With the stroke of Gov. Kay Ivey’s pen, Alabama is now the 16th state to put public education funding in the hands of families.
The Yellowhammer State joins 14 states offering education scholarship accounts, and Oklahoma, with a fully refundable tax credit that functions much like an ESA.
Compared to similar programs that are sweeping the country, six features of Alabama’s new program are noteworthy:
The funding mechanism: Like the groundbreaking program passed last year in Oklahoma, Alabama’s Choose Act allows families to qualify for refundable individual tax credits. Families can receive up to $7,000 per child, or the total amount of eligible expenses per child, whichever is less. The Legislature is setting aside $100 million to fund the tax credits in the first year of the program.
Schooling vs homeschooling: Also like the Oklahoma program, Alabama’s tax credit ESAs would treat schooling and homeschooling differently. Tax credits for homeschoolers are capped at $2,000 per child, and $4,000 per household. Only families who send their children to qualifying private schools could receive the full $7,000-per-child credits.
Afterschool, summer and public-school programs: Alabama’s new program covers afterschool and summer programs, which often aren’t included in other states’ ESAs. These programs would have to be delivered by eligible schools to qualify. It also allows parents to spend their funds on contracted services, including classroom instruction, offered by public schools.
No rollover: Alabama families will not be able to roll over funding from year to year to accumulate savings in their accounts.
Testing: Participating schools will be required to administer their choice of qualifying standardized tests and report school-level results to the state.
Prioritization: For the program’s first two years, participation will be limited to families with household incomes below 300% of the federal poverty level. After that, eligibility will become universal.
