failed experiment-sef full report
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8/6/2019 Failed Experiment-SEF Full Report
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SEFS I N C E 1 8 6 7
THE SOUTHERN EDUCATION FOUNDATION
135 Auburn Avenue, NE, 2nd Floor Atlanta, GA 30303
www.southerneducation.org
GeorgiasTax Credit
Scholarships for
Private Schools
A FailedExperiment
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THESOUTHERNEDUCATIONFOUNDATION
TheSouthernEducationFoundation(SEF)isanonprofitorganizationcomprisedofdiversewomen
andmenwhoworktogetherto improve thequalityof lifeforallof theSouthspeople through
better and more accessible education. SEF advances creative solutions to ensure fairness and
excellenceineducationforlowincomestudentsfrompreschoolthroughhighereducation.
SEFdevelopsand implementsprogramsof itsowndesign,servesasan intermediary fordonors
who want a highquality partner with whom to work on education issues in the South, and
participates as a public charity in the world of philanthropy. SEF relies on contributions from
foundations,corporations,andindividualstosupportitsefforts.
SEFSVISION
SEF seeks a South and a nation with a skilled workforce that sustains an expanding economy,
where civic life embodies diversity and democratic values and practice, and where an excellent
educationsystemprovidesallstudentswithfairchancestodeveloptheirtalentsandcontributeto
thecommongood.Wewillbeknown forourcommitmenttocombatingpovertyand inequalitythrougheducation.
SEFsTIMELESSMISSION
SEF develops, promotes, and implements policies, practices, and creative solutions that ensure
educational excellence, fairness, and high levels of achievement for all students. SEF began in
1867asthePeabodyEducationFund.
CREDITS
Steve Suitts, SEF Vice President, developed and wrote this report with Katherine Dunn, SEF
Program and Research Fellow, who was chief investigator for the study. Dorian Woolaston,
Program Assistant, helped to retrieve and format statistical data. Cynthia Blakeley was copy
editor.
2011SouthernEducationFoundation,Inc.,Atlanta,Georgia
Allrightsreserved.
PrintedintheUnitedStatesofAmerica.FirstEdition.
Portionsofthisworkmaybereproducedwithoutpermission,providedthatacknowledgementisgiventotheSouthern
EducationFoundation.Limitedpermissionisalsograntedfor largerportionstobereproducedbynonprofitandpublic
agencies and institutions only, solely for noncommercial purposes so long as acknowledgement to the Southern
Education Foundation as the source is prominently given. Reproduction or storage in any electronic form for any
commercialpurposeisprohibitedwithouttheexpresswrittenpermissionoftheSouthernEducationFoundation.
Theelectronicversionisavailablewithoutchargeatwww.southerneducation.org.
http://www.southerneducation.org/http://www.southerneducation.org/http://www.southerneducation.org/http://www.southerneducation.org/http://www.southerneducation.org/http://www.southerneducation.org/http://www.southerneducation.org/http://www.southerneducation.org/http://www.southerneducation.org/http://www.southerneducation.org/ -
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TABLEOFCONTENTS
ForewordbyKentMcGuire,President,SouthernEducationFoundation 04
Introduction 06
Background 08
Public
Accountability
for
the
Use
of
Tax
Funds
11
FailurestoComplywiththeLaw 14
Sidebar:GeorgiasScholarshipTaxCreditLawIgnoresLessonsofOtherStates 22
AccountabilityforTaxFundedEducationPerformance 23
IncomeandTaxFundedPrivateSchoolScholarships 28
Sidebar:ApplesandOranges:AdjustedGrossIncome(AGI)andCensusIncome 31
RaceandTaxFundedPrivateSchoolScholarships 36
ReligionandTaxFundedPrivateSchoolScholarships 41
FiscalImpactofTaxFundedPrivateSchoolScholarships 48
Observations,Conclusions,andRecommendations 59
Appendices
Appendix
1:
Financial
Summary
of
Georgia
SSOs:
20082009
63
Appendix2:SSOAffiliatedSchoolsIssueswithEligibleSchoolRequirements 64
Appendix3:IssuesonthePurposeofEnrollinHB1133 65
Appendix4:SSOs&SSOAffiliatedSchoolswithIssuesConcerningEligibleStudents 67
Appendix5:SSOScholarshipCostsperStudent:20082009 69
Appendix6:Methods,Assumptions,andCalculationsofthisStudy 70
Appendix7:GeorgiaGOAL:ACaseStudyintheHazardsofVoluntaryDisclosure 72
Appendix8:BriefHistoryofGeorgiasPrivateSchoolsinOpposingDesegregation 76
SelectedBibliography 79
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FOREWORD
TheSouthernEducationFoundation(SEF)beganareviewin2009ofanewGeorgia
lawprovidingtaxcreditscholarshipsforstudentstoattendprivateschools.Weoriginally
consideredusingthe lawtoestablishourownstudentscholarshiporganization (SSO)to
providelowincomeandminoritystudentsinpoorlyperformingpublicschoolsinGeorgia
withopportunitiesforabettereducation.Earlier,inOctober2008,SEFhadinvitedGerald
Robinson,atthattimePresidentoftheBlackAlliance forEducationalOptions (andnow
Virginia Secretary of Education) to make a presentation to our board of trustees about
publicandprivatealternativesfor improvingAfricanAmericaneducation inK12schools
acrosstheSouth.
These considerations led SEF to examine thepotentialofGeorgias new law, HB
1133,inaddressingthecriticalquestionofhowtoimprovetheeducationalperformance
oftheSouthsnew,diversemajoritylowincomestudentsandstudentsofcolorwhohad
become a numerical majority of the regions public school children in 2009.1 SEF has a
long history of support of effective public schools forall students in theSouth,butour
commitmentacrossthedecadesalwayshasbeentothechildrenthemselvesespecially
low income and minority childrenrather than to any tradition or method for how or
wherestudentscouldbewelleducated.
ThemoreSEFscrutinizedtheGeorgialawontaxcreditscholarships,themoreour
inquirybegantoraiseseriousquestionsandconcernsaboutthelegislationspotentialfor
worsening educational practices, for diverting and diminishing resources for the states
neediest, most vulnerable children, and for creating a dual system of publicly financed
education that might enlarge inequities as much as create good, fresh options for
individualstudents.
Aftercarefulconsideration,SEFsprogramcommitteerecommendedtoourboard
oftrusteesthattheSEFstaffforegoestablishinganSSOandinsteadundertakeastudyof
the lawand its implementationduring itsearlyyears.Thenandnow,weseethe lawon
tax credit scholarships as an important experiment in how the first state in the Deep
SouthwouldcarryoutthistypeofmajorpublicprivateventureinK12education.
1SeeADiverseNewMajority:StudentsofColorintheSouthsPublicSchools(Atlanta:SouthernEducationFoundation,
2010).
http://www.southerneducation.org/showTeaser.asp?did=618http://www.southerneducation.org/showTeaser.asp?did=618http://www.southerneducation.org/showTeaser.asp?did=618http://www.southerneducation.org/showTeaser.asp?did=618http://www.southerneducation.org/showTeaser.asp?did=618http://www.southerneducation.org/showTeaser.asp?did=618http://www.southerneducation.org/showTeaser.asp?did=618http://www.southerneducation.org/showTeaser.asp?did=618http://www.southerneducation.org/showTeaser.asp?did=618http://www.southerneducation.org/showTeaser.asp?did=618http://www.southerneducation.org/showTeaser.asp?did=618http://www.southerneducation.org/showTeaser.asp?did=618http://www.southerneducation.org/showTeaser.asp?did=618http://www.southerneducation.org/showTeaser.asp?did=618http://www.southerneducation.org/showTeaser.asp?did=618http://www.southerneducation.org/showTeaser.asp?did=618http://www.southerneducation.org/showTeaser.asp?did=618http://www.southerneducation.org/showTeaser.asp?did=618http://www.southerneducation.org/showTeaser.asp?did=618http://www.southerneducation.org/showTeaser.asp?did=618http://www.southerneducation.org/showTeaser.asp?did=618http://www.southerneducation.org/showTeaser.asp?did=618http://www.southerneducation.org/showTeaser.asp?did=618http://www.southerneducation.org/showTeaser.asp?did=618http://www.southerneducation.org/showTeaser.asp?did=618 -
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ThisreportevidencestheindependentfindingsofourtwoyearstudyofGeorgias
experiment with taxfunded tuition grants for private schools. As the following pages
document, the law in its present form contains a numberof troubling features. It lacks
transparencyregardingcontributors,beneficiaries,andthecriteriabywhichscholarships
areawardedoreven thesizeand numberofscholarshipsawarded.Nor do the schools
involvedappeartobesubjecttoanyaccountabilityregardingtheacademicstandards in
force or academicoutcomes of their students. There are no income limits for eligibility
and, in the absence of a mandate to report demographic information on participating
students, it is difficult to see how the program is meeting its stated policy objective of
increasingtheaffordabilityofprivateschoolsforlowincomefamilies.
And if helping parents make informed choices between public and private
education isan impliedgoal,thenbothcollecting informationfromparticipatingschools
andprovidinginformationtoparentsabouttheseschoolswouldbeanimportantfeature
in a welldesigned tax credit law. This of course presumes that using tax subsidies to
supportprivateschoolsisgoodpublicpolicy.
Itisalsoclearthatthelackofanymeaningfulreporting,regulation,orsupervision
abouthowfundsareraisedandscholarshipsawardedhas ledtoafailureonthepartof
somestudentscholarshiporganizationsandsomeaffiliatedprivateschoolstofollowbasic
rulessetoutinthelaw.
Iencourageyoutoreadthisreportinitsentiretyasyouconsiderboththemerits
of the idea of education tax credits and the design of Georgias current tax credit
legislation.
KentMcGuire
President
SouthernEducationFoundation
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INTRODUCTION
Georgia isoneofsevenstatesthatcurrentlyallowtaxcredits forscholarshipsto
private schools.2Georgias lawwasenacted inMay2008 inorder toassist low income
students transfer out of low performing public schools.Operationsunder the new act
began in late 2008. The lawpermits taxpayers inGeorgia to reduce their annual state
taxes
up
to
$2,500
on
joint
returns
when
they
contribute
to
a
student
scholarship
organization (SSO),whoprovides scholarships toprivateschool students.Acorporation
mayeliminateitsGeorgiataxesbyasmuchas75percentoftotalliabilitywhenitusestax
creditstocontributetoanSSO.
