Author Archive | Jon East

New York passes budget this morning without statewide tax credit scholarships

A bipartisan plan to bring tax-credit scholarships to one of the nation’s largest and bluest states has fallen short, at least for now.The provision did not survive the $142 billion annual spending budget that New York lawmakers adopted early this morning, leaving supporters instead to push for its adoption this summer in the regular session.

The “Education Investment Tax Credit” had been tied to the Dream Act, which would provide state college aid to undocumented immigrants, in a political deal that unraveled in the final days of budget deliberations. Neither survived.

Among those expressing regret was Cardinal Timothy Dolan, the Archbishop of New York, and his reaction was pointed: “Our elected officials must cease allowing public school teachers unions intent on creating a government school monopoly to continue dictating education policy in our state. We turn again to our leaders to do the right thing, and pass the education tax credit, not for any interest group, but for the children of our state.”

That the effort came so close, though, speaks to both its future possibilities and the changing politics surrounding private school choice.

In New York, supporters of the scholarship program have assembled a broad coalition led by prominent Democrats, including Gov. Andrew Cuomo, and supported by organized labor. Both Cuomo and the state Senate proposed the Education Investment Tax Credit in their budgets. Though the Assembly did not include the plan in its budget, a majority of its members have signed on as co-sponsors.

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Alabama tax credit scholarships upheld in a case that sounds a lot like Florida’s

The Alabama Supreme Court on Monday rejected a constitutional challenge to a scholarship program that bears striking similarity to Florida’s Tax Credit Scholarship for low-income students, which was challenged in August. The Alabama ruling comes six months after the New Hampshire Supreme Court also rejected a challenge to tax credit scholarships in that state.

Not surprisingly, school choice advocates in Alabama were pleased. Said Chad Mathis, chairman of the Alabama Federation for Children: “We are thankful to the justices of the Alabama Supreme Court for seeing this lawsuit for exactly what it was – a veiled attempt by Alabama Education Association (AEA) to keep the status quo in education and prevent parents from making decisions that best suit their children.”

The AEA, Alabama’s teachers union, challenged both the procedure by which the Alabama law was passed in 2013 and the constitutionality of the program. The constitutional issues were based on the union’s argument that the scholarship funds were the equivalent of state appropriations – a claim that closely tracks the Florida case, which was filed by the Florida Education Association and other groups. Florida’s tax credit scholarship program is administered by organizations like Step Up For Students, which co-hosts this blog and employs the author of this post.

By alleging the scholarship funds were in fact government appropriations, the AEA said the program improperly used money from the Alabama Education Trust Fund on nonpublic schools and to support religious schools.

The union’s lawyers wrote that a tax-credited scholarship contribution “channels to charitable organizations monies that otherwise would have gone to the public (and) is the functional equivalent, in all respects, of an appropriation to such charitable institutions that are not under the absolute control of the State.”

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Florida’s school choice bottom line: 1.5 million students

To comprehend the pace at which Florida parents are choosing education options for their children, look no further than charter schools. In the past two years, charter enrollment increased by 49,116 while total public school enrollment went up by only 2,096.

Put another way, in 2013-14, one in every 12 students attended a charter school – a form of education that, in Florida, is still just a teenager.

national school choice weekCharter schools are only one part of the annual statistical sheet that breaks down Florida’s educational choice “landscape.” The new 2013-14 version speaks to why National School Choice Week chose to kick off activities this year in the Sunshine State.

The bottom line, though not greatly different than last year, is still jaw-dropping: Last year, 1,479,685 preK-12 students chose something other than their traditional district-assigned school – 42 percent of all students.

That speaks to a new normal in public education.

The choice landscape sheet is built with state Department of Education data parsed by the Office of Independent Education and Parental Choice in partnership with Step Up For Students, which co-hosts this blog. The state tracks a wide assortment of educational options in the 67 school districts.

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Corporate contributions are a good fit for Georgia’s scholarship program

Editor’s Note: The following commentary was published today on the Georgia Public Policy Foundation Forum. It is in response to a previous Forum post by Georgia GOAL founder Jim Kelly.

GPPF-LogoFlorida is one of 14 states that provide tax credit scholarships to children who can’t afford a private school, and a financial approach born of necessity has become one of its greatest strengths. Since the state has no personal income tax, its scholarship relies exclusively on tax-credited contributions from companies.

Those contributions, in turn, have fueled the largest scholarship program in the nation.

In its 13th year, the Florida program is now serving nearly 69,000 of the state’s most economically disadvantaged students in more than 1,500 private schools. The total contributions this year will approach roughly $350 million. In 2012, Education Week described the Florida scholarship law as a national “model.”

