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House Now Moves To Save Riley SGO

By Bill Britt
Alabama Political Reporter

MONTGOMERY—On Wednesday, the House will take up the bill that will expand the Alabama Accountability Act to save one particular Scholarship Granting Organization (SGO).

Senate President Pro Tem Del Marsh (R-Anniston) sponsored SB71, which would not only expand the cap of donations under AAA from $25 million to $30 million, it would also allow for retroactive tax credits and give SGO’s the ability to bring forward unused money from previous years.

But, most importantly, it would save former Gov. Bob Riley’s Alabama Opportunity Scholarship Fund (AOSF) from embarrassment.

There are currently nine SGOs but there is only one that appears to be getting special consideration, or is in need of the amended legislation. That is Riley’s Alabama Opportunity Scholarship Fund, which is actually owned by the Florida-based Step Up For Students.

According to an internal memo from Riley’s SGO, AOSF needs approximately $15 million by May 1, 2015, just to renew its current scholarship obligation. Under the provisions of the current law, Riley’s SGO could default on renewals and would not be able to enroll new students.

Riley’s SGO recently added wording to its webpage which points to potential problems ahead: “Due to limited funding and legislation that is currently under review, AOSF is only processing applications for new students who are zoned to attend a ‘failing’ public school for the 2015-2016 school year.”

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Riley’s own internal memo shows the SGO is on the verge of collapse if the legislature doesn’t act quickly.

AOSF’s own accounting shows that the group needs $15,110,300 just to renew students from the 2014-2015 school year.

AOSF Director Leslie Sercy confirmed in December 2014, that Riley’s SGO had only raised $641,000 in 2014, far short of what is needed to even renew students, who are counting on scholarships from AOSF.

The Legislature has been told that Riley’s anemic fundraising was due to the failure of the State’s Supreme Court to rule on the constitutionality of the act.

The case was sent to the high court after Montgomery Judge Gene Reese ruled the law unconstitutional, in May of 2014. Riley’s argument is that the courts are to blame for the slow fundraising, but his argument is troubled by the fact that all SGOs had five months to raise money before Judge Reese ruled. The other SGOs raised millions, even while the Supreme Court considered the case.

Total donations raised by all SGOs in 2014, was $13,414,758. Riley’s SGO $641,000 meaning the others received $12,773,758.

Not only do the numbers point to the fallacy of the argument being given at the State House, they raise serious questions about long-term viability.

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Legislators who spoke on background said, Speaker Mike Hubbard is twisting arms to pass the bill and they are afraid to cross him.

While Marsh continues to be the face of the AAA expansion, many feel it is Hubbard who must deliver for his old mentor.

It must be noted that like Riley’s Florida-SGO, the money to support the AAA and the charter school bills have come from big out-of-state donors. Two groups, The Alabama Federation for Children, headed by former Hubbard operative Ryan Cantrell, raised $350,000 from out-of-state billionaires to fund pro-AAA candidates in 2014 and Students First another foreign entity that spent $200,000 on privatizing public schools using taxpayer funds.

Time is running short for Riley’s SGO to meet its May 1 deadline, while inside the State House, Hubbard and Marsh are working diligently to provide a lifeline for the former governor.

Bill Britt is editor-in-chief at the Alabama Political Reporter and host of The Voice of Alabama Politics. You can email him at [email protected] or follow him on Twitter.

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