Group claims state scholarship system skewed for donors
by Ray Henry
Associated Press Writer
January 28, 2013 12:09 AM | 625 views | 0 0 comments | 3 3 recommendations | email to a friend | print
ATLANTA — A scholarship program designed to help children escape failing public schools and afford private education may be abused to aid children of scholarship donors, according to a complaint to be filed with tax officials obtained by The Associated Press.

The allegations raised by the Southern Education Foundation are the latest against a scholarship system that has been criticized for aiding children already enrolled in private schools and accused of encouraging wink-and-nod financial arrangements between donors and scholarship recipients.

The foundation said it would file a complaint Monday asking Georgia tax officials to investigate what it called irregularities in a four-year-old tax credit program intended to raise money so students from troubled public schools can afford private school tuition. The foundation’s research showed that in some cases donors may be allowed to earmark donations for individual students despite prohibitions against it.

While the report does not prove wrongdoing, it suggests at a minimum that rules are being bent.

“We have never had a system of taxation in which people get to decide individually where my taxes should go, especially not to decide I will only pay taxes if it only helps my family,” said Steve Suitts, the foundation’s vice president.

Rep. Earl Ehrhart (R-Powder Springs), a co-sponsor of the legislation that passed in 2008 and CEO of scholarship provider Faith First Georgia, said the SEF was unfairly attempting to discredit users of the tax credit program. He threatened to sue the organization over its complaint.

“They care about the failing education system, not about the children,” he said.

At issue is a 2008 tax credit approved by the Georgia General Assembly and signed into law by then-Gov. Sonny Perdue, a Republican. Supporters said the law would raise money so low-income families with children in poorly performing public schools could afford private school tuition, which can cost thousands of dollars a year.

Under the system, people can receive state tax credits by giving nonprofit scholarship providers donations of up to $1,000 for individuals, up to $2,500 for married couples or up to 75 percent of a corporation’s state income tax liability. Georgia caps the tax credits at about $50 million annually. Donors can earmark their contributions for specific private schools but not students.

Foundation researchers found evidence that those rules may not be strictly enforced.

For example, the Georgia Student Scholarship Organization has received more than $22 million for scholarships since 2008, according to the foundation’s report.
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