Tax-credit scholarships are welfare for the wealthy? Hardly

Georgia students attend a school choice rally in Atlanta, January 2014. (AJC/Kent D. Johnson)

Georgia students attend a school choice rally in Atlanta, January 2014. (AJC/Kent D. Johnson)

Georgia students attend a school choice rally in Atlanta, January 2014. (AJC/Kent D. Johnson)

If we wait long enough, critics of Georgia’s tax-credit scholarships just might admit the data we have about the program present a different picture than the one they’ve been drawing.

Three years ago, complaints about opacity prompted legislators to require more reporting about the program, which awards state income-tax credits to those who donate to approved private-school scholarships. The state now reports some basic demographic data about scholarship recipients.

So far, we only have data for 2013; figures for 2014 should come out later this year. The data show there were more scholarships awarded to students from the highest-earning 25 percent of Georgia families (2,248) than the lowest quartile (1,719).

So, does this program favor “the rich”?

As some context shows, absolutely not.

The largest number of recipients by far — 3,126 — are in the second-highest quartile. Next comes the second-lowest quartile, with 2,531. In all, almost 60 percent of the scholarships go to kids in the middle half of the income spectrum.

OK, but what about all those kids in the top group? Should any of them be getting anything? Aren’t they affluent by definition?

That depends. Does your definition of affluence begin at $62,202 per year? That is where the top income quartile begins.

In fact, it is possible in Georgia to be in that top income group and still qualify for free and reduced-price lunch at public schools.

How? One factor in determining free and reduced lunch eligibility is the size of the household. In 2013, a two-parent family with five children (or other dependents) still would have qualified for reduced-price lunch with income of almost $65,900.

What’s more, it’s likely that the value of the scholarships awarded to lower-income families was greater than those awarded to higher-income families.

For example, the largest student scholarship organization, Georgia GOAL, reports that 51 percent of its scholarships have gone to families whose income is less than $24,000. But those families got almost 56 percent of the money. Families earning more than $60,000 got 3.6 percent of the awards, but 3.1 percent of the money.

Another instructive example comes from Arete Scholars. To receive a scholarship from Arete, one’s family income must be below 185 percent of the federal poverty level (full award) or no more than 245 percent of FPL (partial award).

So it’s worth noting that even Arete in 2013 awarded 44 scholarships to families in the top quartile. Why? Because, as we’ve seen, not everyone in the top quartile is actually affluent.

Still have doubts? Here’s a reference point: In Atlanta, a two-adult, two-child family with income at 245 of FPL could also get a subsidy for half the cost of a “silver” health-insurance plan on the Obamacare exchange.

Personally, I want choices for all students, in all places, at all times. But for those who disagree, the data simply do not support the idea “wealthy” people are getting all, most, or even a disproportionate share of the scholarship money. They come much closer to suggesting the reverse.

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111 comments
Wascatlady
Wascatlady

Kyle, can you share the percentage of families with five children who earn $62,202 per year?  I am guessing, based on only my observations over the last 40 years of teaching, that few families earning that amount have five children.  Just wondering.


Even if the state demanded means testing and a certain minimum for these scholarships, I cannot support them, as that means the rest of us have to make up the slack.  You want your child to go to a private school?  Buck up, then, and pay for it.  You don't get a pass on providing your fair share of the other things "your" tax money pays for!


Now, if you propose that you get the share of your property tax paid for school, to use for a private school, less a set amount as your civic responsibility for public schools for the good of the community (and your property value), with the understanding that you cannot opt back into public school unless you return the tax break, well, I am okay with that.  So, say you pay $5000 in property tax, and $4000 of that is school tax.  Less, say, $2500 for your share of the community good, leaves you the princely sum of $1500 total to spend on private school (or to keep, if you home school.)  Fair enough.  And you have two kids?  Good luck finding one of those $750 private schools.

FIGMO2
FIGMO2

Personally, I want choices for all students, in all places, at all times.

A picture is worth a thousand words, and the one included at the top of your column is revealing.

