Tax Credit Scholarship bill signed into law in bipartisan ceremony at the Capitol

FOR IMMEDIATE RELEASE: Thursday, April 22, 2010

TALLAHASSEE — A bill that expands a scholarship program for low-income schoolchildren was signed into law today in a ceremony that brought together Republicans, Democrats and a civil rights icon.

The bill, SB 2126, passed the House April 8 by a 95-23 margin that included 20 of the 43 Democrats present. It passed the Senate March 24 on a 27-11 vote that included four Democrats. A majority of the Black Caucus and nearly the entire Hispanic Caucus voted in support.

“The Florida Tax Credit Scholarship Program offers families an invaluable opportunity to choose a learning environment that gives their children the best chance for success,” Gov. Charlie Crist said. “I am confident Florida will continue to provide more educational opportunities and options with the partnership of the business community through great programs like this.”

Gov. Crist has repeatedly praised the bipartisan support of the Florida Tax Credit Scholarship, which currently serves 27,700 low-income students at 1,017 private schools. During a March 24 rally in front of the Capitol where 5,500 parents, students and educators urged passage of SB 2126, Crist told the crowd, “There’s no partisan politics about kids. As long as we put the children first, we cannot get it wrong.”

The bipartisan support was evident at today’s signing ceremony. Among the guests were Democrats Al Lawson and Gary Siplin of the Senate and Mack Bernard of the House, who were joined by Republican bill sponsors Rep. Will Weatherford and Sen. Joe Negron.

“I have witnessed the leadership in these schools and they are helping these kids become the next generation,” said Lawson, the Senate Democratic leader, during the ceremony.

The event also featured the presence of a civil rights icon in Florida. H.K. Matthews, who has fought to strengthen the Florida Tax Credit Scholarship for the choices it provides to poor families, said that Crist has contributed to what Matthews believes is a natural extension of the civil rights movement.

“I have devoted my life to the cause of social justice, and this scholarship promises equal educational opportunities to our most at-risk students, regardless of the financial circumstances they come from,” Matthews said. “It is heartening to see my Democratic friends and my friends in the Black Caucus embrace that as well. We all have risen above the partisan divide, and our children will benefit.”

The bill takes two new steps with accountability: requiring individual schools to disclose standardized test score gains if they have at least 30 tested scholarship students, and requiring individual schools to file a financial report by a certified public accountant if they receive at least $250,000 in scholarship revenue. It indexes the maximum scholarship to 80 percent of the base legislative formula for each public school student — or roughly half the total cost per public school student. (The increase would be phased in over at least six years.) And it increases the cap on tax credits from $118-million to $140-million next year, allowing it to increase by 25 percent in any future year in which 90 percent of the cap is reached.

The eight-year-old scholarship program provides educational options for students from households whose income meets federal guidelines for free and reduced-price lunch. Currently, companies receive a dollar-for-dollar tax credit on their corporate income 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. The legislation signed into law today adds three new tax sources: alcoholic beverage excise tax; direct pay self-accrual sales tax and the oil and gas severance tax.



Academic transparency: Publicly disclose the test gains of any school with at least 30 tax-credit students 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 economically disadvantaged children under the federal No Child Left Behind Act.

Financial accountability: Require a financial report from a certified accountant each year for any school with at least $250,000 in scholarship funds the previous year. 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 state FEFP (Florida Education Finance Program) formula per-student — or roughly half the total cost of a public school student. The change would be made incrementally over at least six years, from 60 to 64 to 68 to 72 to 76 to 80 percent.

Regulatory compliance: Empower the education commissioner to remove or deny from the Tax Credit program any school operator that has a previous history of operating schools in a manner contrary to public health, welfare or safety.

Program cap: Increase the cap on tax-credit contributions from $118-million to $140-million next year and allow it to grow by 25 percent after 90 percent of the cap is reached in future years. The scholarship would remain as the only major state education option with a cap.

Tax Credit Base: Add three new sources to the base of dollar-for-dollar state tax credits: alcoholic beverage excise tax; direct pay self-accrual sales tax, and the oil and gas severance tax.

Scholarship renewals: Reduce the scholarship as household income increases. Students receive a full 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 requirement to enter the program would remain at no more than 185 percent.