A Failed Experiment: Georgia’s Tax Credit Scholarships for Private Schools

posted May 25, 2012, 2:23 PM by Bill Duncan


A thorough study of the Georgia program.  Their conclusion:

Since 2008 all sectors of public education in Georgia from pre‐kindergarten
through college have struggled with reduced state revenues. During the last three years
(2008–2010), state appropriations for K‐12 public education in Georgia have been
reduced by a total of $1.46 billion. There have also been deep budget cuts in higher
education. During this same period, for the first time since 1962, Georgia has financed
private elementary and secondary schools through state tax credits amounting to more
than $72 million.

In the 2011 session, the Georgia General Assembly continued to reduce state
support for public education. Every sector of public education in Georgia—pre‐
kindergarten, K‐12, and higher education—suffered deep cuts in the state budget adopted
by the General Assembly. The Georgia Pre‐K program was cut by $54 million despite
strong evidence that it is saving taxpayer funds. The state’s K‐12 budget for public schools
was reduced by approximately $110 million. Cuts in the state budget for higher education
amounted to more than $174 million.

The legislature also effectively reduced by 10 percent the amount of most HOPE
scholarships. In addition, with added fees and an additional three‐percent tuition hike,
most students attending the state’s public colleges and universities this fall will pay about
nine percent more in college costs with or without a HOPE scholarship.

The Georgia legislature also passed into law an automatic increase in tax‐credit
funding for private school scholarships that will rise in tandem with the cost of living.
Georgia’s program on tax credit scholarships for private schools was the one and only
education program that received an annual increase in state funding. And it is the only
state‐supported educational program that does not account publicly for its use of tax
funds or its educational impact.  

This exceptional support for Georgia’s K‐12 private schools has been sustained
amid hard economic times on the public promise that this experiment in tax‐funded
educational choice will help the state’s neediest students who are trapped in low
performing public schools and, at the same time, save Georgia taxpayers money.  

Based on all available evidence, it is clear that the state’s investment in private
schools through SSOs has failed to achieve its primary and most important aims. Instead
of providing the state’s neediest children trapped in low performing public schools with 60
new, affordable opportunities for a good education, SSOs have carried out the law, in
large part, as a means to publicly finance the private education of relatively well‐to‐do
students, many of whom are already in private schools. Instead of saving tax funds, each
of the private school scholarships in Georgia’s state’s tax credit has cost the state
government more than twice what it would spend to send a student to public school. 
These failures are only the beginning of the problems with tax credit scholarships
for private schools in Georgia. The law appears to deliberately prevent any level of public
accountability for how the tax‐funded program is operated. It criminalizes public
disclosure of basic information. It makes it extremely difficult—at times virtually
impossible—to ascertain specific information that, if hidden or made inaccessible in the
public schools, would be a matter of public outrage.

As a result, during the first three years in which private student scholarship
organizations have raised and used tax‐diverted funds to support scholarships at private
schools, SEF has discovered a wide range of serious problems and questions about
whether SSOs and private schools are complying with the basic provisions of state law.
Many of these problems do not appear to be accidental. They often appear to be
deliberate attempts to ignore or evade the law and its original, honorable goals.  

No private school receiving a tax‐funded scholarship is accountable for how well it
spends public funds to educate a student. No SSO is really accountable for its
expenditures. In effect, the State of Georgia has a program that is handing millions of tax
dollars to anyone who can create a nonprofit organization and can sell private school
parents and their friends on diverting tax dollars to support the private schools their
children attend. It has allowed these private salesmen to be virtually unaccountable for
how they raise and use taxpayer funds for private education.  

The Georgia Partnership for Excellence in Education (founded in 1992 by the
Georgia Chamber of Commerce and the Georgia Economic Developers Association)
recently summed up the issue well: “Georgia scholarship and tax credit programs . . .
should be accountable to the public and show a return on investment to all Georgia

So far, Georgia has ignored what other states have learned in trying to assure that
tax‐diverted funds for education are used for the public good—not diverted for private
purposes. Georgia alone among the states with tax credit programs has failed to create a
program that has any real chance of successfully helping low income students in public
schools. And in failing to provide any meaningful information by which parents can
compare how public and private schools educate children with similar backgrounds,
Georgia’s SSO law has assured that parental choice often can be nothing better than a
guessing game.  

As a consequence, Georgia’s SSO program appears to be far more about doling out
tax dollars to private schools and far less about improving the educational choices for
needy students in public schools.  

The available evidence strongly suggests that relatively few low income students
are receiving tax‐funded scholarships to attend private schools. The preponderance of
evidence also indicates that relatively few African American or Hispanic students are
benefitting from these tax‐funded scholarships. In addition, based on available data, it
appears that the state tax credits are primarily sustaining or increasing economic and
racial segregation in Georgia’s private schools, which are far more segregated by race,
income, and religion than the state’s public schools
In every important respect, the evidence points toward the conclusion that
Georgia’s experiment in financing private choice with tax dollars to improve the state’s
education has been a devastating failure of policy and practice.  