I'm guessing the little blonde is the affluent one?

schnirt 

MHSmith
MHSmith

@FIGMO2 

I'm not guessing and this is all about political control and the envy some libs have for their evil rich boogieman.

So what if some "so-called rich kid" gets a nickle from "uncle sugar" for education expenses.

I'll bet the so-called "rich people" these libs are trashing on this blog pay as much and LIKELY A GREAT DEAL MORE IN TAXES than these whiners!

And, BTW, nobody is genuinely serious about full public funding of healthcare and education in this country. So, this phony concern just doesn't convince me of any sincere standing up for doing the right things.


straker
straker

I Whine - "and why is medicaid in need of expansion"


Well, golly, maybe its because the number of very poor people in America just keeps getting higher every year.

RafeHollister
RafeHollister

Seems the looney proggies here, as well as Obama, think that we should discourage self reliance.  Make a dollar or two more than they think "you need" and they wish to punish you, by denying you admission to programs available to all other citizens.  


Obama now wishes to punish folks, who have the discipline and foresight to save for their children's college education, by taxing their tax free 529 college accounts. 


This approach encourages more dependence on Government as folks say "why bother", just what we do not need.   We need to quit rewarding failure and do things to encourage/push/prod/help/encourage people to do better for themselves and their families.

Jimmyliscious
Jimmyliscious

@RafeHollister Next the libs will be wanting a one time tax on private pension accounts. They can't stand having all of that money out of their hands to redistribute. How dare anyone not be reliant on government.

IReportYouWhine
IReportYouWhine

And why is medicaid in need of expansion, did it not cover the procedure, I mean, problem?

Kyle_Wingfield
Kyle_Wingfield moderator

@HeadleyLamar I thought this was in reply to the earlier comparison with Medicaid (I can't see the threads in the back-end software) but having seen it now I'll nip this one in the bud.

Claver
Claver

So, how many of the people on here who support the top quartile getting this "scholarship" are opposed to the bottom quartile getting Medicaid?

IReportYouWhine
IReportYouWhine

@Claver How many here would write health care legislation that  plays political games by holding medicaid hostage from the states?

Hedley_Lammar
Hedley_Lammar

@Claver They love income redistribution too


Upwards to those that don't need it. 

IReportYouWhine
IReportYouWhine

@HeadleyLamar @Claver Yeah, obama hasn't made Wall Street several trillion dollars fatter over the last year or so, oh wait, that was him, wasn't it?


Forgot about that, didn't you?

Doom Classical liberal
Doom Classical liberal

Next door they were acting like millionaires were getting all the scholarships. Too funny. Seems that there's always some stats that reveal the truth. 

IReportYouWhine
IReportYouWhine

@Nobody_Knows @Dynasty The real goal, they suspect, is to finance the movement of middle- and upper-class kids into tax-supported private schools, jay bookman


The upper class?


That's almost as weighted as using fake polls to claim that clinton is imposing, two years out and pre Benghazi Senate Committee hearings. Will the proggies even remember what he wrote?

JustSomeThoughts
JustSomeThoughts

Fantastic spin.  You failed to stratify your stats to paint the entire picture.  Lets be honest about what we are talking about.  If the money is in place to provide lower-income students with an opportunity to receive a higher-quality education to eventually break cycles of being low-income (which will never happen), then earmark the money strictly to the lowest quartile and study the impact for 5 years.  That's what researchers do to generate quantitative and qualitative data that is used to steer policy.  The mentality of this country is that of an abusive couple that stays together.  It's crazy.

Kyle_Wingfield
Kyle_Wingfield moderator

@JustSomeThoughts "If the money is in place to provide lower-income students with an opportunity to receive a higher-quality education to eventually break cycles of being low-income..."

That is one goal of the program. It is not the sole goal of the program.

Penses
Penses

Well crafted argument against some of the things your colleague has written.

MHSmith
MHSmith

Personally, I want choices for all students, in all places, at all times. 

