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Eight other states have similar programs as the one proposed in House Bill 1104, all of them controversial and based on a model designed to circumvent the constitutional prohibition against public funding for religious education.

GOP plan would send public funds to private schools 

Students from Napoleon B. Smith Seventh Day Adventist Academy perform "I Have a Dream" near the education building—"The Pink Palace."

Photo by Bob Geary

Students from Napoleon B. Smith Seventh Day Adventist Academy perform "I Have a Dream" near the education building—"The Pink Palace."

A year ago, when the Republican-led General Assembly enacted a small tax-credit subsidy for special-needs kids whose parents transfer them from public to private schools, critics warned that it was just a foot in the door. Soon, they said, the GOP would try to divert a lot more public money from traditional K–12 schools to Christian and other nonpublic schools.

The critics were correct.

House Bill 1104, sponsored by Majority Leader Paul Stam, R-Wake, would permit the shift in 2013 of up to $40 million in state support from the public school system to private schools—and much more than that in subsequent years.

The shift would occur as the result of an indirect voucher scheme. Corporations doing business in the state and owing income or excise taxes would be allowed to instead pay for private-school scholarships of up to $4,000 per student. The scholarship money would be collected by nonprofit "scholarship-granting organizations" certified by the state; contributing corporations would be given tax credits from the state equal to the amount of their donations.

Eight other states have similar programs, all of them controversial and based on a model drafted by the American Legislative Exchange Council (ALEC), a right-wing group funded by the billionaire Koch Brothers, among others. ALEC's model was designed to circumvent the constitutional prohibition against public funding for religious education. Last year, the U.S. Supreme Court voted 5-4 to uphold the Arizona version of ALEC's legislation.

In March, a bipartisan group of 11 legislators, including six Republicans led by House Speaker Thom Tillis and five Democrats, traveled to Florida for two days to hear about that state's tax-credit scholarship program. The legislators' expenses, totaling a reported $8,300, were paid by a nonprofit advocacy group, Parents for Educational Freedom in North Carolina (PEFNC). That group has ties to national conservative funding sources, mainly the Walton (Walmart) Family Foundation.

The traveling legislators included state Rep. Marilyn Avila, R-Wake, although Stam did not attend. The lawmakers were hosted by, among others, former Florida Gov. Jeb Bush, who now chairs a Florida group also funded with Walmart money.

PEFNC, according to federal tax filings and the Walton foundation's website, receives the bulk of its money from the foundation, including grants of $275,000 in 2010, $525,000 in 2011 and $625,000 in 2012.

Walton, according to its website, funds similar "school choice" efforts throughout the country and is a major source of funds ($1.7 million in 2010; $1.5 million in 2011) for the Foundation for Excellence in Education, the Florida-based group headed by Bush, the ex-president's brother.

A watchdog outfit in Raleigh, N.C. Policy Watch, uncovered the details of the trip and has charged that it may have violated state lobbying laws, which bar lobbyists from paying for legislators' goodies. N.C. Policy Watch is an arm of the progressive N.C. Justice Center.

PEFNC maintains that the trip fell under an exception to the lobbying laws that allows trips for informational purposes if they're unrelated to specific legislation and not designed to influence a legislators' view—a position undermined by the introduction of HB 1104 just two months later.

HB 1104 doesn't limit what any single corporation could contribute for scholarships in North Carolina, except that the amount couldn't exceed its state tax bill. The measure restricts how much the state could pay out in tax credits: up to $2 million in 2012; up to $40 million in 2013; and up to 35 percent more each year after that if donations are rising accordingly.

Scholarships could be granted only to children whose parents' income is 225 percent of the federal poverty line or less—which is about $50,000 a year for a family of four, according to Stam—and only to children enrolled full-time in a public school the prior semester or who are already on a scholarship at a private school.

Thus, while not exactly a voucher plan, the state would be handing over millions of dollars in tax revenue to private schools that enroll eligible children.

Because these children would previously have been in a public school, however, Stam contends that taxpayers would save money on every scholarship—the difference between private-school aid of up to $4,000 per student and the approximately $8,000 paid per student in a traditional K–12 school.

The voucher-like scheme would be on top of deep Republican cuts already made to pre-K and K–12 funding in North Carolina.

Add the law enacted last year to permit an unlimited number of charter schools and you have the Republicans' three-step privatization plan:

  • Cut state spending overall;

  • Shift some of the remaining money to charter schools, where parents may supplement public aid;

  • Shift more of the remaining money to private schools, where parents will supplement what the public contributes.

Actually, it's a four-step plan. Republicans and their allies argue that as a result of the new competition, traditional public schools will be forced to improve even though their per-pupil budgets are reduced and they're left with high numbers of students from very low-income families—the ones whose parents aren't looking for charter or private school options.

At an outdoor rally a week ago sponsored by PEFNC, Stam gestured to the building that houses the state Department of Public Instruction. "The Pink Palace," Stam termed it acidly. "The headquarters of the education bureaucracy."

The people inside, Stam continued, aren't "the enemies of children," but the traditional schools fail too many kids, which is why he's for school choice.

PEFNC President Darrell Allison was nodding. Allison, who is African-American, points often to the fact that just half of black male students in North Carolina graduate from high school, and 60 percent of the state's prison population is black.

For the rally, he brought nearly 1,000 school kids and adults to Raleigh from private, mainly Christian schools around the state. At least half were black, including all of the kids from Napoleon B. Smith Adventist Academy in Greensboro who performed a high-energy recitation of Dr. Martin Luther King's complete "I Have a Dream" speech.

"This program," Allison said of HB 1104, "is not for the middle-class or the rich. It's for low-income children. We're talking about children in the system where the system isn't working for them. It's a win-win. It's a win for the child, and their families, because they can be productive citizens. It's a win for the state because of the savings."

Then Allison marched his group to the General Assembly to lobby for the bill.

Left hanging was the question of whether the children who'd "win" would be the ones who would've graduated anyway? And what happens to the public schools they leave behind?

That same day, The New York Times reported that the tax-credit programs in other states are widely abused, including such scams as earmarked donations for the donors' children, for star athletes, for Christian proselytizing and so on.

Stam's bill appears to be designed to head off some of the worst abuses. But it doesn't follow one good practice adopted in Florida. There, a single statewide organization is empowered to accept donations and make scholarship awards, and it is barred from profiting. Stam's bill would allow many so-called granting organizations to spring up, and they'd be allowed to keep 9 percent of donated funds after their first two years in operation.

And the measure doesn't require monitoring the effectiveness of the program in raising student performance.

The chairman of the state Board of Education, Bill Harrison, issued a statement denouncing Stam's bill as "the latest effort to dismantle public education."

The money, Harrison said, would be given to schools "not held accountable to the taxpayers or for student performance."

Nonetheless, Stam predicted confidently that both legislative chambers would swiftly pass his bill.

This article appeared in print with the headline "The voucher scheme."

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