ForeverydollarprovidedtoanSSO,aGeorgiataxpayerreduceshisownstatetax
liability by a dollar and diverts that dollar from state tax revenue. The Georgia law
currentlylimitsthetotalamountofstatewidetaxcreditsinanyonecalendaryearto$50
million.Duringthe lastthreeyears(July2008through2010),atotalof$72.1millionhas
been diverted from Georgias state revenues as a result of these tax credits for
scholarshipstoprivateschoolsinthestate.
$6.6
$24.2
$41.3
$0
$10
$20
$30
$40
$50
2008 2009 2010
Millions
PublicCostsofGeorgiaTaxCreditScholarships
ForPrivateSchools:20082010
Source:GeorgiaDepartmentofRevenue
Moststudentscholarshiporganizations inGeorgiaallowtaxpayerstodesignatea
private
school
to
receive
their
tax
diverted
scholarship
funds.
Otherwise,
the
SSOs
use
tax
credit funds for grants to the private schools of their choice. In turn, private schools
distributetaxfundedscholarshipstothestudents. Inlate2008,theGeorgiaDepartment
2 The other six states are Arizona, Pennsylvania, Florida, Rhode Island, Iowa, and Indiana (in order of adoption).
Oklahoma will begin a tax credit program for educational improvement in late 2011. In the 20082011 legislative
sessions,atleast25stateshadlegislationintroducedfortaxcreditscholarships,including8additionalSouthernstates.
Foranationalreviewoftaxcreditscholarshipsandtheiremergenceinrecentyears,seeKevinG.Welner,NeoVouchers: TheEmergenceofTuitionTaxCreditsforPrivateSchooling(Lanham,MD:Rowman&Littlefield,2008).
ThreeYearTotal:$72.1Million
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ofEducationlistedfewerthan10SSOsregisteredtosolicitfundsforstudentscholarships
toprivateschools.AsofDecember31,2010,thatnumberhadgrownto32SSOs.
By Georgia law, in order to operate as an SSO, a group must: 1) be a lawful,
charitable organization located in the state; 2) register with the state department of
education;3)allocateorobligatenolessthan90percentofitsrevenuestomorethanone
private school for funding student scholarships; and 4) have an annual CPA audit and
financialreportsenttotheGeorgiaDepartmentofRevenue.SSOsfilloutachecklistfrom
the Georgia Department of Education on which they affirm that they meet the
requirementsof thestate law and are afterwards listedon the education department's
approvedlistofSSOs.
Approximately370privateschoolshadaffiliatedwithoneormoreSSOsbytheend
of2010.3MorethanhalfoftheseSSOaffiliatedprivateschoolswerelocatedinonlyfive
Georgiacounties:Fulton,Cobb,DeKalb,Chatham,andGwinnett.Attheendof2010,two
thirdsoftheprivateschoolsaffiliatedwithanSSOtoreceivetaxcreditscholarshipswere
inonlynineofGeorgias159counties.
Acrossthestate,almost199,000studentsattendedprivateschools in2009one
outofevery10schoolchildreninGeorgia.
Source:SEFResearch
3AnSSOaffiliatedschoolisaprivateschoolassociatedwithaGeorgiaSSOinordertoreceivetaxcreditscholarships.
ThereisnocompletelistingofprivateschoolsaffiliatedwithregisteredSSOsinGeorgia.SomeSSOspublishalistofthe
affiliatedschools.Othersdonot.SEFusedavarietyofresearchmethodstoidentifyallSSOaffiliatedschoolsinthestate
(seeAppendix6).NodoubtthenumberofschoolshasgrownsinceDecember31,2010.
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BACKGROUND
Georgias tax credit scholarships for private schools were established with the
passage of House Bill 1133 in the 2008 session of the Georgia General Assembly. State
Representatives David Casas and Earl Ehrhart and former State Senator Eric Johnson
introducedandchampionedthe legislationasawaytoprovideschoolchoicetoGeorgia
parents
and
students
for
whom
private
schools
were
inaccessible
due
to
cost.
Duringcommitteedeliberations,Rep.Casassaidthebillwouldhelpparentswho
cant afford private education, such as those struggling in Clayton, DeKalb, and other
countieswhowant to leaveunderperformingpublicschools.Casasalsoarguedthatthe
bill would improve public schools without costing taxpayers more money. He cited a
study by the Friedman Foundation for Educational Choice of Indianapolis. It concluded
thattheproposedlawwouldsaveGeorgiasstateandlocalgovernmentsacombinedtotal
of nearly $100 million annually based on the transfer of almost 15,000 students from
publictoprivateschools.Rep.Casasmaintainedthat"thousandsofstudentswouldtake
theseprivatelyfundedscholarshipsandtransfertoprivateschools, leavingahostoftax
moneyavailableforpublicschoolstoimprovetheirperformance.
OntheflooroftheHouse,Rep.Ehrhartcalledthebilloneofthemostinnovative.
. .greatestthings . . .forthechildrenofGeorgiasince itprovidestheopportunity for
childrentohavechoicesineducation.HeinformedcolleaguesthatFlorida,Pennsylvania,
Rhode Island, and Arizona had passed similar legislation. He too quoted the Friedman
Foundations conclusion that Georgia public education could save nearly a hundred
milliondollarseachyear ifthebillwerepassed.Praisedbysponsorsasaplanfor lower
income schoolchildren to get out of shoddy public schools, the legislation passed the
lowerhouseinarollcallvoteof92to73.
In the State Senate,Sen. Johnson spoke onbehalf of the bill onApril 1. He said
thattheonlybeneficiaryoftheproposedlegislationwouldbethosewhocantafford
tobe inprivateschoolandwant tobe.Heexplained thatthebillwouldnothelpthe
rich because they could already afford private schooling and would not seek the tax
credit scholarships. The bill passed the upper chamber by a vote of 32 to 20, and
GovernorSonnyPerduesignedHB1133intolawonMay14,2008.
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Inthe followingyear,during the2009 legislativesession,Rep.Ehrhart4andRep.
Casas introducedabilltomakeseveralchanges intheSSO law. Itproposedprimarilyto
eliminate any limits on the amount of tax credits an individual taxpayer could take by
contributingtoanSSO,solongastheamountdidnotexceed75percentofthetaxpayers
totalstate tax liability. In addition, thebillwouldhaveadded freestanding,privatepre
kindergarten programs as eligible schools and would have made all information and
reports provided by student scholarship organizations to the Georgia Department of
Revenue confidential taxpayer informationsubject tocriminal misdemeanorpenalties
fordisclosure.
The bill passed both houses of the General Assembly but was vetoed by Gov.
PerdueonMay11,2009.Inhisvetomessage,Gov.Perduestated,Iagreethatchanges
areneededtotheoriginalstudentscholarshiporganization lawand IsupportedHB394,
whichwouldhaveenactedthechangesIbelievearenecessary.
HouseBill394,the legislationGov.Perduehadhisfloorleaderssponsor,wouldhave
implementedsweepingreformsinthecurrentSSOlaw.Itwasdesignedto
restrictscholarshipstostudentswhocoulddocumentthattheyhadbeenenrolledin a Georgia secondary or primary public school for at least one year and were
eligibleforafreeorreducedpricelunch;
requireSSOstoallocate97percentofannualrevenuetoscholarships; mandatebackgroundchecksonSSOownersandoperators; prohibitanowneroroperatorofanSSOfromalsobeinganowneroroperatorofa
qualifiedschooleligibletoreceivescholarshipmonies;
require SSOs to report annually to the Georgia Department of Education on thenumberofstudentsreceivingscholarshipsandtheschoolsinwhichsuchstudents
areenrolled;
restricttheamountofanSSOscholarshipinasingleacademicyeartotheaverageamountthestateprovides in itsfundingformula forafulltimestudent inpublic
schools;and
require each school in which a student receives an SSO scholarship to select anationally normreferenced test approved by the State Board of Education,
administer annually such test to each scholarship student, and report yearly on
resultsofthenormreferencedtesttotheDepartmentofEducationinaccordance
withitsrulesandregulations.
GovernorPerduesbilldiedinaHouseCommitteeduringthe2009legislativesession.
4Betweenthe2008and2009legislativesessions,Rep.EhrharthelpedtoestablishanSSO,theGeorgiaChristianSchools
ScholarshipFund,whereheremainsanofficerandamemberofathreepersonboardofdirectors.Rep.Ehrhartisalso
ontheboardofdirectorsofoneoftheChristianprivateschoolsaffiliatedwiththeGeorgiaChristianSchoolsScholarship
Fundtoreceivemoniesforstudentscholarships.
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OnFebruary22,2011,Rep.EhrhartandRep.CasasintroducedHouseBill325,ina
renewaloftheirattemptstoalterGeorgiasexistingprivateschoolscholarship law.This
new bill proposed, among other things, to increase the current funding cap on the tax
creditprogramfrom$50millionto$62.5millionandtoautomaticallyincreasethefunding
capby25percentafteranyyear inwhichSSOtaxcreditsreachedanamountwithin10
percentoftheexistingcap.Inaddition,thebillproposedtoremoveincomelimitsonSSO
taxcredits for individualsandmarriedcouples,up to75percentof their totalstate tax
liability.
These specific provisions were stripped away by the House Ways and Means
Committee after a hearing in which members cited a sluggish economy and lingering
concernsaboutstaterevenues.IntheStateSenateFinanceCommittee,however,Senator
ChipRogersrevivedtheprovisioninHB325thatprovidedanautomaticincreaseinthe
ceilingontaxcredits.
On the last day of the 2011 session, the Georgia General Assembly passed a
revisedversionofHB325.Thelawprimarilyremovestheannualcapof$50milliononthe
amount of tax funds diverted from the state treasury for private school scholarships. It
automaticallyincreasestheceilingeveryyearforthenextnineyearstoreflectgainsinthe
consumerpriceindex(CPI).HB325alsomakesitacriminalmisdemeanortodiscloseany
informationreportedtotheGeorgiaDepartmentofRevenuerelatingtotaxpayers,SSOs,
and private schoolsexcept for tallies on the total number and amounts of tax credits
used and the total number and dollar value of all scholarships awarded. Disclosing or
publishinganythingelseincludingtheresultsofanSSOsCPAauditwillbe illegaland
punishablebycriminallaw.