Easy request to fulfill. However you know simply dividing all the public funding for school/education, based on a per-capita bases wouldn't fly with the libs. Anytime the child  of an "evil rich capitalist person" gets as much back from government as a po' person, then it is socially unjust and therefore unacceptable to God and everybody with any sense of moral conscience. So, you'd have to invert the subsidies given on a sliding scale, with those at the top getting very little and them at the bottom income tiers getting most or the largest subsidies being given. 

But let's not concern ourselves with school choice, Kyle. The government education monopoly, a.k.a. teachers unions, allow for only one choice in education: Which says only they can receive public/taxpayer money to educate your children. Otherwise you got to go it alone... Oopsy... "you have to go it alone"  where have I heard that code phrase before Kyle.... who says that? :)     

Hedley_Lammar
Hedley_Lammar

@MHSmith So, you'd have to invert the subsidies given on a sliding scale, with those at the top getting very little and them at the bottom income tiers getting most or the largest subsidies being given. 


Correct. People at the top already have all the breaks. Every door is already flung wide open for a trust fund baby.

Kyle_Wingfield
Kyle_Wingfield moderator

@HeadleyLamar And yet, you've already admitted you don't mind if they get the same amount of taxpayer money spent on them, as long as it's spent in a public school. So it isn't really about the money for you.

MHSmith
MHSmith

@Kyle_Wingfield @HeadleyLamar 

First he cannot back up his cliche - people at the top already have all the breaks. Some people at the top had no or few breaks to make it to the top. Some people MADE THEIR OWN BREAKS AND OPENED THEIR OWN DOORS! .

Secondly: Trust fund baby, is that akin to a Welfare trust fund baby?   


Nah Kyle, it's more than just the money. In fact, it really isn't about just making sure it is about making things equal as possible for all: It seems at times to be more about making sure as much as possible, that all are made "equally disadvantaged"


Remember this one Kyle, "the underprivileged"? Tell me what is wrong with that code phrase. 

It is really a poor state of affairs when people are so envious of someone else that does more, in order to earn, and have more PRIVILEGES in life to be told by the jealous souls of a society they should be the sacrificial lamb in every offering upon the public altar of social justice to create a sense of equal fairness where equal rights have failed to deliver their idea of a social utopia. 



TGT88
TGT88

Nice piece Kyle. Thanks for this. (I wanted to take issue with Jay on this yesterday, as we have personally benefited from this program, but I simply didn't have the time. Nor did I have access to the data as you have. Thanks again.)

Kyle_Wingfield
Kyle_Wingfield moderator

@TGT88 Thanks. The documents are publicly available on the Georgia Department of Revenue's site, but they're a little hard to find.

Hedley_Lammar
Hedley_Lammar

@TGT88 Speaking of that one would really like to know what percentage of kids participating in this program were ALREADY in private schools.


Is that data available ?

Hedley_Lammar
Hedley_Lammar

@TGT88 Another satisfied customer


I'm curious if your kids were in private school prior to this program.


im betting they were. 

Kyle_Wingfield
Kyle_Wingfield moderator

@HeadleyLamar Here's the law regarding student eligibility (short version: child must have been in a public school at least 6 weeks unless he/she is a first grader or younger, or would have to attend a low-performing or dangerous school, or home-schooled for at least one year):

""Eligible student" means a student who is a Georgia resident who, immediately prior to receiving a scholarship or tuition grant under Code Section 20-2A-2 and enrolling in a qualified school or program, was enrolled in and attended for at least six weeks a Georgia secondary or primary public school or who is eligible to enroll in a qualified first grade, kindergarten program, or pre-kindergarten program; provided, however, that if a student is deemed an eligible student pursuant to this paragraph, he or she shall continue to qualify as such until he or she graduates, reaches the age of 20, or returns to a public school, whichever occurs first; and provided, further, that the enrollment and six-week public school attendance requirements shall be waived in the case of a student who, based on the school attendance zone of his or her primary residence, is or would be assigned to a public school that the Office of Student Achievement determines to be a low-performing school, who is the subject of officially documented cases of school based physical violence or student related verbal abuse threatening physical harm, or who was enrolled in a home study program meeting the requirements of subsection (c) of Code Section 20-2-690 for at least one year immediately prior to receiving a scholarship or tuition grant under Code Section 20-2A-2."

