Georgia’s Senate appears poised to act on an expansion of the state’s tax credit scholarship for private schools. This is despite a lack of reliable evidence on the existing program’s effectiveness or any proper safeguards to ensure it’s a good deal for taxpayers. House Bill 217 was introduced in 2017 and almost made it to the finish line last year, falling just short of passage on the final day of legislative session. It can still be passed this year if the house and senate reconcile differences on the bill. The best course of action is to leave the program untouched at its current cap of $58 million a year. If lawmakers move the legislation forward then the program needs to at least meet the minimum standards for sound, responsible policy.
Both chambers last year agreed in principle to increase the annual cap on the total tax credit above the $58 million existing limit. The house proposed a new $100 million cap and the Senate countered with $65 million. Last week, House leaders revived the bill and sent it to the other chamber with supposed proposal of an $85 million cap.
Expanding Georgia’s private school tax break at all is unwise, due to the program’s lack of the barest standards for transparency and accountability. GBPI spotlighted the program’s lack of transparency last year and disputed the questionable claim of an out-of-state pro-voucher group that the tax credits save the state money. The lack of transparency persists. Current law does not require even basic information about the program to be collected and shared, including:
- Names of private schools that participate
- Resident school districts of participating students
- Grade level of students at entry into the program and category, such as. special education, gifted
- Percentage of students entering the program under each admission category
- Percentage of low-income students as identified by their participation in the federal free- or reduced- price lunch program
- Percentage of students by race and ethnicity
- Length of time students are in the program, disaggregated by race and income
- Student performance reported by school, income level, race and length of time in program
- Student performance compared to performance in public schools
Without this information, it is not possible to accurately assess whether the tax credit helps or harms student learning, if the state gets a good return on investment, or even to know which groups of students participate in the program.
This lack of data stands in stark contrast to the extensive information gathered and disseminated about every public school and school district in Georgia. Students participate in the Georgia Milestones assessments in third through eighth grades and at the end of their high school courses. Each year, schools and districts are rated based on students’ scores on these assessments under the state’s accountability system, overseen by the Georgia Department of Education. The Governor’s Office of Student Achievement also grades each school and district annually and publishes a wide array of additional data on students, schools and districts.
This information helps parents, educators, community members, legislators and other stakeholders understand whether students are developing the knowledge and skills they need to succeed in postsecondary programs and the workforce. The same information is not available to assess students participating in the tax credit scholarship program but it should be. Voucher programs in other states do not have a good track record when it comes to student learning.
Proponents of the tax credit program contend the speed with which tax credits are claimed is proof of the program’s success. This shows that tax credits are popular, not that participating students are learning more.
If lawmakers move forward with this bill despite the shortcomings, one sensible option is to add an expiration date, or sunset, to the program. A sunset ensures lawmakers are required to revisit the debate in a more in-depth way within a few years. Special tax breaks often remain buried in state law for years or even decades without proper review, unlike budget expenditures that legislators put under the microscope each year. Adding a sunset provision would reflect best practices from other states and embrace the spirit of the senate’s own initiative from last summer focused on ways to ensure the state’s return on investment from tax breaks.
The Georgia Senate Study Committee on Special Tax Exemption outlined a series of recommendations that include the rigorous examination of the costs and benefits of each tax incentive every five years, including the tax credit scholarship program. This kind of rigorous review can help lawmakers make informed decisions about the best use of the state’s resources instead of relying on guesswork and finding out too late they rushed into a mistake. Georgia’s decade-old tax credit scholarship program, or neovoucher program, has yet to be evaluated.
Conducting rigorous evaluations of tax incentives is good fiscal practice. The study committee proposed evaluating the tax credit private school scholarship program in 2019. Its good advice still holds. Instead of approving an increase under HB 217, lawmakers should pump the brakes until state experts can take a deep and fair look after 10 years in whether it really works. At a bare minimum, lawmakers can include an expiration date on an expanded program and set the tax break on a course for review sooner than later.
