Governor signs school tax-credit act: First change to new law already filed in Senate
by Tim Lockette
tlockette@annistonstar.com
Mar 14, 2013 | 8507 views |  0 comments | 8 8 recommendations | email to a friend | print
Gov. Robert Bentley talks to the media after signing the Alabama Accountability Act of 2013 Thursday, March 14, 2013, at the Capitol in Montgomery. Photo: AL.com, Julie Bennett/Associated Press
Gov. Robert Bentley talks to the media after signing the Alabama Accountability Act of 2013 Thursday, March 14, 2013, at the Capitol in Montgomery. Photo: AL.com, Julie Bennett/Associated Press
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MONTGOMERY — The Alabama Accountability Act, a much-debated bill that would grant tax credits to some parents to enroll their children in private schools, is now law.

Speaking to reporters in the Capitol on Thursday, Gov. Robert Bentley announced that he'd signed the bill that morning.

"This will change the schools in this state," Bentley said. "There is no excuse any more for our schools to fail."

The signing comes after the Alabama Supreme Court Wednesday rejected a lawsuit by the Alabama Education Association to block the Legislature rom sending the bill to Bentley to be signed.

The bill, also known as HB84, began life as a school-flexibility measure, designed to allow schools to opt out of certain state regulations in the pursuit of educational goals.

In the last few hours before the bill's final passage, Republican leaders in the Senate changed the bill, more than doubling its length and adding provisions that would allow parents of students in "failing" school districts to claim a tax credit of up to $7,500 to move their children to private schools or other, non-failing public schools. While $7,500 is the upper limit, under the act's funding formula, tax credits would likely be no more than $3,500 to $4,000 per year.

The 11th-hour change sparked a lawsuit by the AEA, which argued that the changes to the bill violated the Legislature's rules and the state's Open Meetings Act. A circuit court judge initially blocked the signing of the bill, but the Alabama Supreme Court vacated his decision late Wednesday.

Bentley, in announcing the signing, focused mostly on the school-flexibility aspects of the bill. He said the act will free school leaders to do what needs to be done to improve education.

"I don't want people to lose sight, with all the clutter that's going on, of the fact that we're giving schools something they've never had before," he said.

Many of the state's education policy leaders — including state schools Superintendent Tommy Bice, the Association of Alabama School Boards and the School Superintendents of Alabama — supported the original flexibility bill.

After the tax-credit wording was added, those organizations asked Bentley to send the bill back to the Legislature for re-working. Among other things, school leaders asked for a clearer definition of "failing" schools and more clarity on who would get the tax credit.

The bill was passed without a fiscal note, a statement of economic impact that normally accompanies legislation. Education advocacy groups have estimated the cost of the tax credit at anywhere between $35 million and $367 million. That money would come from the Education Trust Fund, which is funded by sales and income taxes.

10-percent problem

Bentley told reporters he believed the bill would not adversely affect the Education Trust Fund.

"Our goal is to make every school in this state a non-failing school," he said. "If that happens, there will be no tax credits."

The bill offers four definitions of a failing school, one of which would include the schools in the bottom 10 percent in academic performance. That would place roughly 135 to 150 schools in failing status every year, depending on how many of the state’s 1,499 schools are exempted from testing.

Republican leaders said that despite the 10 percent rule, they believed the number of failing schools would dwindle to zero.

"It is not our intent to have 10 percent of our schools at failing status,” said Sen. Del Marsh, R-Anniston. Marsh, the president pro tempore of the Senate, held a joint press conference with House Speaker Mike Hubbard, R-Auburn, celebrating the bill’s signing Thursday.

Marsh and Bentley both said that remaining questions about the bill’s wording could be hammered out through rules and regulations promulgated by the state Department of Education and the Department of Revenue.

Malissa Valdes-Hubert, spokeswoman for the Alabama Department of Education, said the department was just beginning to work on those rules, now that the bill is law.

"We will review the bill beginning now and start the work," she said.

Eric Mackey, the executive director of School Superintendents of Alabama said he didn’t think departmental rules alone could get around the law’s 10 percent requirement.

“My opinion is no, because the law makes it clear that 10 percent of schools would be in failing status,” Mackey said.

"From the beginning that has been the part of the law with which I have disagreed the most,” he said. He compared the 10 percent rule to the business philosophy of former General Electric CEO Jack Welch, who was known for firing his lowest-performing managers regularly regardless of the company’s overall performance.

“This is the most unfair system for grading either individuals or schools or businesses, or insurance agents for that matter,” he said.

Fixes on the way?

Bentley said that issues in the legislation that couldn’t be fixed through rules could be handled through future legislation. In fact, a bill introduced Thursday would be the first such fix.

In recent days, new debate has emerged about which version of the Accountability Act was actually passed by legislators. One version of the bill contained wording that would allow public school systems to reject out-of-district students from failing districts if they didn’t have room for them. Another version didn’t have that wording.

Marsh said a bill was introduced in the Senate Thursday that would ensure that the version with the right to deny out-of-district students was part of the act.

Mackey, of the School Superintendents of Alabama, said he expected lawmakers to eventually consider another major change. The act, as passed, doesn’t set an upper limit on the income of parents who receive the tax credit.

“I’ve talked to legislators who said that was not their intent,” he said.

Many other states with similar tax credits limit eligibility so that only low-income families can apply.

Legislators may not have to wait until next year to see those changes made. Marsh said that the quick progress of the budget and other major bills through the Senate may allow time for a clarifying bill within this legislative session, which ends in May.

“We’re going to have some time on our hands,” he said.

The bill is likely to face another court challenge soon from the AEA. Before the governor's announcement, AEA executive secretary Henry Mabry said a new lawsuit could be filed as early as Friday.

Mabry wouldn't comment on the legal strategy the association would pursue in the lawsuit.

"I guarantee it will open their eyes," he said.

Speaking before the bill's signing, Mabry said he didn't doubt the governor would sign the act.

"That's his prerogative," he said. "But the people of Alabama will make him regret it."

Capitol & statewide correspondent Tim Lockette: 256-294-4193. On Twitter @TLockette_Star.

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