Thenewlawalsoaddsprivateprekindergartenprogramstothoseschoolseligible
fortaxcreditscholarshipsandlimitstheamountofeachscholarshipfundedbytaxcredits
totheamountofthepublicschoolsperpupilexpenditurefromstateandlocalfundingin
Georgia.
GovernorNathanDealsignedthebillonMay12,2011,andthenewprovisions
becomelawonJuly1,2011.
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PUBLICACCOUNTABILITYFORTHEUSEOFTAXFUNDS
Thereisalmostnopublicrecordcurrentlyavailableabouthowthelawauthorizing
taxfundedscholarshipsforprivateschoolsisoperatinginGeorgia.Thestatedepartment
ofeducationmaintainsonitswebsitealistofSSOsbutnothingmore.ItrequiresanSSO
tofilloutacheckoffsheettoregister.Attheendof2010,eightofthe32listedSSOsdid
not
have
a
website,
and
10
SSOs
had
only
a
post
office
box
for
their
location.
The Georgia Department of Revenue receives annually a certified public
accountantsauditofeachSSOsfinancesandareportfromeachSSOthatincludesalist
ofdonorsandtheamountsoftheirtaxcredits.AsofJuly1,thedepartmentisauthorized
topublishalistofdonors,talliesonthetotalnumberoftaxpayerswhousedtaxcredits,
the total amount of the tax credits, and the total number and dollar value of all
scholarships awarded. The disclosure of any other information, including the financial
auditoftheSSOsoperations,willbeacriminaloffense.
The SSO law also fails to authorize the department to collect any information
abouttheprivateschoolsorstudentsreceivingthetaxfundedscholarshipsandprohibits
the revenuedepartment from requiringSSOs to provide anyadditional informationnot
expresslyauthorizedbythe law.A listofSSOs isalsosubmittedannuallytotheGeorgia
GeneralAssembly.
Asaresult,thereisnopublicinformationaboutthefollowingcriticalcomponents:
SSOcontributorsusingstatetaxdollarstosupportprivateschoolscholarships; privateschoolsreceivingtaxfunds,whichSSOsawardthemthefunds,orthe
amountoftaxdivertedfundseachprivateschoolisreceivingfromanSSO;
theamountornumberofscholarshipsthatprivateschoolsorSSOsdistributetostudentswithSSOfunds;
whichstudentsreceiveprivateschoolscholarshipssupportedbytaxcreditsorthestudentscharacteristics;or
thecriteriaandprocessesthatdifferentprivateschoolsorSSOsusetoawardtaxfundedscholarships.
5
Georgia
alone
makes
it
a
criminal
offense
to
publicly
disclose
any
specific
informationsubmittedbySSOstothedepartmentofrevenue,anditistheonlystatethat
fails to require any real public accountability for the use of tax dollars to finance
scholarships.Ineachoftheothersixstateswithtaxcreditscholarships,theorganizations
5AfewSSOsestablishedinlate2009and2010awardscholarshipsdirectlytostudentsinsteadofpermittingprivate
schoolstoawardthescholarships.AreteScholarsFund,theStudentScholarshipFoundationofGeorgia,andAAA
ScholarshipFoundationappeartofollowthispractice.
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and/or schools receiving contributions through taxpayer funding must provide detailed,
adequateinformationsothatastateagencycanreportpubliclyontheoperationsofthe
taxfinancedscholarshipprogram.
TheGeorgialawrequiresSSOstoobligatenolessthan90percentoftheirannual
revenueforscholarshipsandtooperatelawfully,butthereisonlyaverylimitedamount
of information that the law permits the department of revenue to require in order to
investigate issues of unlawful conduct and to assure an SSOs compliance. In most
respects,Georgias law isdesignedprimarilytowatchdogthehonestyoftaxpayersnot
theSSOs.TheforemostregulatoryfunctiontheGeorgiaDepartmentofRevenuecancarry
outwiththeauthorityandinformationithasbeengrantedbytheSSOlawisnothingmore
thantoassurethattaxpayerswhoclaimareductioninstateincometaxesunderthislaw
havemadepaymentsofthesameamounttoaregisteredSSO.
By way of contrast, the Arizona Department of Revenue issues an annual public
report identifying each scholarship organizations number, the amount of contributions
received, and the number and amount of scholarships it has provided private schools
from both its corporate and individual tax credit programs. These public reports also
identifyeachprivateschool inArizonathatreceivestaxcreditscholarshipfundsandthe
numberandamountofthescholarshipsthateachschoolawards.
PublicReportsonArizonaStudentScholarshipProgramExcerptsfromIndividualDonorsProgram
Source:ArizonaDepartmentofRevenue
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Rhode Islands Division of Taxation makes a similar annual public report for the
activitiesofeachstudentorganizationthatallocatestaxcreditfundsforscholarships.The
state reports also identify the zip code of each student who receives a tax credit
scholarshipandtheamountofthescholarship.
InFlorida,thistypeoffinancialreportingisonlythebeginningofitsinsistencethat
studentscholarshiporganizationsandtheiraffiliatedprivateschoolsmustbeaccountable
for public funds. All student scholarship organizations must provide the Florida
DepartmentofEducationwiththefollowinginformationfourtimesayear:
demographic information for each student, including name, date of birth,socialsecuritynumber,gradelevel,gender,race,parentsname,andaddress;
informationonthestudentsschoolofattendance,includingtuition,fees,andtransportationamounts;and
theamountofeachstudentsscholarship.Florida also mandates that private schools complete an annual survey and to publicly
release scores of standardized tests administered by an independent research
organization,if30ormorestudentsreceiveataxcreditscholarship. Basedontheseand
otherdata,theFloridaDepartmentofEducationpreparesandpublishesquarterlypublic
reportson the tax credit scholarship program, its schools, and itsstudents. Floridaalso
requiresafullannualpublicreport.
In Georgia, none of this information about the states taxfinanced scholarship
program is required or available, and most SSOs and private schools eligible to receive
SSOscholarshipfundshavefailedtovoluntarilyprovidesuchpublicinformationaboutthe
use of tax funds. Except for the Georgia Greater Opportunities for Access to Learning
(GOAL) scholarship program, no student scholarship organization in Georgia has made
publiconawebsiteorinanyotherpublicforumspecificinformationaboutcontributions,
expenditures, SSO grants to students or schools, or the schools scholarships and the
students who receive them. The schools also have published no detailed, meaningful
information
about
their
SSO
supplied
funding
or
the
students
who
have
received
tax
creditscholarships.
Despite extensive efforts, the Southern Education Foundation was unable in the
fall of 2010 to convince a single SSO in Georgia to voluntarily complete all or even a
substantialportionofanSSOsurveyontaxcreditfunds,schools,oroperations.SEFalso
surveyed 67 private schools that were affiliated with an SSO. They were asked to
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complete a oneandahalfpage survey. Only nine schools answered all or most of the
surveyinwriting,andtwooftheninerepliedonlythattheyhadnotyetreceivedmonies
for taxfunded scholarships. Several schools refused any discussion when asked in a
followuptelephonecall.Oneschoolheadmasterdiscussedtheprogramingeneralterms
andwiththestipulationthattheconversationbeofftherecord.6
FAILURESTOCOMPLYWITHTHELAW
Theneartotal lackofdisclosureandoversighthascreatedanarrayof issuesand
questionsrelatingtowhetherSSOshavecompliedwithbasicprovisionsofGeorgiastax
creditscholarship law.Theseproblemsappearto implicatetheconductofalmostevery
SSOthatoperatedduringthefirstthreeyearsofthelaw.TheapparentfailuresofSSOsto
complywiththelawrelateto:
Studentseligibleforscholarships Schoolseligibleforscholarships Spendingrequirements Civilrightscompliance Limitingscholarshipstooneschool
EligibleStudents
TheGeorgia lawonprivateschooltaxcreditsstipulates thatastudent iseligible
forascholarshiptoaprivateschoolonly ifheorsheisaGeorgiaresidentenrolledina
Georgiasecondaryorprimarypublicschooloreligibletoenrollinaqualifiedkindergarten
program
or
pre
kindergarten
program.7
Several SSOs and many private schools have decided that the law requires only
thatastudentenrollnotactuallyattendapublicschooltobeeligibleforascholarship.
ThispracticebecameevidentInAugust2009whentheAtlantaJournalConstitution(AJC)
reportedthatparentsandstudentsattendingprivateschoolswereshowingupatpublic
schoolstofilloutpaperworktoenrolltheirkidsinpublicschoolssolelytoqualifyforthe
taxfunded scholarshipswith no intention of actually attending classes in the public
school.8
The
news
story
did
not
determine
how
widespread
the
practice
had
become
but
identified three school districts reporting the local practice by parents. The newspaper
6TheSEFquestionnairewassenttoallSSOsinGeorgiabyemailandbyUSPostalService.Thesurveywasfollowedupby
telephone callsandadditionalemails overa period of eight weeks. One SSO executiverespondedgenerallytoa few
questions inthesurvey. A Seventh Day Adventistrepresentative gave thenumberandamount of itsscholarships by
phone.7SeeCodeofGeorgia,sections202A1(1).
8AtlantaJournalConstitution,August9,2009.
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alsofoundofficialsattwoprivateschoolswhoadmittedthatsomeoftheirstudentswere
usingthestatelawsloopholetoreceivetaxfundedscholarships.
State Rep. Earl Ehrhart, one of the laws sponsors, told anAJC reporter that he
thought it was legal for parents to use this loophole but described use of it as an
anomaly. There is no conspiracy there. In December 2009, however, at a meeting
sponsored by the Georgia Student Scholarship Organization (GASSO), State Rep. David
Casas, another sponsor of HB 1133, told parents how Killian Hill Christian School in
GwinnettCountyhadreceived$85,000 inSSOscholarshipstohelpkeepstudents inthe
privateschoolnottohelpnewstudentstransferfrompublicschools.9
Inaddition,inavideotapeofthesamemeetingthathassincebeenusedatother
GASSOmeetings,Rep.Casas informsprivateschoolparentsthatasasponsorofthe law
hedeliberatelyspecifiedenroll insteadofattend inHB1133 inordertoensurethat
taxcreditsubsidieswouldsupportstudentsalreadyinprivateschools.Rep.Casasstates:
Some people felt a little bit weird about that; felt it was a little
dishonest that theywould take theirchild,enroll them inapublic
schoolandnothavethemactuallyattend,butallofasuddenthey
actuallyqualifyforascholarship.Imtellingyou,wedeliberatelyput
thewordinginthereforthat.10
Rep.Casastapedassertion isanadmissionofadeliberatedeceptiononthepart
of a public official andan overtcontradictionofhisown public statements madewhile
seekingsupport forthe legislation in2008.OnhisownwebsiteonMarch4,2008,Rep.