Kyle_Wingfield
Kyle_Wingfield moderator

@HeadleyLamar I'd be happy to see some more reporting along these lines required, in a bill that raises the cap to, oh, $100 million or more.

Hedley_Lammar
Hedley_Lammar

@Kyle_Wingfield @HeadleyLamar Me too


How many are going to minority kids etc etc


I'm afraid the more the curtain is pulled back though the uglier it is going to get.


I have a feeling some of the poor kids who do get these scholarships just might be really fast and good at football. I mentioned that over at jays and many agreed


This is Georgia after all. 

LogicalDude
LogicalDude

@Kyle_Wingfield @HeadleyLamar " or would be assigned to a public school that the Office of Student Achievement determines to be a low-performing school,


Thanks Kyle, this is what I was looking for. 

I'd prefer it be a requirement, but seeing as it's an exception to ease entry into a scholarship, then that's a good benefit.  (although it still ain't perfect) :) 

Jefferson1776
Jefferson1776

This is a bad idea and you know it, but hope somehow it helps.

LogicalDude
LogicalDude

So, we think this bill should be for helping low income students. 

Kyle: "It wasn't designed to do that"

Oh, it wasn't?  I thought it was to give students a better chance to get out of failing schools, right?

Kyle: "It wasn't designed to do that" 

Then why the heck are we giving tax credits (not tax deductions) for these scholarships!? 

"to give students a choice"


Oh, well. Okay then. 

If people really want state dollars going directly to scholarships for "choice" and not to help out poor families, or families in failing school systems, then I disagree with those use of funds.  I'd support an appropriate tax deduction for donating, but a full on tax credit is not the best place to support "choice" when there are students in failing school systems who need better educational opportunities.


If people choose to expand this program - and use state dollars from direct tax credits, then raise taxes to fund it.  Otherwise, this is pulling funds from other areas of the budget that need those funds. 

Kyle_Wingfield
Kyle_Wingfield moderator

@LogicalDude As documented here, most of the kids benefiting from the program are from low- or middle-income families. And there are plenty of indications that even kids from the top-quartile families wouldn't be able to exercise this choice without the program. That's all the program ever promised, and it's good enough for me.

I understand it's not good enough for you. Lots of people could say the same things about other tax credits -- e.g., the even larger state income-tax credit available for electric-vehicle buyers -- that you said about this one.

Kyle_Wingfield
Kyle_Wingfield moderator

@CommonSenseisntCommon It is illegal for donors to stipulate who must receive the proceeds of their gift, or for SSOs to insinuate such a match can be made.

But to answer your question: No, we don't claim the tax credit. And we couldn't benefit from the program either way, since our son goes to a charter school, not a private school.

LogicalDude
LogicalDude

@Kyle_Wingfield @LogicalDude " the even larger state income-tax credit available for electric-vehicle buyers"


Ooh, I thought that was a tax deduction.  Will need to investigate further. :) 

Hedley_Lammar
Hedley_Lammar

  • Faith First Georgia, which lists state Rep. Earl Ehrhart as its chief executive officer, granted scholarships to 35 families in the lowest-earning quartile and 173 to those in the highest-earning quartile. (Ehrhart has been a chief proponent of expanding the program.)

Nothing to see here. Please don't look behind that curtain


Thank you...... 


Wanna bet Faith First Georgia schools might sprinkle in a little Religion with those tax dollars ???


LOL

Shar1
Shar1

@Kyle_Wingfield @IReportYouWhine And maybe we can't say because the legislators made sure that we couldn't see enough of where this money comes from, where it goes, whether the curriculum of the receiving school is in line with state standards (which do include the study of evolution, for example) and what the outcomes are in comparison to outcomes of other public and private schools.


Why is this information on the expenditure of public dollars so dangerous that it is illegal to release it?

JackClemens
JackClemens

Thank you for filling in the missing information.