WELCOME READERS OF DIANE RAVITCH’S BLOG! Please note that the bill to expand Florida’s voucher system was pulled yesterday.
It’s now called the Florida Sales Tax Credit Program, a teeny-weeny little change in what was simply the Florida Tax Credit Scholarship. Sponsored by Sen. Bill Galvano (R-Bardenton), SB 1620 is summarized this way:
Tax Credit Scholarship Programs; Creating a credit against the sales and use tax for contributions to an eligible nonprofit scholarship-funding organization; revising the disqualifying offenses for scholarship-funding organization owners and operators; establishing the Florida Sales Tax Credit Scholarship Program (FTCS); providing parent, student, scholarship-funding organization, Department of Education, school district, and Commissioner of Education responsibilities, obligations, and powers with respect to the scholarship program, etc.
Republicans and folks from the Chamber of Commerce and Bush Foundations bristle when FTCS is referred to as a voucher program. Too bad. It’s what is. The expansion to include what was once funded by simple tax liability to include sales tax ought to be giving pause to legislators on both sides of aisle. So far, not at all from the GOP side. But that discussion is for another time. This post will shine the light on “Scholarship Funding Organizations” or SFOs of which who receive the direct “tax credits or sales tax” from individuals, businesses and corporations.
Up until this past year, the only SFO operating in the state was John Kirtley’s Step Up for Students (SUFS) and it served as the sole administrator of the Florida School Choice Fund. According to its latest audit, SUFS took in over $271 million in “pledges receivable” in 2013, an increase of almost $80 million from the year before. SUFS is allowed a 3 percent operating allowance by law any by any measurement is operating within that. But lets take a closer look.
Among other expenses, the audit lists the following “Salaries and Wages,” totaling $4,389,223 in the following categories:
Florida Tax Credit Scholarship Program: $2,106,819
School Development of Learning: $259,186
Communication, Policy and Public Affairs: $633,582
General & Administrative Support Services: $619,090
Development & Fundraising Support Services: $638,170
According to SUFS own audit, only 47 percent of the salaries it pays out goes to support the tax credit scholarship fund. Of the other 53 percent, the Communication, Policy and Public Affairs division is described as follows in the audit:
This program takes the message of school choice to constituency groups, community and political leaders, and state, local and national news publications. It publishes a newsletter with a circulation of approximately 37,000, four times a year, creates monthly student spotlights, issues press releases on topics of concern and writes commentary for various publications. The group also analyzes demographic, participation data and trends in the program and the school choice movement.
SUFS characterizes Advocacy and Outreach similarly as “promoting and defending educational choices” while helping train “choice advocates on how to defend and advance school choice.”
It is these two designations of “Wages and Salaries” which deserve oversight from legislators and scrutiny from taxpayers. The total salaries constitute almost 18 percent of SUFS total wages and salaries. Their audit also includes expenses within the two for contract services, professional fees, advertising and recruiting. SUFS admission that its mission goes beyond administrating the FTCS and into advocating for the broad “school choice” movement leaves the clear impression that they are using what would be Florida tax revenues to advocate for things outside their scope. For example, four SUFS executives write frequently in support of the for-profit charter school industry, common core standards and voucher legislation in other states in their website.
SUFS is no longer the sole SFO in Florida. One focuses on a family’s effort to provide scholarships for kids who play hockey and another is a start-up from the Spring Hill, Florida Rotary Club. The third, AAA Scholarship Foundation curiously doesn’t link any to any organizational personal on its site. It operates in four other states and is run by two former executives of SUFS, Kimberly Dyson and Kerri Vaughn. In one of those states, Alabama, a columnist was critical of the state’s new tax credit scholarship program and he drew a sharp rebuke from SUFS CEO Doug Tuthill. Perhaps we now know why. Another SUFS franchise was drawing fire and the brand needed protecting.
Apparently SUFS and AAA can share sales tax revenue, too. From SB 1620:
l)(k) With the prior approval of the Department of Education, (SFOs) may transfer funds to another eligible nonprofit scholarship-funding organization if additional funds are required to meet scholarship demand at the receiving nonprofit scholarship-funding organization. A transfer is shall be limited to the greater of $500,000 or 20 percent of the total contributions received by the nonprofit scholarship-funding organization making the transfer. All transferred funds must be deposited by the receiving nonprofit scholarship-funding organization into its scholarship accounts. All transferred amounts received by any nonprofit scholarship-funding organization must be separately disclosed in the annual financial and compliance audit require in this section
It’s unclear how much financing comes in to SUFS from separate donations and who is actually donated the money. It’s likely that SUFS is operating within the letter of the law. But with the estimated cost of voucher expansion to Florida taxpayers over the next five years to be almost $1 billion a full accounting is warranted. And everyone needs to know what they are actually paying for.