Millions of tax dollars diverted to private schools

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In a video obtained by Channel 2, State Rep. David Casas tells private school parents that students who also enroll in a public school to benefit from a tax credit scholarship aren't scamming the system.

A Channel 2 investigation uncovered public tax money diverted so private school students could get a break on their tuition.

The tax credit scholarship program was intended to help Georgia students get out of struggling public schools, but Channel 2’s Kerry Kavanaugh found it doesn’t always work that way.
 
“We have a private school cheating scandal in Georgia, and it is widespread, and the state has done nothing about it,” said Steve Suitts of the Southern Education Foundation. 

The so-called scandal involves a state law that allows people to divert state tax money to private schools.  Under the law, Georgians would get a dollar-for-dollar tax credit by donating money to help private schools. Then, that money was supposed to help disadvantaged students who attend those schools. 
 
Critics told Kavanaugh the law has cheated Georgia students who want to leave public schools.
 
Before it was law, state Rep. David Casas said his tax credit scholarship program would help “students transfer from public schools to private schools” and “help parents who can’t afford private education.”
 
But the law itself had no wording about helping impoverished children.  The law also said students must be enrolled in a public school but didn’t explicitly say they had to attend class, allowing private school students to also enroll in public schools to collect the credit benefit.
 
In a 2011 video, Casas told private school parents the wording of the law was intentional. 

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One parent asked, “But aren’t people going to say, well, that’s a scam, you’re enrolled in the same place, you’ve been going there for nine years, and now you’re just enrolled in a public school, and you’re enrolled in two schools?” 

Casas replied, “That is not a loophole that you are scamming the system. Two governors have signed it with that language in place and knowing right well what they’re doing.”

Because of the law, non-profit scholarship organizations popped up across the state to take advantage.  Those organizations funnel tens of millions of diverted tax dollars to private schools.
 
Bob Jaison, the head of the Georgia Student Scholarship Organization, told Kavanaugh he followed the law to the letter.

“We clearly tell the schools and the parents they cannot choose a particular student to receive the benefit of their donation. That’s against the law,” said Jaison.
 
But Jaison seemed to suggest ways around that when speaking to parents at Gwinnett Christian Academy in 2011.  In a recording of that meeting obtained by Channel 2, a parent asked, “When you mentioned about having family members or people that you know donate, so when they make that donation, does it get earmarked to that child?”
 
Jaison replied, “It goes to the general fund, but the school knows the names of the donors. And as a parent, if you go out there and tell 10 of your friends to make a donation, I know you’re going to go there and tell [school official] Wyatt [Bozeman], ‘I got all those people to donate.’”

Bozeman later added, “A very small percentage of that money will be set aside for a needs-based scholarship. The rest of that money will be channeled to the family that raised it. Bob told us that is very common for the other schools to set aside a small portion for a needs-based fund.”
 
Jaison said, “The way I look at it, if tuition is roughly $4,500 per year at this school, every child gets their parents to donate at $2,500, and their neighbors or a grandparent, and then their tuition is paid for through the scholarship.”
 
Jaison initially denied attending the meeting at Gwinnett Christian Academy, but when Channel 2 showed him a screen shot from the school’s website, Jaison said he was mistaken and confirmed his attendance.

Bozeman, the school’s headmaster, declined Kavanaugh’s request for an interview, but pointed out Gwinnett Christian stopped doing business with the Georgia Student Scholarship Organization.
 
The Southern Education Foundation said it supports the idea of such scholarships but said the current law and its loopholes are cheating students.

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That’s frustrating for people who run a different student scholarship organization. Derek Monjure, executive director of the Arete Scholars Fund, said his group has a different business model from the Georgia Student Scholarship Organization. Money is not funneled to schools, but directly to students in need.

“Folks apply to us for a scholarship, and if they meet the scholarship guidelines, federal free and reduced lunch, then we award them the scholarship,” Monjure said. 
 
Arete has helped students such as Joseph Lloyd, who left public school to attend Bright Futures Academy in northwest Atlanta.

“I’d just go to school because they made me, but I actually have people now that influence me to want to become something in life,” Lloyd said.  
 
Monjure told Kavanaugh he was unhappy with the way the law has been implemented, saying, “It’s unfortunate. We’re not happy about the way that’s happened. We do think there needs to be more accountability in the legislation.”
 
But Kavanaugh’s investigation found accountability was elusive because of roadblocks in the law.

Channel 2 filed an open records request with the Georgia Department of Revenue for audits and other records from the Georgia Student Scholarship Organization, but the department denied the request and said it would be illegal to release the information.
 
State Rep. Earl Ehrhart, a co-sponsor of the scholarship bill, maintained critics could not prove that the money was misused.  

When Kavanaugh asked him if it was possible to identify how many students have benefited from the law and if they are in fact in need, Ehrhart replied, “No, and why should we have to worry about the basic minutia with that respect when what we’re trying to do is benefit these children?”

The chairman of the Senate Education Committee told Channel 2 he is in talks with other legislators about how to make the process more transparent.


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