Rep. Will Weatherford calls for accountability, equity in Florida Tax Credit Scholarship

FOR IMMEDIATE RELEASE: Wednesday, February 10, 2009

TALLAHASSEE, Fla. — Under legislation filed today, House Education Policy Chairman Will Weatherford called for greater accountability for Florida Tax Credit Scholarships while asking to reduce the financial burden on the low-income families the program serves.

The bill, HB1009, would take two new steps with accountability: 1) Require individual schools to disclose standardized test score gains if they have at least 30 scholarship students, and 2) Require individual schools to file a financial report if they receive at least $250,000 in scholarship revenue.

Additionally, the bill would index the maximum scholarship, now set in law at $3,950, to four-fifths of the base legislative formula for each public school student — or roughly half the total cost per public school student. The scholarship is currently the lowest-cost education option in the state and has lost ground to per-student funding. The growing gap between the scholarship and the average tuition and fees has pushed low-income families off the scholarship. Last year, families with an average income that was 20 percent above poverty paid roughly $1,000 out of pocket to make up the difference.

“Florida has an array of educational options that other states envy, but we must strengthen the one we have for our poorest families,” Weatherford said. “As we energize these efforts, we must also invite more transparency into how our schools and our students are benefitting, and these measures would make this tax-credit scholarship the most accountable one in the nation.”

The eight-year-old program, which now serves 27,710 K-12 students in 1,071 private schools, provides educational options for students from households whose income meets federal guidelines for free and reduced-price lunch. Companies receive a dollar-for-dollar tax credit on their corporate in-come or insurance premium tax liability for money they contribute to state-approved nonprofit scholarship funding organizations. Those organizations, in turn, must spend at least 97 percent of that money directly on scholarships.

Rep. Weatherford’s bill has already drawn the attention of Gov. Charlie Crist, who has named it one of his top legislative priorities. It also has received the support of state Education Commissioner Eric Smith.

What’s in the bill:

Academic transparency: Publicly disclose the test gains of any school with at least 30 tax-credit stu-dents whose norm -referenced scores are currently counted under law (grades 3-10 with a prior-year score). Thirty also is the threshold for public school grades and for counting the scores of economi-cally disadvantaged children under the federal No Child Left Behind Act. This would take the current law down to the school level.

Financial accountability: Require a financial report from a certified accountant each year for anyschool with at least $250,000 in scholarship funds the previous year. The report is required to provide information on basic accounting practices and track the use of scholarship money, and misuse of money would be reported to the state Department of Education. The $250,000 threshold is half the level at which the state requires audits for nonprofits receiving state aid.

Scholarship amount: Set the maximum Tax Credit Scholarship, now $3,950, at four- fifths of the stateFEFP (Florida Education Finance Program) formula per-student — or roughly half the total cost of a public school student. The scholarship is currently the lowest- cost education option in the state and has lost ground to per -student funding. The change would be made incrementally over four years, from 65 to 70 to 75 to 80 percent. The average tuition and fees for Tax Credit participating schools this year is $6,335.

Regulatory compliance: Empower the education commissioner to remove or deny from the TaxCredit program any school operator that has a previous history of operating schools in a manner con-trary to public health, welfare or safety. This is intended to protect against any owner who would at-tempt to reconstitute a new school after being suspended or revoked by the state.

Program cap: Allow the annual cap on tax -credit contributions to grow by 25 percent after 90 percentof the cap is reached in the prior year. The change would help the program, like McKay Scholarships and charter schools, grow or shrink according to student demand.

Tax Credit Base: Add three new sources to the base of dollar-for-dollar state tax credits: alcoholicbeverage excise tax; direct pay sales and use tax, and the oil and gas severance tax. These would allow more companies to participate in the program, but would not increase or decrease the overall cap of the program. The total amount of potential tax credits is determined by the program cap.

Scholarship renewals: Reduce the scholarship as household income increases. Students receive afull scholarship as long as income is no more than 200 percent of the federal poverty level, up to a 75 percent scholarship if income rises above 200 but less than 215 percent, get 50 percent if income is between 215 and 230 percent, and lose eligibility if income exceeds 230 percent. The income require-ment to enter the program would remain at no more than 185 percent.