CasasissuedapressstatementsayingthattheGeorgiaHouseisconsideringlegislationto
permittaxcreditsworthupto$50millionannuallyto fundscholarships forstudents to
transfer from public schools to private schools. It would help parents who cant afford
private education, such as those struggling in Clayton, DeKalb, and other counties who
want to leave underperforming public schools (emphasis added; see Appendix 3 for
documentation).
Rep.
Casas
assertion
about
the
true
meaning
and
intention
of
the
term
enroll
also belies the public statements of civic leaders who were among the primary public
supporters of HB 1133. On March 19, 2008, for example, Georgia Family Council Vice
9SeethisversionofthevideotapeofRep.Casasremarksat:
http://www.youtube.com/watch?v=Yx2GxjGpWcw&feature=player_embedded#at=440,(accessedFebruary1,2011).10
ThisversionofRep.CasasremarksisnotpubliclyavailablebutisapparentlyusedbyGASSOonlyatmeetingsin
privateschools.SeeAppendix3foratranscriptofRep.CasasremarksaboutthetermenrollinHB1133fromthis
versionoftheGASSOvideotapeandhisearlierstatementsaboutthepurposeofthelegislation.
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President Eric Cochling wrote in a newspaper column that these scholarships are
availableonlytostudentscurrentlyinpublicschoolssotheclaimthattheywillbenefit
onlystudentsalreadyinprivateschoolissimplywrong.11
Despite Rep. Ehrharts assurance in the fall of 2009 about an anomaly, the
practiceofprivateschoolstudentsregistering inpublicschoolssolelyforthepurposeof
becomingeligibleforataxcreditscholarshipspreadin2010acrossatleasteightcounties,
where more than 42 percent of Georgias SSOaffiliated schools are located. Private
schoolsservingchildreninBarrow,Cobb,Gwinnett,Cherokee,Forsyth,Fulton,Glynn,and
LowndesCountieshaveencouragedandinstructedparentsofcurrentstudentsonhowto
enrollinbutneverattendapublicschoolinordertoreceivetaxfundedscholarshipsfor
theirprivateschooltuitioncosts.
The Ivy League Montessori School in Cumming, Georgia, told its families,
AccordingtotheGeorgia law,studentsmustbeGeorgiaresidentsenrolledinaGeorgia
secondaryorprimarypublicschool,thoughattendanceisnotrequired.Therefore,existing
andnewstudentsatILMScanenrollinpublicschoolsforthecountyinwhichtheyliveand
qualifytoreceivescholarshipmonies(emphasisadded).TheSt.SimonsChristianSchool
inGlynnCountyprovidedacopyofthepublicschoolregistrationformonitsownwebsite.
The school informed families that they can make their children eligible for an SSO
scholarshipiftheycompletetheStudentEnrollmentEligibilityFormandsubmititatthe
countyschoolboardregistrationoffice,which is intheannexbuildingbehindtheschool
boardoffice.
Covenant Christian Academy in Loganville instructed its parents that a student
mustbeaGeorgiaresidentenrolledasanonattendingstudentinaGeorgiaprimaryor
secondarypublicschool tobeeligible foranSSOscholarship.CornerstonePreparatory
Academy in Acworth also told its parents, Many of the state public school systems
(includingCobbCounty)haveestablishedaproceduretoenrollthesestudents,butnot
enter
them
into
the
student
information
system,
thus
avoiding
unnecessary
work
for
the
publicschoolstaff,knowingthestudentwillnotactuallybeattending.Whenyoucallfor
anappointmentorgointotheschooltoregister/enroll,pleaseexplainthatyouareusing
HB 1133 and bring all of the documents listed below which are necessary for school
11AtlantaJournalConstitution,March19,2008.
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enrollment(emphasisadded).12
SeveralSSOs,includingGASSO,haveencouragedandsupportedprivateschoolsin
their tactics to use tax credit funds to subsidize existing students tuition costs. One of
GASSOs directors, Robert Jasion, has recruited private schools and contributions to his
SSObysellingtheloophole inHB1133asalawfulmeanstousetaxdollarstosupport
privateschoolsexistingstudents.
Inhisprivateschoolpresentation,Jasiontypicallystartsbyshowingthefullversion
ofthevideotapeofStateRep.DavidCasasexplainingthetaxcreditsprogramasawayfor
citizenstospendtheirowntaxdollarsforprivateschooling.Ifnobodytakesthatcredit,
Rep.Casassaysonthevideo,we[theGeorgialegislature]willfindawaytospendit.In
addressingthe issueofenrollversusattend,Rep.Casasstatesthere isnoloophole,
thereisabsolutelynoloophole.Thatwasdeliberatelyputintheresothatprivateschool
childrencouldenrollinbutneverattendapublicschoolandtakeadvantageoftaxfunded
scholarships.
GASSOs Jasion also explains the difference between enrolling or registering a
studentatapublicschoolandattendingapublicschool.Heshowsprivateschoolparents
what a public school enrollment form looks like and lists on his PowerPoint slides the
contactinformationofastateemployeeoftheGeorgiaDepartmentofEducationwhohe
stateswillHelponEnrollinginthePublicSchools.
Atameetingwithprivateschoolparents,Jasionalsostated,
You saw David [Rep. Casas] in the video. He said he intentionally
wrote that word enrolled in there. What does enrolled mean?
Well,Davidsitsontheeducationcommitteeandhehelpswritesthe
laws for the Department of Education, and he knew that DOE
defines enroll as the registration of a student in a local school
systemofresidence.
. . . [They] thought enrolled meant attend. Enroll means simply
registeringyourchild in the localpublicschoolsystem,nothaving
them
attend,
just
having
them
register.
Once
theyve
registered,
theyareeligibleforascholarshipaward.
GASSOs presentation notes that the SSO works with more than 100 private
schools inGeorgia (although theclaim cannotbe fullyverifiedsinceGASSO is theonly
12See Appendix 4 for a listing of private schools identified by SEF as instructing parents on how to enroll but not
attendpublicschools inordertobecomeeligiblefortaxcreditscholarships.This isprobablyonlyapartial listing.Two
SSOs,ALEFandGRACE,statethattheyrequiredocumentationofpublicschoolattendance.
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largeSSO inthestatethatdoesnotpublicly listthenamesof itsaffiliatedschools).The
one private school that Jasion identifies in his presentation is Cornerstone Preparatory
Academy,wherehisownchildrenattend.Itisoneoftheschoolsthatinstructitsparents
onhowtoenrollinpublicschoolstoreceiveataxfundedscholarship.
GASSOisnottheonlySSOencouragingprivateschoolstousethisrusetosupport
existing private school students. SEF has discovered that the Golden Dome Scholarship
Fund, Corporate Giving for Education, and the Parents Choice Student Scholarship
Organization are also registered SSOs working with private schools to use the enroll
languageinthestatelawtoprovidetaxcreditscholarshipstotheirexistingstudents.
EligibleSchools
Georgialawspecificallydefinesaprivatequalifiedschoolorprogrameligibleto
receive tax scholarships as a nonpublic primary school or secondary school that is
accreditedorisapplyingforaccreditationfromoneofsixprivateagenciesrecognizedby
Georgialaw.13
Inaddition,thelawstatesthattheschoolmustbelocatedinGeorgiaand
satisfiestherequirementsprescribedbylawforprivateschoolsinthisstate.Regulations
oftheGeorgiaDepartmentofRevenuealsorequireSSOstodeliverthepaymentofthetax
creditscholarshipsdirectlytoaqualifiedprivateschool.14
Some SSOs apparently have granted scholarships to students to attend schools
and programs that arenotqualified by lawas accredited,private primary or secondary
schools.Attheendof2010,itappearsthatthreeSSOaffiliatedschoolswerechildcare
orpreschoolprogramsunaccreditedbyanyofthestatesanctionedaccreditingagencies.
Thirtyone programs were accredited as nontraditional educational centersnot as
accredited primary or secondary private schools. Nine of these nontraditional
educational centers fail to meet the state laws definition of a private primary or
secondary school (see Appendix 2 for a list of the most questionable SSOaffiliated
schools). Most of these centers call themselves schools but appear to supplement and
13ThelawwasamendedbyHB325sothatasofJuly1,2011,qualifiedprivateprekindergartenprogramswillbeeligible
toreceiveprivateschoolscholarships.14
SeeCodeofGeorgia,sections202A1andRulesofGeorgiaDepartmentofRevenueTaxDivision,Chapter56078.
ThedefinitionofaprivateschoolintheCodeincludesarequirementfor180daysofinstruction,aminimumof4.5hours
ofinstructiononthosedays,andacurriculumthatcoversbasicareasofknowledgesuchasreading,mathematics,and
science.
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support homeschooling without the necessary curriculum or amount of organized
learningthatGeorgialawdefinesasaprivateschool.15
There are also 19 SSOaffiliated institutions that are accredited only as
educationalagencieswithspecialpurposesnotasprimaryorsecondaryschools.Sixof
the 19 educational agencies with special purposes do not appear to meet the legal
definitionofaprivateschool.Someoftheseagenciesservechildrenwithdevelopmental
needsandprovidetherapyasaprimarymethodofassistance.Othersarealsoonlypart
dayprogramsanddonotprovideaminimumof4.5hoursofinstructionasrequiredofall
qualifiedschools.
SpendingRequirements
ThelawinGeorgiarequiresanSSOtoallocateorobligate90percentofitsannual
revenue for scholarships to private school students. It permits up to 25 percent of this
amount(onefourthof90percent)tobecarriedoverintothenextfiscalyear.Ineffect,a
GeorgiaSSOmustdistributenolessthan67.5percentofitsrevenueforscholarshipseach
yearandmaycarryovernomorethan22.5percentofannualrevenueforscholarshipsin
futureyears.Theserequirementsleave10percentofannualrevenuesforadministrative
costs. The law clearly mandates that SSOs cannot hoard tax funds and must distribute
everyyearthevastmajorityofitsmoneyonstudentscholarships.16
Inthefirsttwoyearsofoperations(2008and2009),severalSSOsfailedtocomply
withthesebasicprovisionsofstatelaw.AccordingtotheirreportstotheInternalRevenue
Service(IRS),fiveSSOsreportedin2008combinedrevenuesofmorethan$4.6million
almost 70 percent of all scholarship tax credits taken that year in Georgia.17
These five
SSOsmade lessthan$1.4million inscholarshipgrantsorpayablegrants(obligationsfor
current or future scholarships)distributing only 30 percent of all revenues raised for
15Two SSOaffiliated private schools accredited by the Southern Association of Colleges and Schools (SACS) also use
whatiscalledtheuniversitymodeloflearning,wheretheschoolssimplyholdclassesonthreedaysaweekandforthe
otherfourdays leavestudentsunderthesupervisionofparents,whoareresponsibleforguidingtheirchildren inthe
completion
of
assigned
work.
