New information from the Department of Revenue shows at least $4 million that should have gone to the Education Trust Fund in 2014 went, instead, to pay tuition for students already enrolled in private schools. While the law was intended to help “failing schools” and their students, more than 1,000 students in private schools got scholarships. This is allowable under the Alabama Accountability Act.
Under the Accountability Act, scholarship-granting organizations (SGOs) raise money from both individual and corporate contributors. When donors adhere to certain guidelines, they receive a dollar-for-dollar tax credit against their Alabama tax liability. Since the diverted funds would normally go to the state Education Trust Fund, any dollar received by an SGO is a dollar that is unavailable to be used to fund education needs.
Bottom line, in 2014 we took $4 million away from the Education Trust Fund and gave it to private schools to pay tuition and fees for students who attended that school for at least one year prior to getting a scholarship. Legislative leadership who rushed AAA through the House and Senate in 2013 never told the public that this would be one of the outcomes. Instead, we were told repeatedly that this law was only about “helping poor kids stuck in private schools by their zip codes.”
Records on file at the Department of Revenue’s website show the Alabama Opportunity Scholarship Fund, LLC (AOSF) created by former Governor Bob Riley gave 725 scholarships to private school students. Scholarships for Kids, Inc. of Birmingham handed out 320 of them and AAA Scholarship Foundation, Inc. of Prattville funded 21 (which was 70 percent of their scholarships).
If you multiply the number of scholarships by the average scholarship amount for each SGO you learn that as much as $4,431,897 may have gone to private schools for previously enrolled students.
We also learn that AOSF gave out more scholarships in Mobile County than any other. The primary target for Scholarship for Kids was Jefferson County, while AAA Scholarships and Beacons of Hope were most active in Montgomery County. (Beacons of Hope did not award any scholarships to students already in a private school.)
Another bit of information that catches one’s eye is the amount spent by AOSF in 2014 on “non-scholarship expenditures.” The Alabama Opportunity Scholarship Fund spent $805,190 while only collecting $652,390 in donations.
An annual audit by the firm of McGladrey of Step Up for Students, the Florida SGO that controls AOSF, shows the Alabama group spent $522,282 on salaries and wages and $387,036 on recruiting and advertising by June 30, 2014.
Even though supporters of the accountability act continue to claim it was intended to help failing schools and their students, it has long been acknowledged that a large number of scholarship recipients were not from these schools. The new information is the most specific look to date at how far this legislation has strayed from its original stated purpose.
And you can’t help but wonder if the 22 senators and 51 house members who supported AAA bill in 2013 would have changed their votes had they been told they were voting to take $4 million from public schools to give to students already attending private schools.
The 2013 version of this bill capped SGO contributions at $25 million. However, Senate Pro Tem Del Marsh got an amendment passed in the recent session to raise the cap to $30 million. So more money will be lost to public education, and if the past is prologue, even more money will leave the education trust fund to support students who are already attending private schools.
It should also be noted that the amendment passed by Senator Marsh actually rewrites the intent of the bill. In 2013 bill language clearly says it is about failing schools and their students. This has now been changed to say that the bill is about “school choice.” In other words, two years after saying one thing, the sponsor finally admits all the talk about helping failing schools was really not true. And we are supposed to place our confidence in this kind of leadership?
Larry Lee led the study, Lessons Learned from Rural Schools, and is a long-time advocate for public education. Contact Lee at email@example.com and read his blog at larryeducation.com.