Alabama’s New School Choice Bill

In an amazing stroke of legislative maneuvering, Alabama’s Republicans added almost 20 pages to a small education bill that was being supported by the Repubs, some Democrats, and even the State Superintendent. It was originally was a piece of legislation that would target persistently failing schools and districts and drive them to innovate and become more academically accountable than they have been. Needless to say, all but the Repubs pulled their support shortly after hearing the revisions, which are discussed below, but the bill still passed the House 51-26 and then the Senate 22-11. The Governor is expected to sign the Alabama Accountability Act of 2013 next week, which is basically a tax credit for private schools for those students currently trapped in failing schools.

Anyone who has seen the recent map of school choice in the U.S. notices that Alabama isn’t exactly school choice friendly. It is one of 8 states in the country without a charter school law (we left out Mississippi because they are in the process of drafting one), and the Alabama Education Association is one of the most powerful teacher unions in America. So, you may be asking how did a state so dead set against popular and transparent charter schools suddenly adopt a bill that will give public money to private schools without any transparency clauses whatsoever?

Well, let’s look at the bill.

First off, the tax credit isn’t 100% of the private school tuition, it’s 80% of what the per pupil funding rate for each student would be in a public school. In 2011-12, Per Pupil Expenditure in Alabama was $8,734. This number is misleading because expenditures are frequently higher than the funding rate, which is calculated off each school’s Average Daily Membership (ADM). ADM is weighted, so schools receive more money for higher percentages of kids on Free or Reduced Lunch (FRL), or even children whose second language is English, but overall that $8,734 is what we have to work with sometimes because most Departments of Education don’t like to release data during the year of measurement.

That said, students seeking a private alternative to their failing public schools would only get about $6,987 in tuition for that year (Correction on 3/5/2013: the state total is actually closer to $3,500 towards tuition. The previous number includes federal and local contributions, which are not a part of the tax credit). If tuition was more than that, the parents would have to pay the difference out of pocket. If tuition is less, the state doesn’t have to pay the full 80% of ADM ($3,500ish) to the family, just the amount used on the student. In essence, just like most scholarship tax credit programs, the state would be saving a large amount of money because no matter which school the student chose, the ADM figure would never be more than 80% of what the child would cost in a public school. Alabama kids could go to a non-failing school for less money. This sounds like a win/win, especially considering that Alabama per pupil spending has gone down $1,318 since 2008, and doesn’t appear to be stopping its descent.

The money for Alabama’s school choice bill will come from the Failing Schools Income Tax Credit Account, which will be a part of the Education Trust Fund. This system is similar to Washington DC’s scholarship program in that the system will also provide tax credits to individual and corporate donations to the organizations that provide these educational opportunities. In other words, if a parent cannot afford the initial amount of tuition, a private or public company or a wealthy philanthropist can pay that family’s tuition and get a refund. It appears as if a corporation can only be reimbursed $25 million, but even that would send 7,142 kids to a non-failing school. Send a child to school, get your money back. Another win/win.

Let’s dig deeper into the type of student this program will serve.

First, they have to live in Alabama while receiving benefits, and they have to be zoned for a failing school (more on that in a second). Moreover, the child must be a member of a household whose total family income cannot exceed 150% of the median household income. That part of the bill does not qualify what area this median household income pertains to (local, state, federal, etc.), but if we went with the Census calculation of Alabama for 2007-2011, it would be $42,934. Alabama is below the national average by almost $10,000, and the local communities around failing schools have significantly lower household incomes than the state median. In short, this bill is geared toward the most needy areas of the state.

“Failing schools” are those schools that have been consistently low-performing as determined by the State BOE. That means any school that: 1) is listed in the lowest 10% of the state’s standardized achievement test, 2) has earned a grade of “F” or three consecutive grades of “D,” or 3) that is considered failing by the State Superintendent of Education (the guy who just pulled his support of the bill…).