This
innovation
is,
in
effect,
a
merger
of
traditional
schooling
and
homeschooling,
especiallyforyounglearners.16
SeeCodeofGeorgia,sections202A1and202A2.Initsannualstatisticalreportfor2008,theGeorgiaDepartment
of Revenue defines SSOs as taxexempt nonprofits that distribute at least 90% of their revenues forscholarships or
tuitiongrantstoallowstudentstoattendqualifiednonpublicschools(emphasisadded).SeeGeorgiaDepartmentof
RevenueStatisticalReport,FY2008,p.120.17As charitabletaxexemptorganizations,SSOs filean annual financial andoperational reporttothe federal Internal
Revenue Service (IRS). Federal regulations require these reports to be available for public inspection at the
organizations offices. These IRS 990 forms provide information on categories of annual income and expenses and a
balance sheet for the organization. The data on these federalreports cangenerally indicate if anSSO is spending 90
percentitsannualrevenueforscholarships.Typicallythefederalreportsarefiledatleast912monthsafterareporting
period.
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scholarships.TherecordsforthreeSSOs(GeorgiaGOAL,GeorgiaChristianSchoolsFund,
and Apogee Scholarship Fund) show they did not grant or obligate any funds for
scholarshipsin2008,althoughGOALraisedover$3.5millionandGeorgiaChristianraised
almost$269,000.
Forthecalendaryearof2009,federalrecordsareavailableforfourSSOs(GASSO,
Georgia Christian, Great SSO, and Georgia GOAL) that diverted at least $30,000 in tax
credits from the public treasury. These four SSOs generated a combined total of $15.1
million in diverted state revenue (nearly twothirds of that years total amount raised
fromstate taxcredits).But federaldocuments indicate that these fourSSOsgrantedor
obligated no more than $5.9 million for scholarshipsbarely 39 percent of all tax
revenuesthatthesefourSSOsdivertedforscholarships(seeAppendix1).
OnlyoneofthefourSSOs,GeorgiaSSO(GASSO),showsthatitdistributedatleast
twothirdsof its taxgenerated funds in2009as requiredbystate law.18
GOALs federal
recordsshowthatitobligatedordistributedinscholarshipsonly28percentofthe$10.6
millionitraisedin2009.Duringthesameyear,GOALsfederalreportshowsthatitspent
12.2 percent of its revenueabove the maximum of 10 percent allowed by lawon
administrativeandoperationalcosts.
49.1%
69.9%
56.5%
27.6%
0%
10%
20%
30%
40%
50%
60%
70%
80%
GeorgiaChristian GASSO GREATSSO GeorgiaGOAL
PercentofSSOTaxRevenue
SpentorObligatedforScholarships
2009
LawRequiresatleast67.5Percent
Source: IRSForm990
18 GASSOs methods of distributing tax credit scholarships raise important issues of compliance in another area. See
pages 1418. Also, in a report for July 2008 through June 2009, the ALEF Fund, an SSO established to support
scholarshipsatJewishschools,actuallyexceededthe90percentrequirementbyobligatingmorefundsforscholarships
thanALEFraisedthatyear.ItsIRSreportforthelatestyearisnotyetpubliclyavailable.
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Insummary,duringthefirsttwoyearsoftheoperationandfundraisingofGeorgia
SSOs,currentlyavailablefederalrecordsshowhow$19.7millionofatotalof$30.8million
intaxcreditswereused.Thesereportscapturenearlytwooutofeverythreedollarsoftax
moneydivertedtoSSOsforprivateschoolscholarshipsinGeorgiain2008and2009.Less
than$7.3milliononly37percentofthe$19.7millionwasdistributedormadepayable
asgrantsforscholarshipsduringthesetwoyears.
More than 57 percent of the $19.7 million in taxdiverted funds was carried
forwardfrom2008and2009into2010.Federalrecordsalsoshowthatanaverageof10.6
percent of SSO revenues from tax credits during these two years was spent on
administrationandoperations.Therefore,basedontheavailablefederalrecordsfor2008
and2009,mostofthetaxfundsdivertedbySSOswerenotused inaccordancewiththe
basicprovisionsofthetaxcreditlaw.
CivilRightsCompliance
Georgia law also requires private schools to comply with the Civil Rights Act of
1964,which inTitleVIoutlawsdiscriminationbasedonrace,color,ornationalorigin in
programs or activities.19
Unfortunately, the Student Scholarship Organization for Greek
AmericansinGeorgiaexpresslylimitsscholarshipstostudentsbasedonnationalorigin
proof of Greek ancestry. To receive an application for this SSOs scholarship, a student
mustdemonstrateoriginofGreekdescent.Asoftheendof2010,theSSOhadraised
approximately$40,000tosupportscholarshipsforGreekAmericanstudents inavariety
ofprivateschools.Theseschoolsareacceptingtaxdivertedfundsforscholarshipsthatare
awardedonthebasisofnationalorigin,contrarytotheCivilRightsAct.
LimitingScholarshiptoOneSchool
The Georgia SSO law prohibits an SSO from making scholarships available to
eligiblestudents inonlyoneschool.20
Theprovision isapparentlydesignedtopreventa
privateschoolinGeorgiafromcreatinganSSOinordertoarrangefinancingforeducating
a
limited
and
narrow
range
of
childrenchildren
attending
only
that
school.
This
arrangement,however,isexactlywhattheChristianInternationalCounseling&Ministries
(CICM)hasdoneasanSSO.Theorganizationwasincorporatedin2001andinrecentyears
hasbeeninbusinesstooperateFriendshipChristianSchool.Inits2008 IRSreport,CICM
19SeeCodeofGeorgia,sections202A1(2)(B).
20SeeCodeofGeorgia,sections202A1(3)(B).
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statesas itsprimaryexemptpurpose:WeAreaNonDenominationalChristianSchool.
CICMs report was filed with the IRS in January 2010 and lists its street address as the
schoollocationandthewebsiteofFriendshipChristianasitsown.
Attheendof2010,CICMasaregisteredSSOhadaseparatewebsite,butitdidnot
list any affiliated schools. The site did not provide any means for applying for a
scholarship.Theonlinesection forScholarshipForms includedonly forms fortakinga
taxcreditnotforapplyingforascholarship.ThelaststreetaddressfortheSSOwasthe
SlavicEvangelicalChristianChurchofAtlanta,whosememberswereinvolvedinfounding
thenearbyFriendshipChristianSchool.TheonlyschoolthatSEFfoundinitsresearchthat
identifiesCICMas itsaffiliated SSO is Friendship ChristianSchool.The schools business
managerisalsothecontactperson/agentforCICMasaGeorgiaSSO.
CICM and other SSOs have been able to disregard Georgia law because the law
deliberately provides no public records by which to monitor how private organizations
that raise and distribute taxdiverted funds are implementing the law. By effectively
barringstateagenciesfrommonitoringandholdingaccountableGeorgiasSSOs,Georgia
lawhascreatedanenvironmentinwhichtoofewareactinglawfullyinapubliclyfunded
systemthatiscurrentlyfreetoserveprivateinterestsasmuchasthepublicinterest.
GEORGIASTAXCREDITSCHOLARSHIPLAWIGNORESLESSONSOFOTHERSTATES
Georgiaisanexceptioninseveralimportantwaysamongthesevenstateswithtaxcredit
scholarshipsforprivateschools.
First,Georgiaslawistheexceptionbecauseitfailstoholdanyoneaccountableforhow
they divert or spend tax funds. It is the only law that does not trackin some waywho is
receiving scholarships under the program. All other states require reporting that tracks and
measuresdevelopments in the taxcreditprogram.Threestates (Arizona, Indiana,andFlorida)
go a step further to ensure accountability by requiring private schools to measure student
achievementwithstandardizedtestingorreportsofstudentprogress.Dueto2011amendments
totheSSOlaw,Georgiaalsoistheonlystatetomakeitacriminaloffensetodivulgeinformation
aboutanSSOsauditedoperationsandspending.
Second,Georgiaistheonlystatethatdoesnotconsiderfamilyincomeinawardingtax
funded scholarships to private schools. Florida, for example, restricts scholarships to students
whosefamiliesareatorbelow185percentofthepovertyline.
Third,fourstateslimiteligibilityforscholarshipstopublicschoolstudents,butGeorgiaistheonlystateamong them thathasnotrequiredactualpriorattendance inapublicschool to
receive a taxfunded scholarship (see pages 1418). The other three states have enforced the
requirementthatonlystudentswhotransferfromapublicschoolareeligibleforscholarships.
Georgiaalso isoneofonlythreestates(includingArizonaand Indiana)thatallowboth
individualsandcorporationstoreceiveataxcredit,andoneofonlythree(includingArizonaand
Florida)thatallowadollarfordollartaxreductionforcontributions.Also,threestatesIndiana,
Iowa,andRhodeIslandhaveprogramswithannualcapsbelow$10million,whileGeorgias$50
millioncapnowhasanautomaticannualcostoflivingincrease.
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ACCOUNTABILITYFORTAXFUNDEDEDUCATIONPERFORMANCE
InGeorgia,there is littleorno informationbywhichparentsorpolicymakerscan
consider and compare the academic performance of a private school receiving tax
revenuesforastudentscholarshipwiththeperformanceofstudentsinpublicschoolsor
otherprivateschools.Inaddition,Georgialawcurrentlydoesnotprovideforanymethod
to
account
for
how
well
schools
are
educating
any
student
receiving
an
SSO
tax
funded
scholarship.
Georgias law makes no provision for an assessment or testing of students who
attendprivateschoolswithtaxfundedscholarships.Nor isthereanystateregulationor
law inGeorgiathatprovidesthepublicwiththeresultsofanytestorassessmentofthe
academicperformanceofanystudentattendingaprivateschoolwithtaxpayersupport.
