According to a review of state tax data, an afterthought in a controversial school choice law in Alabama is likely to have a far greater impact than the legislation’s original design.
Last year, the law offered parents the ability to claim a tax break of up to $3,500 to help their children escape “failing” schools after the Alabama Legislature originally passed the Alabama Accountability Act. In addition, to help low-income students from those schools, it allowed residents and business to claim a dollar-for-dollar tax credit for contributing to scholarship organizations. To loosen restrictions on scholarships granted during a window between 15th September and 31st December of each year, the Legislature amended the law a few weeks later. Scholarship granting organizations had received nearly $25 million, the maximum amount that the statute will refund to taxpayers, by the end of 2013.
However, opponents who fear that it robs already-cash strapped public schools of funding have heavily blasted the law. Nonetheless, the law offers a vital safety valve for poor folks according to Gary Crum, of Circle of Love Outreach in Selma.
“One thing that it does is low-income families finally get to sit down and make a decision about their children’s education that they never could do before,” said Crum, whose organization has raised about $30,000 in scholarships for students at Ellwood Christian Academy. “Choice in education is something that has been needed in Alabama for a long time.”
With several organizations still claiming to be reviewing applications, the number of scholarships that have been given is unknown. Overall, the impact will be far greater than the direct tax credit given to parents who send their own children to private schools as suggested by the sheer amount of money donated.
For students coming from the 78 schools declared failing, that portion of the law remains limited. According to the state Department of Education, only 52 students from those schools transferred to a private school before the start of the current school year. In contrast, if the organizations awarded grants averaging $5,000 each, about 5,000 students could receive private school scholarships. If the grants are for less money, the number of benefiting students will be greater.
Ranging from a national organization promoting school choice to a group involving former Gov. Bob Riley that has raised by far the most money to small, existing organizations that have brought in little or no money so far, nine nonprofit organizations have qualified to participate in the program. As Brendan Kirby of All Alabama reports, Beacons of Hope, a nonprofit set up by the Catholic Diocese of Birmingham to support parochial schools in northern Alabama is one of the qualifying organizations. About 250 students out of an average of 400 applicants have received annual grants since 2010 as said by the director of the organization, Sister Brenda Monahan.
Beacons of Hope has expanded its reach to help Catholic school students statewide since passage of the Accountability Act. As Monahan put it, the organization is reviewing some 100 applications for scholarships but has not given out any of the $350,000 it has received under the program. Additionally, she claimed she expects to award scholarships to at least half of the applicants in amounts up to half the cost of tuition. Scholarship organizations are required by the law to give at least 75% of their awards to students who were not continuously enrolled in a private school the year before.
“That’s going to knock some of those applications out” from current Catholic students who otherwise would qualify, Monahan said.
Organizations are allowed by the law to keep 5% of the money raised for administrative costs, but it mandates that they give away the rest of the money by the year after it was collected. According to the deputy commissioner of the Alabama Department of Revenue, Curtis Stewart, that could put organizations in a bind if they raise a large amount of money.
“I would think it would be a thing they would have to be careful about,” he said.
Having trouble complying with the restrictions was not anticipated, as claimed by leaders of several organizations.
“I don’t think so, because the level of need is great,” Monahan said. “It is the first initiative in our state that gives parents the right to choose the educational environment for their kids. For some students in our state, their education is determined by their ZIP code.”