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“AAA the gift that keeps on giving,” maybe not

By Larry Lee 

Legend has it that the phrase “the gift that keeps on giving,” was used to describe early versions of the phonograph in the 1920’s.  Just 31 months ago the legislature gave us an act that they promised would also, “keep on giving.”  It was the Alabama Accountability Act.

But as more and more info about how this legislation is actually working, it is obvious that for the most part, AAA has way underperformed.

As I pointed out here, Scholarship Granting Organizations were supposed to have reports covering from Jan. 1, 2015 to June 30, 2015 to the Alabama Revenue Department by Sept. 1.  Revenue considers nine SGOs to be presently operational.   Three of them met the September deadline and two have just submitted reports.  This means four are on the verge of being “de-listed” by Revenue.

Here is what we now know happened in the first six months of this year.  A total of $11,815,131 was raised by five SGOs.  (Donations made to an SGO are treated as tax credits by the state.  A donor gives $10,000 to a scholarship group and claims a $10,000 credit.  Had they paid their tax instead, the money would have gone to the Education Trust Fund.  In reality, these participants aren’t truly donors, instead, they are taxpayers directing their taxes away from public schools.)

These five groups gave out a total of 771 scholarships through the first two quarters of the year.  Of these, 183 went to students who were already attending a private school.  (Remember, we were told originally that the intent of this legislation was to help students stuck in failing schools by their zip code.  No one ever mentioned that scholarships would go to kids who were already in private schools.

Interestingly enough, of the five SGOs that have now reported, only two gave any scholarships from January-June.  These were Scholarships for Kids of Birmingham (761) and Rocket City SGO of Huntsville (10).  Though the Alabama Opportunity Scholarship Fund created by Bob Riley raised $10,170,474, they gave no scholarships.

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However, in an article by Mike Cason of, Executive Director Lesley Searcy says the riley SGO (which is actually controlled by a Florida group) has awarded 2,059 scholarships since June 30.  This is 1,549 than they awarded in 2014–a decrease of 43 percent.

As always, we’re left with unanswered questions.  The law clearly states that a student receiving a scholarship is eligible for one the following year if they are still in school.  So the riley SGO didn’t renew 1,540 scholarships?  And why wait until mid-summer to let both students and schools that they have a scholarship?

Here is what we know as of Sept. 20, 2015.  Revenue Department records show a total of $14,171,765 has been raised this year to be counted on 2014 returns (an amendment to AAA in the last regular session opened this door) and 2015 returns.  This, plus what was given in 2013 and 2014 means we have now diverted $52,372,354 million from the Education Trust Fund to scholarships.

Through June 30, 2015 a total of 6,572 scholarships were given with 1,250 going to students already attending private schools.  If you add the 2,059 AOSF says they have awarded since June 30 and divide that number into $52,372,354, you get $6,695.

This is the average amount being taken from public schools to give a child a scholarship.  (The state gives an average of $5,828 per student to local systems..

Yep, the gift that keeps on giving.  Only problem, who is doing the getting?


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Larry Lee led the study, Lessons Learned from Rural Schools, and is a long-time advocate for public education.  [email protected]  read his blog:

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