Scholarship granting organizations (SGO) created under the Alabama Accountability Act are required to file an annual report by June 1 each year to the Alabama Department of Revenue. A summary of the reports for 2014 was posted this morning (June 9, 2015) on the ADOR website.
It is interesting reading and a careful review of the numbers confirms what many have felt all along–that the promise AAA was created to help students in poorly-performing schools was more smoke and mirrors than anything else.
Nor does it support the contentions of Senate Pro Tem Del Marsh that there is an urgent need to increase the limit on SGO contributions from $25 million annually to $30 million or that scholarship limits for private schools should be as much as $10,000 for high school students. Marsh just passed SB71, an amendment to the accountability act, that went to Governor Bentley on June 4, that does both.
According to the revenue department, there are nine active SGOs in Alabama. However, three of them had not turned in an annual report by June 8 and one other filed a report saying they had no activity in 2014. In addition, while the Rocket Ship Scholarship fund in Huntsville raised $128,720 in 2014, they did not award any scholarships.
The funds that awarded scholarships in 2014 were: Scholarships for Kids of Birmingham; Alabama Opportunity Scholarship Fund of Birmingham; AAA Scholarship Foundation of Prattville; and Beacons of Hope of Birmingham.
Collectively, SGOs raised $13,311,357 in 2014 and awarded 5,776 scholarships. They also spent $1,412,654 on administrative expenses.
The two major “players” in this program are Scholarships for Kids and Alabama Opportunity Scholarship Fund. (The latter is closely identified with former governor Bob Riley, though info shows that it is actually controlled by an SGO in Florida.) When the accountability act was set up in 2013, Riley’s AOSF came out of the gate like triple crown winner American Pharaoh and by year’s end had collected $17.8 million from 25 donors. On the other hand, Scholarships for Kids raised $6.3 million in 2013.
But 2014 was a different story. Last year AOSF only collected $652,390 while Scholarships for Kids brought in $12,145,367. AOSF used their 2013 funds to award 3,608 scholarships at an average of $4,683 each. Scholarships for Kids gave out 2,076 scholarships at an average of $2,997.
And though the limit for all donations was $25 million in 2014, only $13.3 million was raised.
These numbers immediately call into question why the Marsh amendment wants to increase the cap to $30 million when only 53 percent of the max was reached last year. If the bar is set at 5 feet and no one can clear it, why raise it to 6 feet?
The same is true of raising scholarship limits to $6,000 for elementary students, $8,000 for middle and $10,000 for high school when the average scholarship awarded in 2014 was for $4,072. (Keep in mind that the state of Alabama contributed an average of $5,828 per pupil for all students in FY 2014. So Marsh and his supporters think private school students are worth considerably more than those attending public schools?)
One of the major questions the new summary raises is why did the Riley SGO go from collecting $17.8 million in 2013 to only $652,390 in 2014? (In fact, the summary shows AOSF spent $805,190 on “non-scholarship expenditures” last year, which was more than they collected.)
Marsh blamed this decline on the fact that AAA was ruled unconstitutional on May 28, 2014 and was in limbo the rest of the year awaiting an appeal to the state Supreme Court. He testified to both House and Senate committees that this was the case. The only problem with this logic is why did it not also apply to Scholarships for Kids or to AAA Scholarship Fund? While the Riley SGO was spending more on overhead than it was collecting in 2014, contributions to Scholarships for Kids increased by 91.4 percent and by 200 percent to AAA Scholarship Fund.
Apparently their 665 donors were unaware of the litigation.
But the most damning info in the summary pertains to who got scholarships. After the accountability act mandated that the state department of education identify “failing schools” and we were told repeatedly that helping these schools and their students was the object of the legislation, the numbers do not show this happened.
Of the 5,776 total scholarships given last year, only 49.8 percent went to children previously enrolled in public schools. And only 29.4 percent were zoned to attend a failing school. But this number is misleading because it includes students who were already enrolled in a private school, but were zoned for a failing school. So we can not tell from this information how many students who were actually attending a “failing school” got a scholarship to a private school. But we do know that at least 70 percent of them were not attending a public school or were zoned to attend a “failing school.”
The summary report also sounds an alarm as to how solvent the Riley SGO is at this point.
The accountability act states: “Once a student receives an educational scholarship under this program, the student shall remain eligible regardless of household income until the student graduates high school or reaches 19 years of age.”
So whatever amount of money an SGO uses for scholarships its first year, it has to raise approximately the same amount each year thereafter just to tread water. The Riley group did not do this. In fact, the summary shows they only had $699,898 available for scholarships at the end of 2014. But they needed enough to renew in the neighborhood of 3,500 scholarships.
An internal document from the Riley SGO written several months ago says that funds for 2015-16 scholarships must be on hand by May 1, 2015. But considering that as of June 9, 2015 a total of only $10,917,582 has been donated to all SGOs so far this year, there is no way AOSF has enough funds on hand at present to fulfill its obligations. (Even if AOSF had raised all the money given this calendar year, which seems highly unlikely, it would still be millions of dollars short.)
It’s all a tangled web for sure. And the fact that it hides behind the promise of helping our most vulnerable children makes it downright bizarre.