a reader

June 2nd, 2011
2:55 pm

The only reason I’d love to take some of my local school tax liability and donate that (vs. overall tax liability) is that local county has proven time and time again that they have been pretty much criminal in their mismanagement of taxpayer funds.

I view it as a punishment of sorts until the folks here get enough spine to vote out all of their school board members and actually find some who can get a superintendant hired and clean house!

b

June 2nd, 2011
5:00 pm

@ Reality: as a GA Republican, i’m embarassed to say I agree with you.

FBT

June 2nd, 2011
8:01 pm

Vouchers for every student would be most fair.

HLS

June 7th, 2011
8:18 pm

it was also AJC that brought out the actions and anticsof the storied Mr. John Trotter. And the sometimes influence he had to the detriment of the Clayton County schools.