It is disheartening to consider how the $72 million in tax revenue that the SSO law
has already diverted from the state treasury might have been spent to better assist low
income students in public schools during a time of severe cutback in public education.
Every parent and grandparent of Georgia’s public schoolchildren knows how much each
public school could have wisely used even a small, additional amount of funds during the
last three years.  

At a time when the state government continues to reduce all facets of public
school funding, it makes no sense to continue a failed program that is diverting tax dollars
from a state treasury that cannot adequately support public education. At a minimum, the
State of Georgia should suspend the tax credit program until such time when there are
surplus revenues in the state treasury by which to finance a more honest and open62
educational experiment that offers a reasonable promise of success without denying state
funding to existing accountable programs of public education.  

If the state government decides to retry this kind of educational experiment in the
future, it should completely revamp the law and the program. One good place to begin
would be to consider the changes that Governor Sonny Perdue proposed and supported
for the existing program in 2010 (see page 9). His proposal would provide a better chance
for a more effective educational outcome. In addition, the neighboring state of Florida
offers an example of a tax‐credit educational program that has evolved and improved
over the last few years. As a public‐private venture, it has begun to require more effective
measures for public accountability and educational performance from all entities and all
private schools that take tax‐diverted funds to support student learning.  

Perhaps the best model for considering how to structure any future experiments in
school choice is already in the state. Today, in Georgia pre‐kindergarten, both public
schools and private centers deliver publicly financed education to four‐year‐olds across
the state under the same regulations and standards for accountability and educational

Improving education is vital to the future of all Georgians, and any significant
improvements in the coming years will require real changes and new choices in how and
where students learn. These changes inevitably involve a process of trial and error, as the
State of Georgia explores the best ways to improve education, especially for the state’s
neediest, most vulnerable children. But improving education in Georgia also requires the
state to recognize if and when a trial, in fact, has become an error.  
Georgia’s tax‐credit program for private school choice has failed the state’s
children and Georgia taxpayers. It is time to end—or vastly mend—Georgia’s failed
experiment in tax credit scholarships for private schools.

Public Money Finds Back Door to Private Schools, NYT, 5/22/12

posted May 25, 2012, 10:13 AM by Bill Duncan



When the Georgia legislature passed a private school scholarship program in 2008, lawmakers promoted it as a way to give poor children the same education choices as the wealthy.

The program would be supported by donations to nonprofit scholarship groups, and Georgians who contributed would receive dollar-for-dollar tax credits, up to $2,500 a couple. The intent was that money otherwise due to the Georgia treasury — about $50 million a year — would be used instead to help needy students escape struggling public schools.

That was the idea, at least. But parents meeting at Gwinnett Christian Academy got a completely different story last year.

“A very small percentage of that money will be set aside for a needs-based scholarship fund,” Wyatt Bozeman, an administrator at the school near Atlanta, said during an informational session. “The rest of the money will be channeled to the family that raised it.”

A handout circulated at the meeting instructed families to donate, qualify for a tax credit and then apply for a scholarship for their own children, many of whom were already attending the school.

“If a student has friends, relatives or even corporations that pay Georgia income tax, all of those people can make a donation to that child’s school,” added an official with a scholarship group working with the school.

The exchange at Gwinnett Christian Academy, a recording of which was obtained by The New York Times, is just one example of how scholarship programs have been twisted to benefit private schools at the expense of the neediest children.

....go to the Link for the rest....

Assessing the damage to education by 2012 Legislature, AJC, 3/30/12

posted Mar 31, 2012, 2:35 AM by Bill Duncan


Assessing the damage to education by 2012 Legislature

10:17 am March 30, 2012, by Maureen Downey

Joe Martin

Joe Martin

With the General Assembly wrapping up last night in its usual frenzy, school financing expert Joseph Martin sent me this op-ed this morning.

(He sent two copies, one with footnotes and one without. I am not including the footnotes here, but Martin has provided documentation for his figures. He is ready for the AJC Truth-O-Meter.)

Martin has been a longtime voice for public education; he was president of the Atlanta Board of Education, a leader on several state commissions, head of the Georgia School Funding Association and an unsuccessful candidate for state School Superintendent. And he helped design the current Georgia funding formula, Quality Basic Education, which, of course, has never been fully funded.

He has been called upon many times to testify at the Capitol on school financing. I think it is fair to say that Martin, a Democrat, is respected by members of both parties for his expertise.

By Joseph Martin

The State of Georgia is undermining our public schools. This may seem like an exaggeration, but the facts are clear. So, what really happened during the last session of the General Assembly?

The most heated issue was a fight over who gets to authorize charter schools, but this is still a distraction from the larger story. Nothing was done to reverse the steady erosion of state support to our schools over the last decade.

The reduction in school days, the additional furlough days, the increases in class sizes, and the cuts in programs will grow worse in the upcoming school year, especially since local systems can no longer rely on rising property taxes to cover the deficits in state funding.

