Florida shifting more public education money to private hands

Marchers rally support for scholarship program in Tallahassee on March 24

By Willian Gjebre,

Millions more in state money appears to be headed to private education in what local educators say is a cost to public schools through the Florida Tax Credit Scholarship Program.

The scholar program has redirected state education dollars to low-income families, who mostly use the voucher scholarship credits at private schools.

Broward public schools face the loss of 430 students and nearly $3 million; Miami-Dade about 1,500 students and $10 million. Federal Title I money would also be eroded to support the education of low income students.

Statewide, the program is expected to grow by 6,000 students. The state gives dollars to the public schools based on attendance.

The likely loss of funds and students comes at a time when both districts are under financial stress due to limited state funding caused by the downturn in the economy during the past four years; state funding is expected to be cut next school year. The expansion of the FTC program, therefore, adds to the financial difficulties of the two school districts.   

“There is a significant amount of money going away from public schools,” said Jane Turner, Broward County Public Schools Budget Director. She oversees a budget of $3.3 billion serving 232,000 students.

Miami-Dade has 347,000 students and a budget of $4.3 billion. The public school systems are among the largest in the nation.

Turner said the loss to Broward would be “huge.”

“This is a continuous thing that’s happening,” Turner said. “There is a significant amount of money going away from public schools.”

Miami-Dade officials were more cautious.

Richard Hinds, Miami-Dade County Public Schools Associate Superintendent/Chief Financial Officer, said he’s not certain that private schools in Miami-Dade have space for additional Florida Tax Credit scholarship students.

While about 25 percent of the 32,320 scholarship students statewide are in Miami-Dade, Hinds said it remains to be seen if that percentage continues when the program expands.

“I will not speculate,” he said. However, Hinds said the high number of Miami-Dade students on Florida Tax Credit scholarships “does drain public schools.”

The Florida Tax Credit

The program began in 2002 as the Florida Corporate Tax Credit Scholarship Program. It allows corporations doing business in Florida, or with Florida, to designate a portion of their Florida tax obligations to be earmarked for the program and to receive a dollar for dollar credit. In 2009, the “corporate” reference was dropped when other possible funding sources were added.

Last year, after about 5,000 students, parents and others rallied in Tallahassee in support of expanding the program, the state legislature raised the funding cap from $118 million to $140 million and allowed for automatic expansion if contributions increased. Last month, the Florida Department of Revenue announced that contributions in the current school year, 2010-2011, had exceeded 90 percent of the new $140 million cap and this would allow for a 25 percent increase in the Florida Tax Credit funding cap. This raised the total, in accordance with state law, to $175 million for the 2011-2012 school year.

The scholarship money is for students whose family household income level falls within the federal guidelines for the federal free and reduced lunch program. Eighty-four percent (84 percent) of the students receiving tax-credit scholarships attend religious/faith-based schools, according to state Department of Education data. The vast majority of the students (88.7 percent) attend grades K-8.

Although the program expansion worried public school officials, it was welcomed by the Tampa/Jacksonville non-profit scholarship funding group that raises, receives and distributes nearly 96 percent of the tax credit funds to schools accepting program students.

Jon East is the policy and public affairs director for Step Up for Students, which operates the scholarship program. He said that if next year’s funding threshold of $175 million is reached next year, it would allow approximately 6,000 additional students to apply for the scholarship funds.

More students, more dollars

The most recent Department of Education Florida School Choice Quarterly Report, November, 2010, says that 32,320 students in 1,073 schools in 60 counties use scholarships. Of that, 8,111 students, or 25.1 percent, were in 185 Miami-Dade schools and 2,325 students, or 7.2 percent, were in 86 Broward schools.

About 39,000 students would use scholarships next year if projections hold up. Miami-Dade Public Schools would have 1,506 fewer students – meaning the District would lose about $10.24 million in funding. Broward Public Schools, with about 432 fewer students, would lose about $2.94 million.

At present, state funding per pupil in public schools is approximately $6,800.

The Florida Tax Credit current enrollment is nearly three times that of five years ago. According to the Department of Education enrollment in the program in October, 2005, totaled 12,241 students, with 652, 5.3 percent, in Broward and 2,564, 20.9 percent, in Miami-Dade.

“We are experiencing growth,” East said

The program’s existence and expansion is based on corporations and other funding sources voluntarily earmarking some of their Florida tax obligations for the scholarships in lieu of the funds going to various other state coffers. Aside from state corporate taxes, other revenue sources now include insurance company premium taxes; severance taxes on oil and gas production; certain sales tax liabilities; and alcohol beverage taxes on beer, wine and spirits.

Under the law, Florida does not receive the funds; they are sent to the scholarship support organization.

In 2009, some of the corporate contributors to the fund, according to the Step Up for Students website, include ABC Liquors, Bankers Insurance Group; BJ’s Wholesale Club; Burger King; Marriott International; Lowe’s; Preferred Care Partners; Phillip Morris USA; Sysco Food Services (Central Florida, South Florida, Jacksonville, West Coast); Urban Outfitters; Walgreen; CVS; Verizon; AT&T; Waste Management.

East said he is confident that the $175 million level of contributions can be reached so that additional students can be served.

There are approximately 7,000 students on waiting lists for the tax credit scholarships, East said. He did not have information on how many of those were in Miami-Dade and Broward. And while he did not have information on the space availability in private schools in the two counties, East said he hasn’t heard there is a lack of space at Broward and Miami-Dade private schools.

East said students who accept a corporate scholarship receive an education at a much lower cost. At present, the yearly tax credit scholarship stipend is limited to $4,106 per student, or the cost of the private school tuition, whichever is less. The tax credit stipend is approximately $2,700 less than state funding per student.

The state law change that allowed the program’s expansion also allowed for an increase in the funding formula for the tax credit scholarships. Currently at 60 percent of annual state funding per pupil it will increase by 4 percent each year, beginning in 2011-2012, until it reaches the cap of 80 percent.

The corporate scholarship program, East said, hasn’t drawn much public notice because it “serves a narrow group of kids” — those at the lower economic level. However, East said it provides “an option that works for some kids.”

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Latest comments

  • It is good to see Bill Gjebre’s byline once again in print. I remember him from the Miami News and this is a good start to his work at Browardbulldog.

  • Welcome back, Bill! Don’t let Christensen work you too hard.

  • just another very clear statement that the public school system needs to change. In all honesty if the parents and students were truly happy in public schools this program would not have taken off like it did. Sorry about the loss but it was bound to happen.

  • There seems to be some missing information here.
    The Florida Tax Credit Scholarship Program didn’t allow a corporation in Florida to “designate a certain portion” of it’s tax bill. It allowed a corporation in Florida to DONATE 75% OF THE CORPORATE TAX OWED to a 501c3 that gives “scholarships” to students.
    The tax money going into the state coffers from Florida’s Corporate tax is reduced by 75%.
    The 75% NOT PAID TO THE STATE is now a tax deductible contribution to a 501c3.
    A clever corporate thief uses this to send his children to the private of his choice on the backs of Florida’s taxpayers, reduces his tax burden by 75% and gains a tax deduction for his corporation.
    If you are a taxpaying resident of Florida you are being ripped-off.
    If you are applauding this because tax money is paying for your kids private school then you are a thief as well.

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