The scholarship serves truly needy students, and test scores show they are making solid academic gains. The average household of 3.8 persons has an income is $24,156, or 5 percent above poverty. More than two-thirds of the students are black or Hispanic, more than half from single-parent homes. More telling, these students were the lowest academic performers in the public schools they left behind, and for six consecutive years they have achieved the same standardized test score gains as students of all income levels nationally. Continue Reading →


Why it is wrong and misleading to call FL’s tax credit scholarship a “voucher”

Teacher unions have sufficiently tarnished the word “voucher” in the public education arena that they insist on using it even when it is wrong. But the legal fight now underway in Florida over a “tax credit scholarship” should help clarify the difference.

Indeed, it could decide the case.

The distinction is straightforward. Merriam-Webster defines a voucher as “a coupon issued by government to a parent or guardian to be used to fund a child’s education in either a public or private school.” A tax credit scholarship, on the other hand, comes from tax-credited contributions made by private companies to a private nonprofit organization that in turn hands out the money. In short, one is a check from the government, the other from a private organization.

Not surprisingly, when the Florida Education Association and Florida School Boards Association announced their constitutional challenge to the Tax Credit Scholarship on Aug. 28, their press release used the word “voucher” 21 times. The formal complaint used it 45 times. But the FEA is using “voucher” not because it is correct but because it feeds a legal strategy. The FEA wants the courts to see the scholarship as no different than the government-issued voucher program the Florida Supreme Court ruled unconstitutional in 2006. Though it acknowledged in its filing that the scholarship “relies on a different (funding) mechanism,” it wants the program to be treated the same nonetheless.

That may be a smart legal tactic, but it doesn’t change the meaning of “voucher.” It also doesn’t change the separate constitutional case law that has emerged around tax credit scholarships. Though some state supreme courts, including Florida’s, have ruled that school vouchers violate their constitutions, none has ruled against tax credit scholarships.

In fact, the same day the FEA filed its suit, the New Hampshire Supreme Court rejected a constitutional challenge to that state’s Education Tax Credit Program. The court said the plaintiffs lacked standing because their claims of lost funding to public schools were merely “speculative” due in part to the fact that the money was not withdrawn from the treasury.

Though the New Hampshire ruling is timely, the Arizona courts provide a better comparison. That’s because the Arizona Supreme Court ruled in 2009 that a government-issued voucher for special-needs students and foster children was unconstitutional. But the same Supreme Court also ruled in a previous case, called Kotterman v. Killian, in favor of a tax credit scholarship.

In its 2009 decision, the Arizona court explained why it reached different conclusions: “Because the funds in Kotterman were credits against tax liability, not withdrawals from the state treasury, the funds were never in the state’s treasury; therefore, the credits did not constitute an appropriation. Unlike the funds in Kotterman, the funds at issue here are withdrawn from the public treasury and earmarked for an identified purpose.”

Even more important, the U.S. Supreme Court has weighed in. Continue Reading →


FL’s school choice scholarship program is far cry from a ‘moneymaker’

FEA Vice President Joanne McCall

FEA Vice President Joanne McCall

Florida Education Association Vice President Joanne McCall has an obvious motive to discredit the nonprofit that administers a scholarship program she is suing, but her recent claims about its spending practices are nonsensical. Since they also track a growing teacher union narrative suggesting misappropriation in the tax credit scholarship programfor low-income students, they’re worth addressing.

First, the new claim. Asked to respond to a full-page advertisement in the Tallahassee Democrat from a diverse coalition of faith, community and education leaders that urged FEA to drop its lawsuit, McCall told SaintPetersblog: “About 3 percent of that scholarship money is being used to do this media campaign, and I’m not sure that taxpayers want their money used for that.”

The money for the scholarship, now in its 13th year and serving nearly 69,000 underprivileged students, is raised and distributed almost entirely by Step Up For Students, the nonprofit that also co-hosts this blog. So the implication is that Step Up is robbing from scholarship students to support a newspaper advertisement or media campaign that, by her math, would cost $10.7 million this year.

Since my own paycheck is from Step Up, I, too, have an obvious motive to try to discredit. But SaintPetersblog editor Peter Schorsch beat me to it. The claim was so preposterous that he apparently gave McCall the opportunity to edit her own quote. She declined, sparking Schorsch to call her “reckless” and “desperate.”

Unfortunately, it’s also becoming par for the course.