SomeprivateschoolsinGeorgiaadministernationaltests,suchastheIowaTestofBasic
Skills(ITBS),whichalsohasbeenusedwidelybypublicschools,butalmostnoneroutinely
makestestresultsavailabletothepublic.21
In contrast, students in taxfunded public schools are required to undergo an
extensive series of tests, all of which are published annually according to student
characteristicbyschoolandschooldistrict.Inthefirstandsecondgrades,Georgiapublic
schoolchildrenaretestedonthreesubjectseveryyear.Fromthethirdgradethroughthe
seventhgrade,publicschoolstudentsaretestedannuallyon fivesubjects. Intheeighth
grade, they are tested on five subjects and writing. In Georgia public high schools,
studentstakestatemandatedteststhreetimeseachyearononeofeightsubjectsinfour
coreareasofthecurriculum.Thereisalsoastatemandatedwritingtestandagraduation
test for high school students in public schools. The results from all of these tests are
disaggregatedbystudentcharacteristicsandmadeavailabletoparentsandtothepublic.
Today, as in the past, it is virtually impossible for parents to make an informed
choiceaboutthecomparativeacademiceffectivenessofpublicandprivateschools.Now
inGeorgia,someprivateschoolsarebeingaidedwithtaxdivertedfundsforscholarships.
21See,forexample,EducationGuide:ADirectoryofPublicandPrivateSchools inthe10CountyMetroArea+Their
StandardizedTestScores,AtlantaBusinessChronicle,specialsection, January28February3,2011.Despitethetitle,
there are no test scores for private schoolsonly for public schoolsin the guide. Also see theAtlantaJournal
Constitutions online School Guide for parents on public and private schools. It lists student demographics and
performance data, test scores, and teachers years of experience for public schools. The private schools report no
informationonacademicachievementorothercomparableindicators.See:http://schools.ajchomefinder.com/.
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Asaresult,thereisalsonoinformationavailabletothegeneralpublicortopolicymakers
bywhichtoassesshoweffectivetheprivateschoolsareineducatingstudentsattending
withtaxfundedsupport.
StudentswhoattendandgraduatefrompublicschoolsinGeorgiawillundergoas
many as 87 statemandated tests over 12 years in order to assess if their schools are
effectivelyusingtaxdollarsineducation.Astudentwhoattendsaprivateschoolwithtax
fundedscholarshipstakesnostatemandatedtests.Theresultsofmandatedtestinginthe
publicschoolsarepublishedannuallybyschoolandschooldistrictaccording tostudent
characteristics.Therearenoresultsandnothingavailabletopublishintheprivateschools
wherestudentsattendwithsupportofdivertedtaxfunds.
Theonlyrationalbasisforsuchanenormousmismatchinpublicaccountabilityfor
taxsupportededucationistheassumptionthatanyprivateschoolselectedbyaparentis
alwaysbetterthananypublicschoolselectedbyaparent.Thisassumptionisfalse.There
is no credible evidence to support the conclusion that private schools educate children
withsimilarbackgroundsanybetterthanpublicschools.22
And,there isnofactualbasis
for concluding that any private school eligible to receive taxfunded scholarships in
Georgiaisusuallybetterineducatingchildrenthananypublicschool.
The nations prevailing independent research presents clear and convincing
evidence that students with similar economic, social, and family backgrounds in similar
communitiesscoremuch thesameon tests in publicandprivateschools.A2007study
usinglongitudinaldatawascommissionedbytheCenteronEducationPolicyandsupports
theconclusionthatstudentswhoattendprivatehighschoolsreceiveneitherimmediate
academicadvantagesnorlongertermadvantagesinattendingcollege,findingsatisfaction
inthejobmarket,orparticipatinginciviclife.23
22 A recent scholarly study shows that private schools receiving tax credit scholarships for students in Florida have
helpedtoimprovepublicschoolperformancebycreatingcompetitionbetweenprivateandpublicschoolsforstudents.
See
D.
Figlio
and
C.
Hart,
Competitive
Effects
of
Means
Tested
School
Vouchers
(Cambridge,
MA:
National
Bureau
of
EconomicResearch,June2010).Thestudy,however,offersfewornoprospectsforsuchabeneficialdevelopment in
GeorgiaunderHB1133.ThecompetitiveeffectsinFloridasteminlargepartfromtheFloridalawrequiringsimilarlevels
ofaccountabilityandreportingforeducationalperformancebetweenprivateandpublicschoolsandlimitingscholarship
tolowincomechildren,whosepublicschoolsareeligibleforextrafederalTitleIfunding.Inaddition,whilethestudys
findingswereconsistentusingfourdifferentmethodsofmeasurement,theauthorsnotethattheseestimatedeffects
aremodestinmagnitude(p.24).23
H.Braun,F.Jenkins,andW.Grigg,ComparingPrivateSchoolsandPublicSchoolsUsingHierarchicalLinearModeling,
No.2006461(Washington,DC:NationalCenter forEducationStatistics,2006);C.LubienskiandS.Lubienski,Charter,
Private,PublicSchoolsandAcademicAchievement:NewEvidencefromNAEPMathematicsData,OccasionalPaperNo.
111(NewYork:NationalCenterfortheStudyofPrivatizationinEducation,2006);S.LubienskiandC.Lubienski,School
SectorandAcademicAchievement:AMultilevelAnalysisofNAEPMathematicsData,AmericanEducationalResearch
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Other recent research suggests that public schools on average may be out
performing private schools when examining students with similar backgrounds and
characteristics.Themostrecent,comprehensivestudyofstudentachievementbyschool
typefoundthat,afteradjustingdatatoaccountforastudentsbackground,sometypesof
privateschools intheUnitedStatesperformedbelowpublicschoolsonNAEPtests.The
lowestperformingschoolsscoringsignificantlybelowpublicschoolsonfourthoreighth
gradeNAEPtestswereconservativeChristianschools,whicharethe largest, fastest
growingsegmentofprivateschoolsandSSOaffiliatedschoolsinGeorgiatoday.Arelated,
followupstudyfoundthatconservativeChristianschoolsalsohadthelowestpercentage
ofcertifiedteachersamongpublicandprivateschools.24
12
10
8
6
4
2
0
2
4
Catholic Lutheran Conservative
Christian
OtherPrivate Charter
MostPrivateSchoolsUnderperformPublicSchools
inAverageAchievementScores
AdjustedtoCompareSimilar8thGradeStudentsNationalNAEPScoresinMath:2003
Source:Lubienski&LubienskiStudy
Data isavailable inGeorgiaforhighschoolseniorsSATcollegeentrancetestsby
school type,butno studyhasadjusted results to compare scores forGeorgia students
withsimilarfamilybackgrounds,locations,andsocioeconomiccharacteristics.Withthree
timesmorelowincomestudents,publicschoolsinGeorgialagbehindbothindependent
Journal43,no.4(2006):651698;andH.Wenglinsky,ArePrivateHighSchoolsBetterAcademicallyThanPublicHighSchools? (Washington,DC:Center forEducationPolicy,2007).A reviewof thepolicycenters researchvalidates thefindingsofotherindependentscholars,findingsmallornodifferencesinstudentperformanceamongsimilarlysituated
children inpublicandprivate schools.See J. Lee,ReviewofTwoReportsAddressing theAchievementofStudents inPrivateandPublicSchools (Boulder,CO:Education and thePublic InterestCenter&EducationPolicyResearchUnit,2007).24
Lubienski and Lubienski, School Sector and AcademicAchievement, 651698. S. Lubienski, C. Lubienski, and C.Crane,AchievementDifferencesandSchoolType:TheRoleofSchoolClimate,TeacherCertification,andInstruction,AmericanJournalofEducation115,no.1(2008):97138.
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andreligiouslyaffiliatedprivateschoolsinaverageSATscores.Butin2010therewere34
public high schools that scored above Georgias SAT average for religiously affiliated
private schools, and 16 public schools that exceeded the independent high schools
averagewithoutconsideringstudentcharacteristics.
NumberofGeorgiaPublicHighSchools
ExceedingGeorgia'sPrivateSchoolSATAverageScores:2010
TypeofPrivateSchool
WherePublicSchoolExceeded:
Total Math Reading Writing
Independent 16 23 15 12
Religious 34 47 29 29
Source:CollegeBoard
The locationoftheseGeorgiaschools isparticularlyrelevant.Amajorityofthese
higherperformingpublichighschoolsarelocatedinthefivecountiesofGeorgiathathave
the
largest
number
of
private
schools
and
most
SSO
affiliated
private
schools.
In
other
words, most of the private schools currentlyworking with SSOs to receive tax funds to
finance student scholarships are in the five counties that also have Georgias higher
performingpublichighschools.Saidanotherway,mostSSOaffiliatedschoolsarenot in
the120Georgiacountieswithnohigherperformingpublicschools.
Highschoolseniors inpublicschools inthesamefivecountiesalsohaveahigher
rate of eligibility for HOPE scholarships than the rest of the state. Forty percent of the
public
high
school
seniors
in
2009
in
these
five
counties
were
eligible
for
a
HOPE
scholarship.Theaverageintheremaining154countieswas37percent.25
ThedataonGeorgiahighschoolsdemonstrateshowthecurrentlaw,withoutreal
oversight,disclosure,andaccountability, isdeveloping inanunregulatedmarketplaceto
providetaxfundededucationalchoiceprimarilyinlocationsthatalreadyhavethestates
mostacademicallycompetitivepublichighschools.
All told, with no public disclosure or accountability for a private schools
educational
performance,
Georgia
has
left
policymakers
and
parents
in
the
dark
about
howwell aprivate school can and does educate studentswith taxfundedscholarships,
especiallyincomparisonwithpublicschools.Thetaxcreditlawisbaseduponadisproven
assumption that a private school will always educate a student better than a public
school.And,sofar,mostoftheSSOaffiliatedschoolseligiblefortaxfundedscholarships
25AslightlylargerdifferenceinHOPEeligibilityexistedin2006.
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toprovideeducationalchoicesforstudents in lowperformingpublicschoolsare located
inthecountieswherestudentsarelesslikelytobeinorneartheworstfailingpublichigh
schoolsinGeorgia.
