With the stroke of Gov. Kay Ivey’s pen, Alabama is now the 16th state to put public education funding in the hands of families.
The Yellowhammer State joins 14 states offering education scholarship accounts, and Oklahoma, with a fully refundable tax credit that functions much like an ESA.
Compared to similar programs that are sweeping the country, six features of Alabama’s new program are noteworthy:
The funding mechanism: Like the groundbreaking program passed last year in Oklahoma, Alabama’s Choose Act allows families to qualify for refundable individual tax credits. Families can receive up to $7,000 per child, or the total amount of eligible expenses per child, whichever is less. The Legislature is setting aside $100 million to fund the tax credits in the first year of the program.
Schooling vs homeschooling: Also like the Oklahoma program, Alabama’s tax credit ESAs would treat schooling and homeschooling differently. Tax credits for homeschoolers are capped at $2,000 per child, and $4,000 per household. Only families who send their children to qualifying private schools could receive the full $7,000-per-child credits.
Afterschool, summer and public-school programs: Alabama’s new program covers afterschool and summer programs, which often aren’t included in other states’ ESAs. These programs would have to be delivered by eligible schools to qualify. It also allows parents to spend their funds on contracted services, including classroom instruction, offered by public schools.
No rollover: Alabama families will not be able to roll over funding from year to year to accumulate savings in their accounts.
Testing: Participating schools will be required to administer their choice of qualifying standardized tests and report school-level results to the state.
Prioritization: For the program’s first two years, participation will be limited to families with household incomes below 300% of the federal poverty level. After that, eligibility will become universal.
An Alabama circuit judge today overturned the injunction he had issued just 12 days ago on the state's new private scholarship program.
Circuit Judge Gene Reese had ruled the Alabama Accountability ACT (AAA) unconstitutional on May 28, which meant the program had to end at the conclusion of the 2013-2014 school year. Following that ruling, lawyers for the state and the Institute for Justice filed a motion to overturn the injunction as the case was being appealed to the state Supreme Court. Today, Reese issued a stay on his own injunction against the AAA.
That is good news for the students participating in the private school refundable tax-credit and scholarship programs.
“Today is another step towards victory for Alabama parents and students,” said Bert Gall, a senior attorney with the Institute for Justice. “The trial court’s ruling means that parents across the state can continue to rely on the Accountability Act’s school choice programs while this case moves forward on appeal.”
The Alabama Accountability Act allows parents who transfer their children from low-performing public schools to higher performing public or private schools to receive a refundable tax credit. The AAA also allows for scholarship granting organizations to create private school scholarships from individual and corporate donations. The AAA also provides tax-credits for donations to scholarship organizations.
In a separate order today, Judge Reese also denied parents of the newer scholarship students the right to intervene in support of the program.
Gall says these parents couldn’t participate in the trial court case because they hadn’t yet received scholarships for their children when the suit was first filed back in August of 2013. “It was wrong to deny them the right to intervene,” said Gall, arguing that the tax-credit scholarships will serve many more students than the refundable tax-credits.
(Full disclosure: Step Up For Students, one of the co-hosts of this blog, provides assistance on application processing and information technology to the Alabama Scholarship Fund)
