Gov. Nathan Deal’s floor leaders in the state Senate introduced legislation Friday that caps a much-criticized private school tax credit program and limits who can benefit from it.
The bill, Senate Bill 243, conflicts sharply with one introduced by the program’s principal backer in the House, state Rep. Earl Ehrhart, R-Powder Springs.
The introduction of SB 243 comes one month after the Southern Education Foundation, a non-profit group that pushes for education improvement in the state, asked the Department of Revenue to investigate the program, which SEF said has been widely abused.
Started through legislation introduced by Ehrhart in 2008, the program allows donors to student scholarship organizations to claim a state tax credit of up to $2,500 for married couples. Corporate donors can claim a credit worth up to 75 percent of their income tax liability.
Student scholarship organizations (SSO) give the money they raise to private schools, which in turn distribute the money to students via scholarships.
The goal of the program has been to provide financial assistance to students who move from a public school to a private one. Key supporters of the program said they backed it because they saw it as a way to help poor children escape troubled public schools.
Critics — most notably SEF, which used open records requests and documents from SSOs and private schools across the state in an investigation of the program — said the program raised many questions and costs too much at a time when public schools are struggling financially.
Currently, there is no requirement that scholarship assistance be limited to poor students.
SB 243, introduced by Senate floor leaders Rick Jeffares, R-McDonough, and Charlie Bethel, R-Dalton, and Sen. Fran Millar, R-Dunwoody, would require that scholarship preference be given to students with financial need.
Critics alleged that the program was a boon to parents whose children never actually attended a public school.
SB 243 would limit program eligibility to students who attended a public school for at least six weeks and those who are eligible to enroll in pre-kindergarten, kindergarten or first grade.
Earlier this year, Ehrhart introduced legislation that would make the program available to more students. His legislation, House Bill 140, would also have increased the amount set aside for tax credits to $80 million from the $51.5 million that was claimed last year.
SB 243, however, caps the program at $50 million, with adjustments for inflation.
SEF criticized SSOs and private schools for giving donors the impression that they could legally direct their assistance to a specific student and still claim a tax credit. SB 243 makes clear that that is against Georgia law. SSOs that violate that law would be no longer be allowed to operate in this state.
SB 243 is scheduled to be discussed during an Education and Youth Committee meeting on Monday.
“If we’re going to have choice programs, we want them to be as transparent as possible so the public is comfortable with it,” said Millar, a former chairman of the Senate’s Education and Youth Committee.
Derek Monjure, executive director of Arete Scholars Fund, said SSOs such as his have been unfairly lumped in with others that have abused the program. He said Friday that he was “very well pleased” with SB 243.
SEF Vice President Steve Suitts said he, too, was pleased, though he added that there needs to be more enforcement of the ban on directing donations to specific students.
“This program needs vast changes in law and operations if it is to actually serve an ethical, legitimate educational purpose in Georgia and not waste taxpayer funds,” Suitts said. “SB 243 can be the beginning of that reform, but it should not be the end.”
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