BRIEF: School Choice in the States May 2014

Alabama – Stephanie Linn @StephanieJLinn

The Montgomery County Circuit Court struck down the Alabama Accountability Act as unconstitutional. The Accountability Act contains two private school choice programs: a tax-credit scholarship program and a refundable tax credit program.

Judge Gene Reese ruled the Act violates the Alabama Constitution’s single-subject rule, which requires legislation to focus on only one subject. Alabama Attorney General Luther Strange said the state will appeal the ruling. The Institute for Justice, a public interest law firm that represents parents participating in the Accountability Act’s school choice program, will appeal the decision to the Alabama Supreme Court.

The Alabama Supreme Court blocked a challenge to the Accountability Act last year. Just a few weeks ago, a U.S. District Judge dismissed a lawsuit that challenged the Alabama Accountability Act on grounds that its school choice program violated equal protection.

Alaska – Michael Chartier @mchart1

Gov. Sean Parnell signed into law HB 278, which created, among other things, a tax credit for corporate donations to private and other non-public schools. This is not a school choice program per se, but it can be used voluntarily by schools to offer scholarships to current public school students.

In addition to the income tax credit for corporations, fishing and mining industries are also separately eligible. A 50 percent credit is granted to the first $100,000 in donations. After that, a 100 percent credit is given on the next $200,000, and then the credit reverts back to 50 percent for anything above $300,000. No one company’s tax credit can exceed $5 million, but there is no overall cap on tax credits. A donation of $9.8 million yields the maximum tax credit.

The Friedman Foundation will follow this new program closely as it could serve as a model for future states.

Delaware – Stephanie Linn @StephanieJLinn

There is legislative movement in Delaware. Stay tuned for our June update!

Florida – Stephanie Linn @StephanieJLinn

Florida’s legislature passed a bill May 2 that includes an education savings account (ESA) for students with special needs—called the Personal Learning Scholarship Account—along with an expansion of the existing Florida Tax Credit Scholarship Program.

The new Personal Learning Scholarship Account program would allow students with special needs to receive an ESA funded by the state and administered by an approved scholarship funding organization. Parents could use the ESA to pay for a variety of educational services, including private school tuition, tutoring, online education, curriculum, therapy, post-secondary educational institutions in Florida, and other defined educational services. The customization aspect of the program offers benefits similar to Arizona’s Empowerment Scholarship Accounts.

Florida’s Tax Credit Scholarship Program, the largest of its kind in the nation, was expanded to increase student eligibility. Once the bill becomes law, students will no longer be required to spend the prior year in public school before they participate in the program. Students from some middle-income families also will be eligible to participate; the household income cap was raised from free and reduced-price lunch (this year, $43,568 for a family of four) to a household income cap not to exceed 260 percent above the federal poverty level (this year, $62,010 for a family of four). Foster children and siblings of current scholarship students also were made eligible to participate in the program. Finally, the bill raises the maximum scholarship amount from approximately $4,800 to $6,000.

The bill likely will be delivered to Gov. Rick Scott’s desk in June. He is expected to sign it into law.

Louisiana – Leslie Hiner @LeslieHiner

Louisiana’s statewide voucher program was fully funded once again, and expanded funding was provided for children with profound disabilities and children who wish to participate in career education and dual enrollment classes.

Students who previously used a voucher to attend a private school under Louisiana’s Scholarship Program may now, as a result of HB 780, switch to the Tuition Donation Rebate Program, which provides tax credits for contributions to school tuition organizations that grant scholarships, creating another opportunity for parents and children to access schools of their choice.

Public school choice was also created, through SB 61, to allow students in public schools graded D or F to switch to a public school rated A, B, or C.

Missouri – Leslie Hiner @LeslieHiner

Strong support exists for school choice in Missouri, as documented in a survey released by the Friedman Foundation May 6. When asked which type of school voters would choose if they could choose, 32 percent chose regular public schools whereas 63 percent chose the other options—private schools, charter schools, online programs, or homeschooling. Charter schools were favored by 64 percent; vouchers, by 62 percent; tax-credit scholarships by 68 percent; and education savings accounts by 58 percent. The Friedman Foundation and its release partner, the Show-Me Institute, discussed the implications of this survey in the Columbia Daily Tribune in light of legal developments over an interdistrict transfer policy.

North Carolina – Leslie Hiner @LeslieHiner

An injunction that prevented North Carolina’s Opportunity Scholarship Program from distributing vouchers to low-income families was lifted by the North Carolina Supreme Court on May 15, granting a motion filed by the Institute for Justice, which is defending parents in the case. This new voucher program may now proceed while litigation moves forward in the North Carolina Supreme Court, giving at least 2,400 children the opportunity to attend a school that will fit their unique educational needs and the wishes of their parents.

Oklahoma – Leslie Hiner @LeslieHiner

The Oklahoma Equal Opportunity Education Scholarship was significantly improved thanks to the addition of five key amendments to the program.

1. Subchapter S corporations were added to the list of those that could qualify for a state tax credit for contributing to a scholarship granting organization. Oklahoma is ranked fourth in the country in the percentage of adults who own their own businesses, so this amendment greatly increases the number of potential donors for scholarships.

2. State tax credits awarded to LLCs and Subchapter S corporations may now flow to the individual shareholders and partners, further incentivizing small, local businesses to contribute to scholarship granting organizations.

3. Individual and corporate contributions will now be combined into one funding pool, which will eliminate unnecessary red tape.

4. Those who commit to donating funds for multiple years will enjoy a higher state tax credit rate. Single-year contributors will continue to receive a 50 percent state tax credit, while those making multi-year commitments will enjoy a 75 percent state tax credit. This builds funding stability into the program while encouraging greater participation by donors.

5. The scholarship amount, based on a percentage of the funding amount a child would have received to attend a public school, will no longer be calculated based on a statewide average of per-pupil funding. This single source calculation will eliminate disparities in the amounts of scholarships and will further simplify the program.