National group gives AAA scholarship plan failing grade


By Mike Cason/

A national group that promotes tax-credit funded private school scholarships gives the scholarship plan under the Alabama Accountability Act a grade of F. 

In a recently released report, The Center for Education Reform rated Alabama’s law weakest among 14 states that it said have such programs.

The report from the center, which supports school choice and charter schools, did not fault the accountability act for the reason critics usually do – that it diverts tax dollars from public to private schools.

The report rated Alabama’s law poorly because it said the plan will limit participation.

Under the accountability act, donors pay for the scholarships by giving to scholarship granting organizations. Donors get a credit on their state income taxes. Those are income tax dollars that would otherwise go to public education.

The accountability act caps the total income tax credits at $25 million a year. The center’s report praised other states, including Arizona and Florida, that allow their caps to rise based on demand.

The report also criticized Alabama’s law because it places many requirements on the private schools that accept the scholarships.

The center faulted Alabama for allowing scholarships only to students from public schools labeled as failing. 

But that’s partly wrong. Students from any Alabama school, public or private, can receive scholarships if the scholarship organizations have money left after Sept. 15 each year.

The accountability act does place an income limit on eligibility – up to 150 percent of the state median income. The median is about $41,000.

Senate President Pro Tem Del Marsh, R-Anniston, who led the way on passing the accountability act, declined comment on the report.

The Center for Education Reform, based in Washington, D.C., said tax-credit funded scholarships pay tuition for about 190,000 students nationally.

As for the criticism that the programs hurt public school funding, the report says the lost revenue is often less than the state would spend per pupil. 

“A significant benefit of these scholarship programs is to shift the power of choosing a child’s education from the government to the child’s parent,” the report said.

Half of the states with scholarship programs set them up within the last three years, the report said. Alabama’s law passed in 2013.

Here’s how other state laws graded:

A – Arizona and Florida. The report said Arizona’s law encourages the greatest participation by students and donors, with an automatic escalator that increases the tax credits allowed by 20 percent each year the maximum is reached. The report praised Florida’s law for increasing the income eligibility level, dropping a requirement that only public school students are eligible, and having an automatic escalator clause of 25 percent if at least 80 percent of allowed credits are claimed.

B – Georgia, Pennsylvania, Indiana and Virginia.

C – Iowa, New Hampshire, South Carolina, Louisiana and Oklahoma.

D – Rhode Island and Kansas.

The report also ranked the states on participation and implementation, but said that programs in Alabama, South Carolina and Kansas are too new to evaluate.

Alabama’s law faces a state court challenge.

Montgomery County Circuit Judge Gene Reese ruled last month that the law violated the state constitution because of the secretive way it passed the legislature, because it violates a constitutional requirement that income tax revenue be used only for public school teacher salaries and because it violates constitutional restrictions on tax dollars going to private schools and charitable organizations.

The state and parents who intervened in the case are appealing to the Alabama Supreme Court.

Reese issued an injunction against further use of the law but agreed to lift that while the appeal is pending.

Two previous lawsuits that attempted to block the AAA failed.

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