A brand new scholarship granting organization (SGO) in now in operation to take in contributions and direct them to private school scholarships. Read about it here. However, this one is unique as only students attending Catholic schools in central and north Alabama can get scholarships.
While it is officially known as C2 Scholarships, it could just as easily be named the “Get More Bang For Your Buck” SGO.
Here’s why. Under the law creating the Alabama Accountability Act, contributors to a SGO get a tax CREDIT from the state of Alabama on their state income tax. This means if they contribute $1,000, the state allows them to deduct $1,000 from their Alabama income tax bill.
However, if the same person gives $1,000 to a Catholic school for a scholarship, they only can claim a tax DEDUCTION on their state income tax. Suppose the donor is in the 30 percent income bracket, then they only get a deduction of 30 percent times $1,000 ($300) when they file.
According to my sources at the state revenue department, SGOs are the only charitable organizations that are treated this way. Everyone else, like Boy Scouts, United Way and your church don’t qualify.
This is just one more flaw in this law that has diverted $145 million from Alabama public schools.
From the beginning, Catholic schools have gobbled up SGO scholarships. A quick check of scholarships awarded last fall from five SGOs shows that three of them gave out a total of 1,127 scholarships to Catholic schools. That is 30 percent of the total of 3,659 awarded in the quarter ending Sept. 30, 2018. The largest recipient was McGill-Toolen in Mobile with 116. According to info on the school’s website, that is about 10 percent of their student body on AAA scholarships.
Though Sacred Heart Catholic in Anniston only had 47 scholarships last fall, that is about 17 percent of their student body. And it is common knowledge around Anniston some scholarships are used to recruit basketball players. Sacred Heart got their first AAA scholarships in 2015. That same year they won the boy’s state basketball title in division 1 A. They did the same in 2016, 2017 and 2018. This year they competed in division 2 A and finished as state runner up.
Since a donation to a SGO never gets to the state, technically it is not state money funding scholarships. This is how we skirt the prohibition about church and state. However, since the state is giving a dollar for dollar tax break to donors on their income tax and all income tax goes directly to the Education Trust Fund, public schools are still the loser in all of this.