Justice is on the side of school choice and the families who use it.
That was the outcome this week in Alabama, where the state’s Supreme Court overturned a lower court’s attempted termination of the Alabama Accountability Act, a law that included two school choice measures: a tax-credit scholarship program and an individual refundable tax credit.
In a near unanimous 8-1 decision, the Alabama Supreme Court followed the precedent set three times by the U.S. Supreme Court—in its review of school choice vouchers, tax-credit scholarships, and individual tax credits—stating that the Alabama Accountability Act:
Also did not violate the prohibition against appropriating money to non-state charitable or educational institutions because the refundable tax credits…are made to the parents of students transferring from a failing school and are not paid to a non-state charitable or educational institution.” In layman’s terms, money goes to parents—not schools. That makes it constitutional.
Although only 4 percent of Alabama K–12 students’ parents/guardians are eligible for the refundable tax credit, 55 percent of families statewide qualify for the Alabama Accountability Act’s tax-credit scholarships, which were worth an average $2,699. The Alabama Supreme Court’s ruling gives those families the comfort they need to apply for scholarships or tax credits without fear of them being revoked.
The Friedman Foundation, along with so many great state partners, has been supporting the school choice movement in Alabama for many years now, and we are grateful that thousands of families can rest easier knowing that their educational freedom is secure.
Also, with this ruling, Alabama’s school choice leaders should consider expanding both programs to reach more families interested in choosing better schooling environments. Here are some suggestions:
Education Scholarship Program (Tax-Credit Scholarships)
Alabama’s tax-credit scholarship program has a low cap ($25 million) relative to similar tax-credit scholarship programs in other states. The state should consider allowing automatic increases in the cap each year (similar to Florida’s program). Also, although it is positive the program opens up opportunities for students in non-failing public schools, the bifurcated process for distributing scholarships is difficult to navigate for schools, SGOs, and parents. The state should consider dropping the failing school provision altogether to bring clarity to the application process.
Alabama Accountability Act of 2013 Parent-Taxpayer Refundable Tax Credits
With only 4 percent of families in the state eligible for the credit, Alabama policymakers should consider universal eligibility similar to Illinois’ tax credit program. Policymakers also should consider amending this program to allow more money to follow participating students. The amount of money parents receive through Alabama’s credit is less than the average funding parents receive through private school choice programs in other states. The credit is worth up to 80 percent of what the state spends per student. The sending public school keeps the remaining 20 percent of state funding, in addition to any local or federal money associated with the cost of educating the transferring student. An effective next step would be to allow all of the state money to follow the child to his or her school of choice.
Such improvements are not limited to school choice in Alabama. School choice supporters in other states always should be considering ways to ensure vouchers, tax-credit scholarships, individual tax credits/deductions, and education savings accounts are delivering for families.
Rulings like the one from the Alabama Supreme Court should keep supporters rolling ahead. After all, school choice is on a roll.