Soaring Corporate Tax Credit Voucher Program Costing Flagler Schools Half a Million Dollars
FlaglerLive | July 28, 2011
Thanks to tinkering from the Florida Legislature, enrollment in Florida’s corporate tax credit vouchers soared last year, with a 20 percent increase in students.
A new law passed by the Legislature last year increased the amount of dollars available for the vouchers, from $118 million to $140 million, allowing the program to enroll 5,761 more students than last year, for a total of 33,000. That $140 million was diverted from public schools toward private schools, at taxpayers’ expense.
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The corporate tax scholarship was set up 10 years ago by the Florida Legislature. It is essentially a private-school voucher program paid for by taxpayers. The state Constitution–and the Florida Supreme Court–forbid taxpayer money to be used to fund private or religious schools, because it contradicts the Constitution’s uniformity clause (private schools receiving vouchers don’t have to follow the standards of public schools, provide the FCAT test or provide reading or speech therapists: the schools don’t have to abide by academic standards).
To get around the ban, companies donate to a state-sponsored non-profit organization called Step Up for Students, which in turn provides the money–legally–as vouchers for students eligible for free or reduced lunches. In exchange, corporations get to deduct their donations from other taxes they owe. Essentially, corporations lower their tax liability–and contributions to the state treasury–by shifting those public dollars to private education.
About 85 percent of those students attend private, religious schools at taxpayers’ expense, according to Sandra Parks, an author and former St. Augustine city commissioner who analyzes the voucher program. Parks’s figures show that last year there were 86 Flagler County students in the program. All but a handful are attending religious schools, at a cost of $340,800 to taxpayers.
All but a few of those students would be in public schools had it not been for the voucher program. By not attending public schools, the Flagler County school district lost out on $500,000 in funding, since the state allocates education money based on enrollment.
“You see how many teachers that can translate to at a time when teachers are being laid off, and programs are being cut,” Parks said. “So this is the hidden little secret that Step Up for Children and our Legislators do not want to acknowledge. Paying for the education of those students, those 79 students, has been shifted from sales tax, liquor tax, corporate tax, insurance premiums, to the property owners of Flagler County. Are you getting the picture?”
The enrollment surge in the voucher program led Step Up For Students to stop accepting applications in May when it hit 33,000 new students. Last year, the program cut off new applicants in September.
“It enabled the program to grow, but didn’t do anything to stimulate student demand,” said Step Up For Students spokesman Jon East.
Why demand increased so much is anyone’s guess, East said, attributing much of the program’s growth to word-of-mouth, saying the organization has a small marketing budget.
The Legislature has nudged along the growth of the program since its inception.
The biggest expansion was in 2010, when the Legislature approved a new law that allows the program to increase enrollment every year by 25 percent if 90 percent of the capped amount is reached. Next year, the program expects to have a 25 percent increase because it is likely to meet the new cap of $175 million.
This year, the Legislature only tinkered with the program, passing a new law that allows corporations to receive a tax credit worth 100 percent of their donation in all tax categories, rather than 75 percent for some taxes under the old law.
Populous urban areas such as South Florida, Orlando, Jacksonville and Tampa Bay area have the most students enrolled in the tax credit scholarship, making up well over half of the total enrolled students.
The regions that showed the most growth in students getting the tax credit voucher last year, according to data provided by Step Up For Students, include South Florida counties Miami-Dade, Broward and Palm Beach, but also less populated areas like Marion, Volusia and Flagler counties.
In Miami-Dade County, 1,440 more students attended private schools through the voucher program.
Each student gets a scholarship worth $4,011, a percentage of what the school district would have received from the state to educate them in a public school.
Broward County private schools gained 615 more voucher students and Orange County private schools brought in 513 more voucher students.
Not all school districts lost students to the tax credit voucher. Leon and Okaloosa County, among others, actually had fewer students enroll in the program than the year before.
When it was first introduced, the corporate tax credit voucher program was primarily supported by Republicans. Many Democrats expressed concern it would hurt school districts by pushing more students, and more funding, toward private schools. Ten years later, more Democrats have voted for efforts to expand the program.
Campaign contribution records show this increased support also coincides with donations from Step Up For Students backer John Kirtley, or political action committees he runs.
But many Democrats say they support the program because it has become popular with their constituents.
The system has little transparency or accountability: Outside of Step Up for Children, the state doesn’t keep track of what schools are receiving vouchers or what schools are accredited. Some schools were created in order to cash in on the voucher system.
The average household income for the program was $25,971, according to Step Up For Students. Two-thirds of the voucher students enrolled in private schools last school year were black or Hispanic, the group said.
“One of my greatest concerns is the growing acceptance that school choice is a right,” Parks said. “I have studied the history of this movement. I can tell you where it came from, but it’s not just in Florida. Doesn’t it seem a little strange to you that in Florida we don’t think children have the right to health care, we don’t think that children have the right to proper nutrition, we don’t think that children have the right to an environment we’re sure is free of toxins that can be harmful to them–you know the EPA got really cut down in that last budget round, Scott really hacked that–but nevertheless the people that are making the decisions believe that all children have the right to a private school education. They do as long as they pay for it. ” But taxpayers are footing the bill, Parks said.
–FlaglerLive and News Service of Florida