Three people who run a private scholarship fund in Cumming that is financed by public tax dollars got 60 percent raises in 2010, tax documents reviewed by The Atlanta Journal-Constitution show.
Their raises, to $175,600 each, came as more than 100,000 Georgia teachers marked another year without a pay increase. And the three are not the only officers of such organizations getting paid six figures, the AJC has found.
The groups are known as student scholarship organizations, or SSOs, which funnel state tax money into scholarships for private schools through a special program of tax credits. In effect, state taxpayers also pay the salaries of the people who run the organizations.
The three officers who got 60 percent raises — Robert Jasion, Mark Langston and Stefani Sanchez — are in charge of the Georgia Student Scholarship Organization Inc. in Cumming. Jasion, the fund’s director, told the AJC that the increases are based on a survey of similar nonprofits nationwide and were approved by an independent board.
The three were paid $109,500 in 2009, according to tax records.
By comparison, the head of the largest such organization in the state, GOAL, which paid $10.2 million in scholarships last year, is earning $120,000 this year.
Lisa Kelly, president of Sandy Springs-based GOAL, provided her salary Friday at the request of the AJC. Kelly noted that she earns $50,000 less as GOAL president than she did in her previous job as an executive at an IT firm.
Tax records show another large SSO, Apogee Georgia School Choice, paid Apogee Family Office LLC $535,000 in management fees in 2009, the last year for which records are available. John Panessa, executive director of the organization, said that money goes to salaries and other expenses, such as marketing. He said his base salary is $60,000, but he makes more than $100,000 a year when incentives are included.
By law, SSOs must spend at least 90 percent of their revenue on scholarships, with no more than 10 percent on administration. Apogee spent nearly 93 percent of revenue on scholarships, Panessa said. In the case of the Georgia Student Scholarship Organization in Cumming, administration amounted to about 9 percent of the scholarship fund’s revenue in 2010, according to the tax filing.
The big raises at the Cumming organization fit into a disturbing pattern when it comes to SSOs, said Rep. Kathy Ashe, D-Atlanta, a member of the state House Education Committee.
“It is very difficult to single out folks for incredible pay raises when the rest of the state is really being hamstrung by a lack of money,” Ashe said. “Where is this money coming from? It’s coming out of tax dollars. It adds one more tile to a pattern that doesn’t seem to be in the best interests of Georgia kids.”
Special tax credits
Student scholarship organizations have been controversial since the state Legislature passed the law creating them in 2008.
Under the law, corporate and individual taxpayers may decide that a portion of their taxes — up to $1,000 for individuals, $2,500 for married couples and up to 75 percent of a corporation’s total tax liability — will go to a certain SSO rather than into the state treasury. The taxpayer then claims a tax credit equal to the donation. The SSOs, each of which is aligned with one or more private schools, pass most of the money on to the schools to fund scholarships.
Proponents argue that SSO donations are not a diversion of state tax money to private schools. Instead, they say, corporate and individual taxpayers are simply deciding to make a donation for which they may then claim a dollar-for-dollar tax credit.
The tax credits totaled $50 million last year and will grow slightly this year.
SSOs have passionate supporters and equally passionate critics. Those in favor say SSOs are an important step toward school choice, in which tax money follows the child from public school to a private, potentially better, school. Opponents say they’re an unwarranted drain on public education in a state that has cut more than $1 billion from public schools.
The organizations also can operate with minimal transparency. Some are nonetheless open about their operations; others less so. But the program has come under fire because not all SSOs offer detailed reports to the public about what they do with the public’s money.
One of the few public records relating to the organizations is the federal tax return that most nonprofits must file. The AJC used those tax records to ascertain the finances of some SSOs, but the records are often a year or two old and may contain only sketchy information.
Extremely popular
The state Education Department’s list of student scholarship organizations totals 37 as of the most recent posting on the department’s website Jan. 13. Twenty-nine of those were based in metro Atlanta.
The program was so popular last year that it reached its $50 million cap faster than anticipated, forcing the scholarship groups to return some of the contributions. The cap on tax credits will be $51.5 million this year.
Rhonda Stewart says the scholarship her 5-year-old daughter, Sauyer, receives through Arete Scholars Fund “is a godsend.”
“She gets the individualized attention she needs, and she is just blossoming — flourishing,” Stewart said.
Sauyer attends prekindgarten at Peoples Baptist Academy in McDonough on an Arete (pronounced ah-reh-tay) scholarship. Stewart said the academy was by far the best option she found when she moved to Georgia in 2010, after finding herself suddenly single and on her own raising Sauyer, born premature at 27 weeks.
“There’s no way she could be there without the scholarship,” Stewart said.
Limited data
By design, the state provides the public with limited information about where SSO money goes. The state Education Department doesn’t regulate the scholarships. The Revenue Department provides limited information on SSO finances.
Each organization must provide the state with an independent audit each year. Officials said last year that not all the organizations had done so, but they refused to say how many or which ones.
Some, like GOAL, Arete Scholars Fund in Dacula and the Catholic schools’ SSO, have voluntarily reported detailed information. Jasion, director of the Georgia Student Scholarship Organization in Cumming, told the AJC last week that his organization received $5.8 million in donations in 2010 and provided 2,287 scholarships, worth about $4.67 million.
The average scholarship was $2,044. The smallest was $49, the largest $13,050, Jasion said.
“Our motto is we never turn down a school that asks for help,” he said.
‘More accountability’
The Georgia Christian Schools Scholarship Fund of Marietta doesn’t report paying any salaries to board members in its latest tax filing.
State Rep. Earl Ehrhart, R-Powder Springs, sponsor of last year’s law that increased the amount of tax credits going to scholarships, is the unpaid CEO of the fund.
Ehrhart said administrative costs and salaries for SSOs are below that of other nonprofits. He cited, for instance, the salaries at the United Way. The president of the United Way of Metropolitan Atlanta earned more than $400,000 in overall compensation in 2010, according to tax records. However, the organization had more than $97 million in revenue that year and spent many times the amount of any SSOs.
Panessa, whose Apogee SSO gave out 1,318 scholarships last year worth $6.5 million, also said most nonprofits have much higher overhead. Panessa’s Apogee has three full-time staffers.
Ehrhart said that within the 10 percent limit, he doesn’t want the state telling SSOs how much they should pay their staffs.
“Of the money that is there, 90 percent of it flows to children,” he said. “How many other organizations can make that claim?”
Officials with other scholarship organizations are concerned when they hear about high salaries.
“We’re worried about the program — how it’s accountable, how it’s policed,” said Derek Monjure, executive director of Arete Scholars Fund, an SSO that puts 95 percent of its money into scholarships. “We believe as an organization there needs to be more accountability at all levels.”
Monjure’s organization has two full-time and three part-time employees.
“None of us makes six figures, and I’m a father of five,” added Monjure, who earns about $92,000 annually.
Tim Callahan of the Professional Association of Georgia Educators, the state’s largest teacher organization, called the pay of the Cumming SSO officials “abusive.”
“What we seem to have here is a HOPE program for metro-area private school parents with some people seeming to take exorbitant profits off the top,” he said. “Most Georgians have no idea that $50 million a year is being siphoned from tax dollars to subsidize private school tuitions.”
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