This month the Wingfield household, like millions of others across America, has received a growing number of tax documents. Among them are forms certifying that we gave $50 to this charity or $100 to that one, allowing us to reduce what we owe in taxes.
What neither we nor the IRS will receive is official documentation that our church converted X number of non-believers into Christians, or that a charity we supported decreased poverty or sexual exploitation by a quantifiable amount. Or that everyone who benefited from our donations earned less than a certain amount of income.
Yet, similar bits of data are being requested of one of the kinds of non-profits we could have supported but didn’t: Georgia’s student scholarship organizations.
These SSOs accept donations from Georgia taxpayers, who can then reduce their state income taxes by an equal amount — up to a limit for all donors of about $50 million per year, or one-quarter of 1 percent of all revenues the state expects to collect this year. They then give the money to private schools, which in turn award scholarships to students.
Many claims are made about these so-called tax-credit scholarships. The most easily dismissed is that this is the state’s money.
“The United States Supreme Court ruled, clearly, that this is not tax money,” says Rep. Earl Ehrhart, the Powder Springs Republican who sponsored the 2008 bill that authorized SSOs and these tax credits. He refers to the court’s 2011 ruling in two cases involving Arizona’s tax-credit scholarships.
Indeed, the opinion authored by Justice Anthony Kennedy states: “When Arizona taxpayers choose to contribute to STOs [the equivalent of Georgia’s SSOs], they spend their own money, not money the state has collected from respondents or from other taxpayers.”
Given that ruling, it’s not clear Georgia has to report anything about donations to SSOs — any more than it should report how much Georgians give to churches, synagogues or mosques, groups that fight hunger and poverty, groups that promote the arts or conservation, or any others.
Still, Ehrhart has filed a bill this year, HB 140, that would, among other things, raise the annual cap to $80 million but require public reporting of some aggregated information about SSOs: the number and value of donations made by individuals and corporations, as well as the number and value of scholarships awarded.
That last bit of data could help prove what SSO advocates have long argued: that these scholarships actually save tax money, because the average award amount is less than what public schools spend per pupil.
Scholarship recipients’ family income is another matter. Ehrhart says the program “was never sold” as one meant to benefit only low-income students, though he argues they are bound to be the greatest beneficiaries.
“You don’t give [scholarships] to rich kids,” says Ehrhart, who serves as the unpaid head of an SSO called Faith First Georgia. “Why would you take your limited money and do that?”
And, getting back to the original point, means-testing would represent a level of scrutiny not applied to other charities and their donors.
Speaking of scrutiny, a newer complaint about tax-credit scholarships is that some private schools receiving money from SSOs have policies, for religious reasons, that prohibit gay students.
But as the Supreme Court recognized, these donations are private gifts, not public money. There is no conflict here with public discrimination policies any more than when Georgians make tax-deductible gifts to other religious entities with similar views.
Barring these tax credits based on some private schools’ faith-based guidelines for students could, however, set a precedent for attacking the tax-deductibility of all gifts to religious groups.
As for claims that some donors and private schools are finding ways to make sure contributions are earmarked for specific students, including the donors’ own children, Ehrhart points out that practice is illegal — and encourages anyone with knowledge of law-breaking by specific SSOs, donors or schools to contact their district attorney.
– By Kyle Wingfield