If the issue of major tax reform, which stalled in the recent session of the Georgia General Assembly, isn’t taken up in a special session, it will almost certainly resurface in 2012. Before lawmakers go back to spectacularly bad ideas like reimposing the state sales tax on food, they might want to make major adjustments to a loophole through which tens of millions are pouring out of Georgia’s coffers, and for the benefit of a select few.
The Atlanta-based Southern Education Foundation (sefatl.org) has just issued a report titled “A Failed Experiment: Georgia’s Tax Credit Scholarships for Private Schools,” and the overwhelming evidence in its conclusions is that the stated purpose of a 2008 state law is irreconcilable with the current reality.
H.B. 1133 created a system of tax credits for scholarships to private schools. Its ostensible rationale – and, at least in theory, it is a legitimate one – is to allow parents who can’t otherwise afford it an opportunity to transfer their children from underperforming public schools. The law enabled the creation of something called a student scholarship organization (SSO), contributions to which can earn private taxpayers filing jointly a dollar-for-dollar state tax reduction of up to $2,500, and corporations a reduction in state taxes of up to 75 percent.
Over the last three years, SEF reports, more than $72 million has been diverted into SSOs. That’s a lot of money, especially in revenue-strapped Georgia, even if represents a relatively small percentage of the state budget. And if it were indeed lifting up the educational opportunities and performance of at-risk children, it would be perhaps a sound investment.
The report comes to alarmingly different conclusions:
“Instead of providing the state’s neediest children attending troubled public schools with new, affordable opportunities for a good education, the law has been carried out, in large part, as a means to publicly finance the attendance of relatively well-to-do students, many of whom are already in private schools. Instead of saving tax funds, each of the private school scholarships financed by Georgia’s tax credits has cost the state government more than twice what it would spend to send a child to public schools.”
Worse, the report goes on, Georgia – which is one of only seven states to offer private school tax credits – has few if any significant disclosure requirements for the state, and none for the schools themselves, concerning how, where and for whom this money is spent; nor is there any required tracking of student performance to give taxpayers a sense of the return (if any) on their mandatory investment.
Accountability-free private education at public expense can hardly be what even the most passionate advocates of school “choice” have in mind.
Georgians understand the value of education, and few would object to reasonable and effective public investments in making it better. Diverting million the state can ill afford into private and largely secret accounts fails every part of that standard.