Bill to broaden tax credits for Alabama Accountability Act advances

A bill that would add new options for tax credits for donors to scholarships created by the Alabama Accountability Act was approved by a Senate committee after a public hearing today.

The bill, by Senate President Pro Tem Del Marsh, R-Anniston, who led the controversial passage of the Accountability Act four years ago, moves to the Senate.

The Senate Finance and Taxation Education Committee approved the bill on a 9-4 vote, with Democrats opposing it.

The bill would not raise the $30 million annual cap on tax credits that can go to scholarship donors.

But it would allow companies to receive a credit on their utilities gross receipts tax, in addition to the income tax credit already allowed.

It would make other changes, including allowing taxpayers to take a credit on up to 75 percent of their income tax liability, up from 50 percent now.

Marsh said the goal is to make it more likely that the $30 million cap is reached so that students who receive scholarships don't lose them in subsequent years because donations fall off.

Donors gave $19.9 million to the scholarship granting organizations last year, down from $25.8 million in 2015, according to the Alabama Department of Revenue.

Money claimed as tax credits would otherwise go to public education, which  is a key reason the Accountability Act has been controversial.

Scholarship granting organizations must use at least 95 percent of the tax-credit funded donations for scholarships, which cover tuition and mandatory fees.

Marsh's bill would also allow scholarship money to be used to pay for school uniforms, school supplies, tutoring, transportation and certain other costs associated with attending private schools. Those costs could not exceed $800 and would come from the 95 percent share.

Alabama Association of School Boards President Pam Doyle, School Superintendents of Alabama Executive Director Eric Mackey and public education advocate and blogger Larry Lee all spoke against the bill.

Speaking in favor of the bill were Reilly Birditt, a senior at Chambers Academy who receives an Accountability Act scholarship, Hansell Gunn, chancellor at Gunn Christian Academy in Birmingham, and Mary Coleman, whose granddaughter receives an Accountability Act scholarship.

Democrats have generally been opposed to the Accountability Act since it passed in 2013.

That came after the tax credit-funded scholarship program was added on to a bill about other school system policies in a conference committee and passed hurriedly over the shouts of Democrats.

Under the law, students who meet income requirements can receive the tax credit-funded scholarships to attend private school.

Students who are zoned for schools designated as failing get first priority for the scholarships.

The Accountability Act was originally billed as a way to help students zoned for failing schools.

Critics say it hasn't worked out that way, as about two-thirds of the roughly 4,000 students who received scholarships this year were not zoned for failing schools.

Failing schools are defined as those that rank in the bottom 6 percent statewide on standardized tests.

Marsh's bill would change the term "failing" to "underperforming" in the law, a change he said came at the request of those in the education community who opposed the failing label.

Sen. Rodger Smitherman, D-Birmingham, said it was wrong to give scholarships to private school students that exceed the state's per pupil spending on public school students.

The Accountability Act allows scholarship of up to $6,000 for elementary students, $8,000 for middle school and $10,000 for high school.

The average state per pupil expenditure for public schools is in the range of $5,500 to $5,800, according to a representative from the Legislative Fiscal Office who was at the meeting.

"You know that ain't right, what we are doing to these students," Smitherman said.

Smitherman said programs that take money from public schools, like the Accountability Act, would ultimately lead to the demise of public education.

Marsh responded by saying he was an advocate for public education and said the amount of the scholarship program amounted to less than 0.5 percent of the $6.3 billion that will be spent from the Education Trust Fund this year.

"We're talking about not raising the cap, not changing a thing, taking less than one-half percent of the total education budget to say there should be a segment of school choice," Marsh said.

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