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INCOMEANDTAXFUNDEDPRIVATESCHOOLSCHOLARSHIPS
Thereis littleornoevidencetodemonstratethatSSOs inGeorgiahaveusedtax
fundedgrantstodistributescholarshipsprimarilytolow incomestudentsduringthe last
three years. The Georgia law fails to set income limits for eligibilitya fact that makes
Georgiatodaytheonlystateinthenationwithtaxcreditscholarshipsthatdoesnotlimit
at
least
some
tax
credit
scholarships
to
students
with
real
financial
need.
NoneoftheSSOsraisingtaxdivertedfunds inGeorgiasince2008hasvoluntarily
restrictedtheirgrantstoschoolsthatwillprovideonlyneedbasedscholarships,andnone
oftheseSSOshasestablishedhouseholdincomeasevenoneofseveralnecessarycriteria
for eligibility for taxsupported scholarships. Georgia GOAL has recommended that
participating schools provide needbased scholarships with tax credits, but it allows
affiliatedschoolstoignoretheirrecommendation.26
Most private schools in Georgia collect or consider, to some extent, household
income in order to award scholarships with their own private funds, but there is no
evidence that most SSOaffiliated private schools have considered a students family
income when deciding how to award taxfinanced scholarships during the last three
years.27 And currently there is no public information about how many taxsupported
scholarships are awarded, in whole or in part, by these private schools on the basis of
financialneed.
Thesepoliciesandpracticesmakeadifferencebecauserelativelyfewlowincome
children in Georgia attend private schools. For example, households with children
(betweentheagesofsixand16)attendingprivateschoolsinGeorgiahadessentiallytwice
themedianincomeofthosehouseholdswherechildrenattendedpublicschoolsin2007.
This gap in income was the fourth largest in the nation following only three other
Southernstates:Tennessee,Texas,andLouisiana.
26 Three newer SSOs, Arete Scholars Fund, Student Scholarship Foundation, and AAA Scholarship Foundation, have
statedthattheywill limittheirscholarshipstostudentswithfinancialneed;however,a largernumberexplicitlystate
theywillnotimposeanysuchrequirements.27
Some private schools such as Gatewood Academy in Eatonton and Landmark Christian School in Fairburn require
incometaxformstoverifyhouseholdincome.SeveralschoolslikeMaconsCentralFellowshipChristianAcademy,which
has issued 163 taxfinanced scholarships during the last three years, also use commercial services like FACTS, which
collect family income data for the schools in managing all applications for admission and scholarships, including tax
creditscholarships.
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Source:USCensusBureau
Asaresult,children inGeorgiaspublicschoolsare farmore likelytocomefrom
low income households than private school students and far less likely to come from
higherincomefamilies.Only6.7percentoneoutofevery15householdswithchildren
inprivateschoolshadincomesbelow$25,000in2007. Inpublicschools,thepercentage
wasthreetimeshigheroneoutofeveryfivehouseholds.
Atthehighestendoftheincomescale,thepatternisreversed.Morethanoneout
ofeveryfivefamilieswithachildinprivateschools inGeorgiain2007hadanincomeof
$150,000 or more. One in every 15 households with public school children was at that
incomebracket.28
Lessthan
$25,000
Lessthan
$25,000
Morethan
$150,000
Morethan
$150,000
0.0% 5.0% 10.0% 15.0% 20.0% 25.0%
Public
Private
GeorgiaMedianHouseholdIncomeWithinSchoolType:2007
Source:USCensusBureau
28ThesecomparisonsdonotshowthatmostofGeorgiashigh incomehouseholdshavechildren inprivateschools
onlythatmostofthechildrenwhoareinprivateschoolsdocomefromhighincomehouseholds.Infact,morethan70
percent of Georgia households with incomes at or above $150,000 have their children in public schools. The latest
availableyearfordataonschooltypebyincomeis2007.
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Without clear intentions and focused efforts, it is difficult to understand how
private schools in Georgia, populated predominately by children from high income
households,canorwillusetaxsupportedscholarshipstoassisttheneedystudentswho
aresupposedtobethechiefbeneficiariesofthetaxcreditlaw.
GOALScholarshipsandLowIncomeStudents
GeorgiaGOAListheonlySSOthathaspublishedinformationaboutthehousehold
incomeofstudentsawardedtheirSSOscholarshipsin2009and2010.GOALreceived43.8
percent of all SSO tax credit revenue ($10.6 million) in 2009 and 34 percent of all tax
credit revenue ($13.7 million) in 2010. As perhaps the largest SSO operating in Georgia
during the last three years, GOALs statistical reports offer the only available data in
understandingifandhowSSOsaredistributingscholarshipstolowincomestudents.
GOAL reports that the average family adjusted gross income (AGI) for its 626
scholarshiprecipientsin2009was$44,633.29
Thirtypercent188scholarshiprecipients
hadafamilyAGIof$24,000orless.Another16percent102recipientshadafamilyAGI
between$24,001and$36,000.Together,42percentofthescholarshipswenttostudents
infamilieswithanAGIof$36,000orless.Morebroadly,72percentofallGeorgiaGOAL
scholarshipswenttofamilieswithAGIat$60,000or less. Incontrast,only16percentof
thescholarshipswereawardedtostudentsinfamilieswithanAGIof$72,000ormore.
GOALsprogramreportforlastyeardemonstratesasimilarpatternindistributing
scholarships. The average adjusted gross income for families receiving a private school
scholarship was $47,797 in 2010. Families with less than $24,000 in AGI comprised 27
percent of all GOAL scholarship recipients. Families with more than $72,000 in AGI
received23percentofallGOALscholarships.
On first impression, these numbers appear to demonstrate that low income
studentscompriseasignificantproportionofGOALsscholarshiprecipients,butbecause
ofthespecialfeaturesofAGIasincome,thedatadoesnot.
Compiled
by
the
Internal
Revenue
Service
(IRS)
and
state
revenue
departments,
adjusted gross income is often very different from the income reported by the US
29TheGeorgiaGOALprogramreportfor2009statesthattherewere639scholarships,butonly626areincludedinthe
SSOs breakout by family. Apparently there was no income data for 13 of the recipients. Also, GOAL reported on its
website that it distributed 77 scholarships in 2008 to families with an average AGI of $48,605. Its 2008 IRS report,
however, shows no scholarships or grants were allocated or obligated that year. SEF has elected to rely upon the
accuracy of GOALs IRS report in 2008, since a false federal report makes an individual subject to punishment for
perjury.
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Census Bureau or other state and federal agencies. AGI is almost always considerably
belowreportedincomefromtheCensusBureauandotheragencies.
TheGeorgiaGOALdatatakesonnewmeaningwhenthosenumbersareplacedin
thecontextoftheIRSslatestAGIdata(2007)forallGeorgiataxpayers.TheaverageAGI
ofGOALscholarshipfamilies$44,633in2009and$47,797in2010wasmorethanfour
times larger than $9,842, which was the average AGI for tax filers who comprised
essentially the bottom half of all Georgia taxpayers in 2007.30
In this reallife context,
GOALs taxfunded scholarships appear heavily weighted toward students in Georgia
familieswithhigherincomes.
Similarly,
70
percent
of
GOALs
tax
funded
scholarships
in
2009
and
73
percent
in
2010wenttofamilieswithanAGIabove$24,000. Incontrast,theaverageAGIforeight
outof10Georgiataxpayers in2007wasonly$24,101. Inotherwords,morethanseven
30Thelatestdatafromfederalandstatetaxreturnsthatpermitananalysisofaverageincomewithinincomegroupsare
providedbythefederal InternalRevenueService(IRS)for2007.Sincetherecessionbeganto lower incomesofmore
families in Georgia in 2008 and afterwards, the use of 2007 IRS data in this comparison probably understates
differences.
APPLESANDORANGES:ADJUSTEDGROSSINCOME(AGI)ANDCENSUSINCOME
Statisticsonadjustedgrossincome(AGI)fromtheIRSandtheGeorgiaDepartmentof
Revenue cannot be compared with data from the US Census Bureau, which defines the
poverty
threshold
and
eligibility
for
free
and
reduced
lunch
in
public
schools.
It
is
a
classic
case
ofcomparingapplesandoranges.
The IRSdefines thecomponents of AGI income differently from the incomeofboth
the US Census Bureau and the Bureau of Economic Analysis (BEA), which reports for the
federal government on per capita income. The data also involves a different unit of
reportinga taxpayer (single andjoint) for the IRS; a household, family, or person for the
Census;andanindividualpersonforBEAincome.Finally,AGIisdifferentbecauseobviouslyit
isadjustedaccordingtothetermsofthefederaltaxcode.Asaresult,AGI issubstantially
belowtheotherformsofincomereportedbyotherfederalagencies.
An analysis by the IRS shows that nationally in 2003 the average AGI income per
taxpayerwasnearly$10,000belowtheaverageincomeperhouseholdreportedbytheCensus
Bureau.AstudybyArizonaStateUniversityrecentlyreportedthatin2007theIRSsaggregate
incomewasonly79percentofthetotalincomereportedbytheBEAduringthesameyear.In
Georgia the average AGI for a taxpayer in 2007 was only 76.1 percent of the average
household incomereportedbytheCensusBureauforthatyear. Inotherwords,onaverage,
AGIwas23.9percentlessthantheamountreportedbytheCensusinGeorgia.
Therefore, themostaccurate,meaningfulmethod forusingAGI tomeasurerelative
incomeorneedinGeorgiaistocompareagroupoffamiliesaverageAGItotheAGIaverages
for all Georgia taxpayers or different groups of taxpayers in the state. This comparison is
exactlywhatthisstudydoes,wheredataisavailable,todetermineifandhowwellGeorgias
SSOsareservinglowincomestudentswithtaxfundedscholarships.
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outofevery10GOALscholarshipsinboth2009and2010wenttostudentsinfamiliesand
households whose average AGI was essentially above the averageAGI of 80 percent of
Georgia taxpayers. This pattern of distribution for taxfunded scholarships does not
evidenceprimarysupportforlowincomestudents.
$3,037
$9,842
$24,101
$37,508
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
$50,000
Bottom25Percent Bottom49Percent 82Percent 97Percent
PercentofGeorgiaTaxpayers
AverageAdjustedGrossIncome
ForGroupsofGeorgiaTaxpayers:2007
Source:InternalRevenueService andGOALStatistical Report
TuitionCostsforLowerIncomeStudentswithSSOScholarships
TheGOALstatisticalreportalsoprovidesinformationaboutthepercentageofthe
private
schools
tuition
covered
by
its
scholarships.
