Equity & Diversity Opinion

Georgia Religious Schools Skirt Constitution to Access Taxpayer Funds

By Anthony Cody — March 02, 2013 3 min read
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The constitution of the state of Georgia is clear.

“No money shall ever be taken from the public treasury, directly, or indirectly, in aid of any church, sect, cult, or religious denomination or of any sectarian institution.”

In 2008, state legislators passed the Qualified Income Tax Credit, which allowed married couples to make deduct from their state taxes contributions up to $2500 to go into bank accounts managed by what are called “Student Scholarship Organizations” (SSOs). These SSOs then distribute these funds to private and parochial schools, many of which openly discriminate against gays and lesbians.

This is now costing the taxpayers of Georgia $50 million, and there are proposals in the legislature that could divert an additional $30 million, at a time when Georgia’s schools are already suffering from budget cuts. It appears that about 70% of these funds are now going to explicitly religious schools.

The defenders of this practice suggest that since the taxes were never collected in the first place, these are not government funds. However, when a taxpayer receives a dollar for dollar deduction for their contribution, and thus diverts tax dollars, this might as well be public funds in terms of the effect it has on the state budget. And these dollars can go towards the children designated by the donor, so you can in effect, use this as a voucher to pay for your child’s private school tuition.

Supporters of this legislation include Rep. Earl Ehrhart, who also happens to be the Chief Executive Officer of Faith First Georgia, an SSO that receives these funds. Their web page states:

Faith First Georgia was formed for the express purpose of helping to transform the availability of Christian education for parents in Georgia. Faith First Georgia is committed to supporting schools that maintain a Christ-centered focus in their efforts to educate the next generation of Georgians.

If you want to understand where this money is going, you will have a hard time. You will discover that this law received the Society for Professional Journalist’s Black Hole Award last year for the way it hides the disbursal of funds.

The SPJ reports:

A 2008 Georgia law introducing the Qualified Education Income Tax Credit enabled taxpayers to divert over $125 million so far from the state treasury. The law allows for tax credits to support scholarships at private schools without tracking which schools or students get funding or disclosing publicly anything about how the state money is spent by private organizations. Now, after the amendments in 2011*, the law makes it a criminal offense to disclose virtually any meaningful information about the program to the public. Georgia's law fails to hold anyone accountable for how they divert or spend tax funds. It does not track who is receiving scholarships under the program.

Ironically, Earl Ehrhart claimed, on the floor of the legislature, that these amendments were promoting “transparencies.”

A report in the New York Times reveals that some of the schools openly discriminate against lesbians and gays.

One of the schools mentioned is the Shiloh Hills Christian School. Their parent and student handbook explains:

Definition of "identifying statement":

A statement that a student is a homosexual, bisexual, or otherwise immoral, or words to that effect or language or behavior that a reasonable person would believe is intended to convey the statement that a student engages in or has a propensity or intent to engage in immoral and/or homosexual acts.
Examples: "I am gay," "I am a homosexual," "I have a homosexual orientation."
Homosexual conduct, defined as acts or identifying statements, is incompatible with enrollment at Shiloh Hills Christian School and is a basis for dismissal. (p. 53)

According to this report from the Southern Education Foundation, at least 115 religious schools in Georgia have similar anti-gay policies.

This program was sold as a means of helping needy children escape “failing” public schools. It was also suggested that as children left the public school rolls, this would create savings for the state, which would no longer need to educate them. But those magical market forces are at work, finding ways to shift those funds around these intentions. The report from the Southern Education Foundation has revealed systematic fraud that is allowing individuals to use these deductions as vouchers for their own children, regardless of their income level.

The law that set up this system explicitly states:

A contribution directly or indirectly designated for a particular individual, whether such individual is a dependent of the taxpayer or not, is considered made to the individual and not to the SSO and as such is not eligible for the qualified education expense credit.

The Southern Education Foundation uncovered a pattern of activities by which parents were able to receive credit for their children’s private school tuition based on their own pre-tax contribution, and even if they recruited others to make these contributions. Some schools even held fundraising drives which awarded students discounts or rebates on their tuition if they secured donations.

Their report states:

All of these methods and schemes involve SSOs and private schools encouraging and assisting taxpayers, especially private school parents and their friends, to provide tax credit contributions and, in effect, to return all or part of a tax credit contribution to help pay designated children's private school tuition. These practices do not appear to be one-off events. The documents that SEF has assembled in the appendix of this report show that questionable, illegal practices and procedures have been maintained over a period of four years, and most, if not all, continue today.

One of the beneficiaries of the program described it this way to a newspaper in 2009.

John (sic) Newcomer, a member of the Horizon Christian Academy board in Cumming, called the scholarship program "a way for us to get some of the tax dollars that are taken from us."
The school's May newsletter promoted it as "a way for you to have state funds pay your child's tuition."
The state kind of implemented a voucher system in disguise," Newcomer said."

To be clear, what is happening here is that individual taxpayers can direct the funds that are being diverted from the state tax coffers towards their own children’s tuition, or that of their friends.
Vouchers have proven to be highly unpopular with voters, as they divert scarce funds from public schools and unconstitutionally allow them to pay for religious instruction. This violates the state constitution’s prohibition against tax moneys being spent “directly, or indirectly” on religious organizations. This law is an end run around the Constitutions of the State of Georgia, and the United States, and if Earl Ehrhart has his way, this week the state will toss another $30 million into the pot.

What do you think? Does this diversion of public funds violate the Constitution?

Continue the dialogue with me on Twitter at @AnthonyCody

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