Lawmakers to consider new private school tuition subsidies

A proposal to spend another $25 million in state money on private school tuition subsidies threatens to split advocates of these tax-credit programs.

One has existed in Georgia eight years. Now, lawmakers want to add a second aimed specifically at poor children. The current program allows taxpayers to steer $58 million a year to private schools. Technically, individuals and corporations “donate” the money, then recoup the amount as a credit on state taxes owed.

The program has been criticized as a drain on public schools and a subsidy for private-school kids. Available data suggest the students who benefit come from a broad demographic spectrum, but the public reporting requirements are limited and the program is not needs-based.

The new one proposed in House Bill 865 would require that all beneficiaries qualify for free- or reduced-price school meals. It “allows opportunity for our lower-income students to have a better shot for being able to obtain one of these scholarships,” said Rep. Valencia Stovall, of Lake City, the lone Democrat among the six co-sponsors.

This new proposal is dividing the groups that administer the current program.

Student Scholarship Organizations collect the money from donors, then pass it to schools. One of the operators under the existing program, Arete Scholars, is pushing for this new legislation.

Derek Monjure, co-founder and president, said that in addition to helping children of low-income parents it would address the current program’s “shoddy” public reporting requirements. “You have no assurances that you’re helping the kids who need it most,” he said. The proposed program would require participating schools to administer and report the results of standardized tests, and would limit the tax credit for any one corporation to $2.5 million. The only limit in the current program is that no corporation can claim credits worth more than 75 percent of its tax liability.

Georgia GOAL, the largest operator under the current program, opposes this legislation. Spokeswoman Kate Saylor said it would exclude middle-income families and would rank test scores above parent “satisfaction.” The group would rather see the state increase the $58 million cap of the current program.

The only thing both seem to agree on is the limit for any one corporation, something Saylor said Georgia GOAL would be open to implementing in the existing program.

Others question the entire premise in an era of public school budget cuts. “Since the original program was created in 2008, we’ve diverted hundreds of millions of dollars to private schools,” said Katherine Dunn, program director with the Atlanta-based Southern Education Foundation, which advocates for equity in education.

Lawmakers must grapple with important unknowns. For instance, advocates of tax credits argue they actually save the public money. Every student who enrolls in a private school is one less student the state must educate, they reason, arguing that a public education costs more than the tuition subsidy.

A 2014 report from Georgia State University studied this and concluded it was impossible to know whether this was true, in part because it’s unclear how many students with subsidized tuitions would have gone to private school without the subsidy. In those cases, the tuition subsidies are an added public cost.

“That information is not available, nor do we have the data necessary to estimate it,” wrote the authors, Robert Buschman and David L. Sjoquist, for the Andrew Young School of Public Policy. They concluded, however, that it was more likely the state would at least “break even” with a program only for low-income students who, the report reasoned, would be more likely to switch to private if they had a tuition subsidy.

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