To set the record straight, the advertisement was financed by a group called HCREO, or Hispanic Council for Reform and Education Options. The ad was placed by a top-drawer communications consultant, Sachs Media Group, that is being paid by the Alliance for School Choice, a national education advocacy group that is fighting the lawsuit. In other words, neither the ad nor the Sachs contract is being financed by Step Up.

The 3 percent, though, is not a number McCall pulled from thin air. Under Florida law, state-approved scholarship organizations that operate for three full years with clean audits are then allowed to keep up to 3 percent of the tax-credited scholarship contributions in subsequent years to pay for administrative expenses. Given that the scholarship program this year is $357.8 million, that administrative allowance is now $10.7 million.

The FEA has likened that allowance to a management fee or even a profit. At its announcement of the lawsuit in August, FEA attorney Ron Meyer went so far as to call the program “a moneymaker for scholarship funding organizations.”

If Meyer’s assertion were true, Florida would have nonprofits lined up to get a piece of the action. Continue Reading →


FL’s average school choice scholarship family makes $24,067 a year

The average household income of K-12 schoolchildren on Florida’s tax credit scholarship dropped by nearly $700 this year, placing it only 4.5 percent above poverty.

Income graphicThat’s the result of preliminary calculations from Step Up For Students, the nonprofit that helps administer the scholarship and also cohosts this blog. As of Monday, the scholarship was serving 68,768 students in 1,510 private schools across the state — an increase of roughly 9,000 students from last year. The average household income was $24,067 and the average household size was 3.8.

Program officials are not sure what explains the drop. It may be tied generally to the economy, as the jobless rate still suffers and wages have stagnated for those at the lower end of the income scale. It could be that public school students who are at the lower end of the income threshold for free or reduced-price lunch are more inclined to seek the scholarship option. The threshold for the school lunch program, which is also the eligibility level for new scholarship students this year, is 185 percent of poverty or $44,122 for a household of four.

The average household income for the school choice scholarship students has fluctuated in recent years, and was as high as $26,504 in 2009-10. In the state’s annual reports on test score gains, the researcher has repeatedly taken note of the lower average income for scholarship students. As he wrote in this year’s report: “Scholarship participants tend to be considerably more disadvantaged and lower-performing upon entering the program than their non-participating counterparts (in public schools). These differences are very similar to those observed in years past and reported in prior program reports.”

Changes made to the tax credit scholarship law this year  extend the income eligibility for new students to 260 percent of poverty in 2016-17, but the law requires that lower income students be served first and provides only partial scholarships to any student whose household income is above the school lunch standard. At the top income level, which equates to $62,010 for a household, students would receive a half-scholarship.


FSBA leader twists truth on tax credit scholarships



If truth is the first casualty of war, then Florida School Boards Association executive director Wayne Blanton may have been suiting up back in June. His Capital Dateline interview then with Steve Wilkerson described tax credit scholarships for low-income students as a financial drain not only on public schools but on all state government services.

Blanton, a seasoned educator, knows better. So let’s assume the association’s planned lawsuit against the scholarship, to be announced today, was his motivation.

Blanton’s financial assertion is short enough to quote in full:

“We are not a big fan of those type of scholarships. There’re a couple of reasons. No. 1, it’s taking a substantial amount of money every year away from public schools. But the bigger issue, I think, is over the next two years those corporate scholarships are going to siphon off about 2 to 2 ½ billion dollars from the state. Now making my assumption earlier that we get 36 percent of that, for every $1 billion that would be $360 million that public schools do not get. But then there’s over $600 million that doesn’t come into the state at all. It doesn’t come in for child care, it doesn’t come in for health services, it doesn’t come in for the Division of Family Services and things of that nature, it doesn’t come in for corrections. Those dollars not coming into the state are not just detrimental to public schools, it’s detrimental to a lot of other services the state is trying to deliver and has a hard time getting those dollars to them now. So I think we’ve got to take a real close look at that in the big picture – not just education but how those dollars are disappearing from a lot of other entities.”

Readers should be aware that I’m the policy director for Step Up For Students, a nonprofit that co-hosts this blog and helps administer the scholarship that Blanton calls into question. But his misstatements are at such odds with the fiscal reality that they are rebutted by basic state revenue reports and fiscal evaluations.

Let’s begin with the “siphon.” Under state law, the amount of tax credits that can be used toward contributions for the scholarship is capped every year. The Department of Revenue is responsible for overseeing the cap, and here is the link to its latest calculation. The maximum possible amount for scholarships in the next two years is in fact $805.1 million – not $2.5 billion. That’s one-third the amount that Blanton claimed.

Now let’s look at how the loss of those dollars is “detrimental” to all those public services, including schools. Continue Reading →