GA Tuition Tax Credit Bill Double Dips Into Taxpayer Wallets – By Joel Aaron

February 01, 2013

huge.1.7648 150x150 GA Tuition Tax Credit Bill Double Dips Into Taxpayer Wallets   By Joel AaronLegislation filed in the House and Senate Tuesday will expand the cap on Georgia’s successful tuition tax credit program while changing it in a fundamental way that amounts to a detrimental double dip into taxpayers wallets on behalf of a public education system that is already failing. The 2008 law allows individuals and corporations to claim a tax credit for a portion of their tax liability that they redirect to one of a series of student scholarship organizations in Georgia. These SSOs benefit students looking to move from a public school that is not meeting their needs to a private school within the State.

The new legislation, House Bill 140, does the right thing by expanding the program from its current $51.5 million cap to $80 million; however, the bill sets aside another $100 million worth of eligible tax contributions for public school expenses including administrative bonuses to a system rife with administrative overcompensation, broken bureaucracy and a poor performance record. Georgia’s K-12 public education system is subsidized by nearly 50 percent of the state’s annual tax revenues, not including federal dollars, private grants and millions in outside contributions. The Bureau of Labor Statistics pegs K-12 public school education administrator salaries at $87,470 median, with the lowest 10 percent earning up to $58,600 and the top 10 percent earning up to $128,660. This is greater than similar positions in postsecondary education. In Georgia and elsewhere, per pupil spending costs average over $10,000 annually. This cost is disproportionately due to administrative expenditures that this tax credit would exacerbate through additional funding mechanisms. According to the National Center for Educational Statistics, K-12 education expenditures have more than doubled in the past 30 years, while student performance in math and reading and student graduation rates have remained flat. Despite the expense, Georgia currently ranks 47th nationwide in high school graduation rates.

HB 140s public school tuition tax credit provision is patterned after a similar program in Arizona that has become disastrously self defeating for the purposes of providing more choice to needy students. In practice, the program has widened the inequality between privileged and less privileged students as outside pressure encourages individuals and corporations to support public student scholarship organizations over SSOs that benefit private institutions. The public program has also been prone to abuse as parents contribute their tax liability portion to public school SSOs to fund after school programs – like art and music lessons – for wealthy schools where parents would normally pay out of pocket. In many cases, this has proven to be a needless subsidy for after-school prep activities.

The purpose of a tuition tax credit scholarship like Georgia’s current program is to give students more choice to take advantage of a better educational environment for meeting their needs. Subsidizing the same environment that is failing them adds insult to injury and only digs a deeper hole.

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