What are the qualifying schools for the acceptance of transferring students? They are any public school outside the resident school district that is NOT considered failing, or a non-public school that has been accredited by one of six regional agencies. Some non-public schools that are not accredited by one of these six agencies are also qualified, but they must meet other strict criteria. Homeschooling and “storefront schools,” for instance, are not allowed under this program.

The language pertaining to the local non-failing public school option is critical. We here at American School Choice are not huge fans of legislation smacking of vouchers. Vouchers are messy, the word itself has garnered a lot of bad press, and things like DC’s scholarship program and Alabama’s new bill get thrown into the voucher pot despite some important benefits those programs offer (and money saved). Alabama’s bill affords the district with a failing school the opportunity to “market” another public school within the district to the student, who might otherwise leave. When you consider that some of the student’s neighborhood friends might attend that other local, non-failing public school, or that the local non-failing public school offers better sports programs than the private school option, that student will likely stay in the district. Of course, this will cost the state more money (it will pay 100% of ADM instead of 80%) and the district will have to pay for busing the kid further, but the district will not lose the ADM and the local public system will have the opportunity to redeem itself.

All in all, this bill is interesting because instead of diving straight into Lake Charter, Alabama appears to be slowly wading in with scholarship tax credits. That said, this legislation will not make many waves at the national level but it will certainly change the lives of more than a few Alabama students.

There are some glaring potholes in this road to school choice for Alabama. The first we could see was that the language from the original bill relating to the statewide accountability program was still in the new one, and it gave a lot of signoff power to the state superintendent when districts or schools sent up their innovation plans for approval. If the superintendent and the Democrats can create obstacles, or even delays, in this process, we cannot know for sure whether a district is failing under the new guidelines. Of course, this would be wholly unethical since it would trap students into bad schools until lawmakers settled their differences, but we’ve never understood the minds of anti-Choicers so who knows what will happen.

Another major problem we here at American School Choice see is the lack of transparency and accountability on the non-public side. The children might be getting better educations by leaving failing schools, but in the end we have no idea. For the sake of tracking comparable progress these non-public institutions need to be required to test the same way as the public schools and report their budgets, curriculum, enrollments, student demographics, etc. in the same way that public schools do. Any private school refusing to file the same basic, public information as public schools should not be allowed to absorb these tax credits.

There is a part of the bill that covers this, and things like testing, demographic reporting, and graduation rates will all be required from the non-public schools receiving these scholarship credits. However, the worst thing that could happen to this program would be a scandal involving a district losing track of money or student progress. Alabama needs to tread carefully here, because one false move could set school choice in the state back another decade.

Just as a closing point of interest, voucher language has been a common thread recently. Gov. Scott Walker in Wisconsin is devising a report card system for voucher schools so that only the best non-public schools get failing students. Colorado’s Court of Appeals just cited one of its county’s voucher system as totally legal, and anti-Choicers are sending it to the Supreme Court. Gov. Paul LePage of Maine, which just passed its first charter law in 2012, is trying to expand their voucher program, probably in an attempt to save money. Louisiana, which has spearheaded the voucher movement, is considering revising the language of their recent expansion, even though the current version is expected to pass without much ado. Finally, Indiana has seen so much success in moving students around with its voucher system that some proponents say they don’t just need money, they need more non-public schools.

Just remember that when we talk about “vouchers,” “scholarship tax credits,” or any other system in which non-public schools receive public money, there are important distinctions that anti-Choicers do not want you to understand. They want you to think that all your tax dollars are suddenly going toward a religious institution and teaching kids that evolution is bunk. The truth is that the best tax credit systems save a lot of money because many tuitions are less than the per pupil expenditure of a school district, and many accredited, regional, non-public academies are secular, not Christian/Muslim/Jewish/Etc.

Get the facts for yourself. Don’t believe the anti-Choicers. Heck, don’t even believe us. Figure it out for yourself. We know you’ll come down on the side of school choice every time because, in the end, this is about children. This is about our future. Stand up for your right to choose.

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