State allotments to local systems are 26% less on a per-student, inflation-adjusted basis than they were ten years ago. Because of an unrealistic formula with another $1.1 billion in “austerity cuts,” a typical class is losing over $30,000 a year.

Some systems have been able to make up the difference from local resources, but most can’t. Moreover, the formula to assist the least wealthy systems in Georgia was quietly cut by 41% solely because “this is all we can afford.” The students in these systems will never catch up.

The State is systematically reducing its investment in our schools under the pretense that it doesn’t have enough funds, while the wave of tax cuts and exemptions never ceases. Our legislators cut taxes again this year without ever asking how the State will meet its obligations.

We are harming our children, sapping the vitality of our economy, and relegating our state to an inferior status. Three out of every ten students in Georgia are not graduating from high school with a regular diploma. Is this the path to a prosperous future?

It is essential to have capable teachers, effective leaders, active parents, and sound policies, but they do not replace the need for adequate resources. Georgia spends considerably less per student than the national average, and the only way to make further reductions is to decrease teacher salaries and increase class sizes. Administrative costs have already been slashed in most systems.

No sensible person would ever advocate spending more without expecting results, but it’s equally foolish to pretend that our schools can perform their vital mission without paying our teachers a reasonable salary, assisting the students who need extra help, and offering a full curriculum.

The concepts of “choice” and “flexibility” are touted as easy answers to the challenges facing our schools. Of course, parents should have more choices, and our schools should be freed from unnecessary regulations. But the real question is how to serve all of our students and not just some. Charter schools can be effective, but are not a substitute for improving all of our schools.

Some are calling for vouchers that would benefit the students who are accepted by private schools and can afford the tuition not covered by the voucher. Georgia taxpayers are already allowed to “divert” their tax payments to entities that support private schools, with no accountability or disclosure about who benefits.

Our state is slipping backward, and many of our children are not getting the education they need and deserve. Changes have to be made, but the need for adequate support by the State cannot be ignored. This is not a Democratic or Republican issue, nor is it an urban or rural issue. It is crucial to the future of our state. Do we really want good schools for our children?

–From Maureen Downey, for the AJC Get Schooled blog

Georgia School Voucher Bill Dead

posted Mar 9, 2012, 7:56 AM by Bill Duncan

Submitted by AUSCS on Mar 8, 2012
By Simon Brown

Another bad bill bites the dust! Lawmakers in Georgia tabled a measure yesterday that would have used taxpayer money to expand school vouchers for religious and other private schools.

SB 87 was a casualty of “crossover day,” which occurs on the 30th day of Georgia’s legislative session. For a bill to move forward, it must pass at least one legislative house by crossover day, otherwise it cannot be taken up until the next session at the earliest.

According to the Associated Press, GOP leaders have tried for years – mostly unsuccessfully – to expand the state’s voucher program. This particular bill was branded as an attempt to give “school choice” to military families and foster children, but in fact it was just another attempt to give more taxpayer money to religious schools.

Unfortunately there have been many misguided religious school aid bills springing up all over the United States of late, since some people just can’t resist the urge to funnel public money to religious interests.

As a result, Americans United has been very active on this front. This week alone, AU has taken on voucher (or neo-voucher) schemes in four different states.

Amanda Rolat, AU’s state legislative counsel, sent a letter to the Missouri House’s Elementary and Secondary Education Committee asking that the panel oppose a bill that would fund vouchers for special needs children.

“Backdoor vouchers for special needs students – like vouchers for all students – do not improve education,” Rolat said in her letter. “Students who leave the public schools with a backdoor voucher forfeit many of the protections provided to students under the Individuals with Disabilities Act.”

Rolat also sent a letter to the Illinois House’s Revenue and Finance Committee, asking that it not pass a measure that would create a tax credit for those who contribute funds to student assistance organizations.

“This tax credit will not decrease education costs,” she said. “Rather, tax money that would ordinarily go to public schools would instead pay the tax benefit, thus limiting the capacity of the public schools.”

Finally, Rolat sent a letter to the Maryland Senate Budget and Taxation Committee in the hope that it would oppose another bill establishing a tax credit for contributions to student aid organizations.

"Such a system simply fails low-income families," she wrote. "These backdoor vouchers would use taxpayers’ money to subsidize the education of only a small minority – only families with the money to cover the cost of the rest of the tuition, uniforms, transportation, books, and other supplies at private schools can benefit from this scheme."

An Americans United activist also offered testimony this week in an attempt to stop a Kansas voucher ploy. Vickie Sandell Stangl, president of AU’s Great Plains chapter, testified before the Kansas House Committee on Education and Budget that a proposed scheme to create yet another backdoor voucher program. It would, she said, be in violation of “the Kansas Constitution, [which] erects an absolute wall of separation, prohibiting public educational funds from flowing to sectarian education. “

Voucher legislation isn’t going away anytime soon, which is why the ever watchful eye of Americans United will remain alert as we try to stop these bad bills well before they become law.

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