In
2009,
students
with
family
AGI
between $36,001 and $48,000, for instance, received the highest average scholarship,
$5614,whichcovered60percentoftheirprivateschooltuition. In2010,students from
families with an AGI of $24,001 and $36,000 received the highest average amount of
scholarships,$4921, whichcovered56percent of the privateschool tuition. Ingeneral,
students with lower incomes received the largest average amounts for scholarships in
GOALaffiliated schools and had the largest percentage of their private school tuition
coveredbytaxfunds.
These patterns for GOAL scholarships are progressive, but they fail to go far
enough to assure that the lower income families do not carry the heaviest financial
burdenand possibly the heaviest debt loadfor attending private schools with tax
fundedscholarships.TheGOALdatashowsthatthefamilieswiththelowestAGIwillhave
tospendthelargestportionoftheirlimitedincometopaytheprivateschooltuitioncosts
GOALScholarshipRecipients'Average2009AGI:$44,633
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notcoveredbyscholarships.Astudent ina familywithanAGIof$23,000, forexample,
paid15percentof the total familyAGI to cover the remaining tuition costs in2009.A
studentinafamilywith$83,000inAGIpaidonlyhalfthatpercentagesevenpercentto
payoffthetuitionbalance.
AsfamilyAGIdrops,theunmetcostoftuitionbecomes increasinglyburdensome
forstudents receivingGOALscholarships. Ifastudent, forexample,hada familyAGIof
only $12,000 instead of $23,000, the average cost of unmet private tuition would
consume28percentof the familysAGI in2009and31percent in2010. In contrast,a
student from a familywith anAGIof $66,000usedonly sevenpercentof the familys
incomein2009andninepercentin2010roughlyonefourthoronethirdthesharethat
thelowincomestudentsfamilypaystocoverremainingtuitioncosts.
0%
5%
10%
15%
20%
25%
30%
$12,000 $30,000 $42,000 $54,000 $66,000 $78,000 $90,000
AssumedFamilyAGI
PercentofFamilyAGItoPayUnmetTuitionCostsAfterGeorgiaGOALScholarships
2009
Source:InternalRevenueService&GOALStatisticalReport There is no available data by which to assess how accurately Georgia GOALs
patternsofgivingreflectthetermsandpatternsofothertaxfundedSSOscholarshipsfor
private school students. But circumstantial evidence suggests that most other SSO
affiliatedprivateschoolsalsosupportrelativelyfewlowincomestudents.
Since 2008GeorgiaGOAL has been the only SSOwith substantial funding that
encouragesprivateschoolstograntneedbasedscholarships.31Forthisreason,itisfairto
assumethattheschoolsaffiliatedwithGeorgiaGOALhavebeenmorelikelytoprovidea
31ThreeSSOsdotargetlowincomestudents,butonlyone,theStudentScholarshipFoundationofGeorgia,was
operatingin2009.Theirscholarshipfundsamountedtolessthan$30,000in2009.
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largerpercentageofscholarshipstolowincomestudentsthanmostschoolsaffiliatedwith
the other large SSOs operating in the state since 2008. And, since some significant
percentageoftaxfundedscholarshipsaregoingtoexistingprivateschoolstudents,who
aremostlyfromhigherincomehouseholds,thoserecipientsoftaxcreditscholarshipsare
likelytobehighincomestudents.
The private schools associated with other SSOs in Georgia are often located in
Georgiashigherincomecommunitiesand,asaconsequence,arelesslikelyasapractical
mattertoreachandservelowincomestudents.AlmostoneinfiveSSOaffiliatedprivate
schools(butunaffiliatedwithGeorgiaGOAL)werelocatedinzipcodeswheretheaverage
AGI in 2007 was more than $100,000a rate four and a half times larger than the
percentageofsuchhigherincomezipcodesinGeorgia.
0%10%
20%
30%
40%
50%
60%
70%
80%
Under
$10,000
$10,000
$24,999
$25,000
$49,999
$50,000
$74,999
$75,000
$99,999
$100,000
$199,999
Over
$200,000
AverageAdjustedGrossIncomebyZipCode:
StateofGeorgiaandSSOPrivateSchools(GeorgiaGOALSchoolsOmitted)
StateZipCodes PrivateSchoolZipCodes
Source:InternalRevenueService&SEFResearch
Ontheotherendofthescale,morethan70percentofGeorgiaszipcodeshadan
average AGI of less than $50,000. But only 40 percent of SSOaffiliated private schools
(notassociatedwithGeorgiaGOAL)wereinthesezipcodesin2007.
Aprivateschools location inahigherincomeneighborhood,ofcourse,doesnot
exclude low income students from attending, but it often reflects the schools primary
student population and presents added costs of transportation, afterschool care, and
extracurricularactivitiesthatbecomebarrierstoattendanceforlowincomechildren.
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All in all, Georgias private schools have been and are heavily populated with
students from high income households. When carefully analyzed, every available data
indicates that the Georgias tax credit scholarships have not changed that fact. It is far
more likely that the taxfunded scholarships have actually done very little to give a
significant number of low income students a private choice in education. And it is far
more likely that the implementation of HB 1133 has helped children in higher income
familiestoattendprivateschools.
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RACEANDTAXFUNDEDPRIVATESCHOOLSCHOLARSHIPS
Georgiasprivateschoolseligiblefortaxfundedscholarshipsaresignificantlymore
segregatedbyraceandethnicitythanthestatespublicschools.Whilethereisscantdata
onhowSSOscholarshipsarebeingawarded, itappears fromavailablesources that the
Georgia tax credit scholarships have done little more than support white students to
attend
schools
that
already
have
extreme
racial
isolation.
In 2007 (the latest year for comparable racial data), white students constituted
47.5percentofthepublicschoolenrollmentand79.4percentoftheenrollmentinprivate
schoolsinGeorgia.AfricanAmericanchildrenmadeup39.2percentofthepublicschool
enrollment and 12.9 percent of the states private school students. Hispanic students
comprised10percentofthestudentsinGeorgiaspublicschoolsandthreepercentinthe
privateschools.StudentswithfamilyheritagesfromcountriesinAsia,thePacificislands,
andAmericanIndiantribesandstudentsselfidentifyingasmultiracialorotherhadthe
smallestdisparitiesinenrollmentbetweenpublicandprivateschoolsinGeorgia.
RacialCompositionofGeorgiaPublicSchools:2007
White Black Hispanic AsianPacific Am.Indian
RacialCompositionofGeorgiaPrivateSchools:2007
White Black Hispanic Asian Pacific Am.Indian MultiRacial/Other
Source:USCensusBureau
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These differences in school demographics reflect, in large part, the role that
private schools in Georgia played in resisting school desegregation during the last
century.32Infact,thefirsttimeGeorgiaenactedalawtoprovidetaxfundedscholarships
and grants for students to attend sectarian private schools was for the purpose of
advancingtheconstitutionalrightsofschoolchildrentoattendprivateschoolsoftheir
choice in order to preserve segregation. In 1962, the State of Georgia spent
approximately$210,000(morethan$1.4millionin2011dollars)financingscholarshipsfor
almost1200studentstoescapepublicschooldesegregationbytransferringtosegregated
privateschools.
Thispast isevidenttoday incurrentpatternsofracialseparationand isolation in
most of Georgias private schools. More than half the states private school students
attended schools that are virtually segregatedwhere one race or another constituted
from90to100percentoftheschoolsstudentpopulationinthe200708schoolyear.
0%
10%
20%
30%
40%
50%
60%
Public Private SSOAffiliatedPrivate
GeorgiaStudentsinVirtualSegregationPercentInSchoolswith90to100%EnrollmentofOnlyOneRace Ethnicity
BySchoolType:200708
Source:NationalCenterforEducationStatistics&SEFResearch
Based on the latest enrollment data from the National Center for Education
Statistics
for
public
and
private
schools,
a
student
in
a
Georgia
private
school
is
nearly
three times more likely than a public school student to attend a school virtually
segregated by race or ethnicity. Only 17.7 percent of Georgias public school children
32SeeAppendix8,ABriefHistoryofGeorgiasPrivateSchoolsinOpposingDesegregation.
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were in virtual segregation, while more than half the states private school students
attendsuchschools.
Thesepatternsofsegregationapplyalmostequallytotheprivateschoolsaffiliated
withSSOsinordertoreceivetaxfundedscholarshipsinGeorgia.Fortyninepercentofthe
studentsattendingSSOaffiliatedprivateschoolsin200708wereinvirtualsegregation
onlyslightlybelowthepercentageforallofGeorgiasprivateschools.
The differences in segregated education between public and private schools
appliedtoallracialandethnicgroupsofschoolchildren,buttheywereespeciallylargefor
whites and Hispanics. Fiftyfour percent of Georgias white students in private schools
were isolated in schools that were virtually segregated, while only 13 percent were in
segregated public schools. Hispanic students were over nine times more likely to be in
virtualsegregationinprivateschoolsthaninpublicschoolsinGeorgia.Blackstudentshad
thehighestpercentagesforstudentsinsegregatedpublicschoolsmorethanoneinfour
blackstudents.(Ofcourse,mostofthissegregationhasbeentheresultofwhitestudents
fleeing desegregated public schools where black students attend in large numbers.)
Despite this fact,blackstudents inprivateschools inGeorgiahaveasignificantlyhigher
percentageofvirtualsegregationthanblacksinpublicschools.
Georgia'sStudentsinVirtualSegregationPercentinSchoolswith90100PercerntEnrollmentofOneRaceorEthnicity
200708
0%
10%
20%
30%
40%
50%
60%
Black Hispanic White
Public Private
Source:NationalCenterforEducationStatistics&SEFResearch
There is no publicly available data on the racial or ethnic characteristics of the
studentswhohavereceivedtaxfundedSSOscholarshipsinGeorgiaduringthelastthree
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years.Buttwoprior findings inthisstudy tend tosupport theconclusionthat relatively
fewscholarshipshavesupportedtheattendanceofAfricanAmericanorHispanicstudents
inprivateschools.First,sinceasignificantnumberofscholarshipsareapparentlygoingto
studentswhoarealreadyattendingprivateschools(seepages1418),itislikelythatthe
scholarshipsaredistributedtostudents inroughproportiontotheirnumbersalready in
privateschools. InGeorgia,thatmeans thatabouteightoutof10of thesescholarships
would go to white students. This distribution seems especially likely given that most
fundraising for tax creditsbySSOshas been takingplace among families and friends of
currentprivateschoolstudents.
Second,theavailabledataonhou
top related