The Southern Education Foundation — a organization founded in 1867 to improve educational excellence and equity in the South — released a report in June highly critical of the private student scholarship program enacted by our Legislature three years ago. Now, the SEF is proposing a change in the program to eliminate a loophole that it says allows students already in private schools to benefit rather than poor kids in failing public schools.
The Georgia General Assembly passed legislation in 2008 allowing individuals and corporations, within limits, to claim a dollar-for-dollar tax credit for collectively donating up to $50 million a year to student scholarship organizations, which funnel the money to private schools.
While supporters maintain that the program provides children of modest means a chance to attend private schools, critics counter that it diverts public tax money to a program that has little to no accountability to taxpayers and has sidestepped its stated original objective of giving poor students the chance to escape low-performing schools and attend private schools.
As a result of a two-year study of the scholarship program, SEF concluded in its June study:
Georgia’s program of tax credit scholarships for private K-12 schools has failed to achieve its primary public aim of providing the state’s low income children attending troubled public schools with new, affordable opportunities for a good education. During the last three years, the state program has diverted more than $72 million of Georgia’s tax revenues to private organizations operating virtually in secret.
Based on all available evidence, SEF finds that the law has been carried out in large measure as a means to publicly finance the attendance of relatively well-to-do students, many of whom are already in private schools. And, the report finds that instead of saving state tax funds, each of the private school scholarships financed by Georgia’s tax credits has cost the state government more than twice what it would spend to send a child to public schools
Now, the SEF is petitioning the Georgia Department of Revenue to adopt administrative rules to stop students attending private schools from qualifying to receive tax credit scholarships by merely registering at but never attending a public school.
Clearly, this program needs review. The Atlanta Journal-Constitution spent a month researching it and found that few of the student scholarship organizations were willing to provide information about their scholarship recipients, including family income. The state Department of Revenue approves the tax credits and requires audits of the scholarship organizations, but appears to make no other attempt to verify that the money is being used as the law requires. This is an invitation for abuse.
According to SEF:
State tax funds in Georgia are diverted to private student scholarship organizations (SSOs) to provide private school scholarships to students “who are enrolled in a Georgia secondary or primary public school.” Several Georgia SSOs and private schools have helped parents of private school students register their children in a public school but never attend, as a way to receive tax credit scholarships.
SEF’s petition aimed at stopping this practice outlines how the SSO law was enacted for the purpose of helping students escape troubled public schools. The petition also demonstrates that Georgia laws on state-supported scholarships use the terms “enroll” and “attend” with interchangeable meanings. These laws, including the SSO law, carry out the legislative intent that students receive state-supported grants, such as HOPE scholarships, only if they are actually attending a school.
Georgia’s tax credit scholarship law diverted more than $72 million in tax revenues from the state treasury from the first year of the program in 2008 to 2010, and more than $18 million has been pre-approved to be diverted this year. In June, SEF issued a report documenting the “enroll” issue, among other abuses.
–From Maureen Downey, for the AJC Get Schooled blog