Dereliction of Duty

The Rush to Privitization -- Vouchers and Tuition Tax Credits

Florida’s constitution clearly provides that state revenues cannot directly or indirectly support religious institutions. Yet state legislators forged ahead, enacting not one but three voucher programs that divert millions of dollars each year to private, religious schools. Following the passage of the Opportunity Scholarship program, People for the American Way Foundation and other education organizations filed a lawsuit in state court contending that the voucher program violates the state constitution. In August 2002, State Circuit Court Judge Kevin Davey agreed,5 but as this decision is currently being appealed by the state, public taxpayers dollars continue to fund the state’s private and religious schools.

When it comes to subsidizing private and religious schools with public funds, Florida leads the nation. The state has three voucher and tuition tax credit programs enrolling more than 25,000 students and costing public taxpayers millions of dollars each year (see Table A).

These millions are spent without any significant oversight and without any substantive evaluation to determine whether such programs are truly effective. In fact, since Florida private schools aren’t strictly evaluated like public schools, once a student uses a voucher to attend a private school, he or she bypasses the state’s system of accountability altogether.

Table A: Florida’s Voucher and Tuition Tax Credit Programs
ProgramCost Enrollment6
Opportunity Scholarships—enable students to transfer out of poorly performing public schools to private and religious schools.An Opportunity Scholarship voucher can be worth up to $5,900;7 costs for the program are not available.Opportunity scholarships were available to about 13,700 students in 2003, but only 660 actually opted for the voucher.
McKay Vouchers —enable students with disabilities to attend private and religious schools.The average McKay voucher costs more than $5,500; the program has cost an estimated $86 million since 2000.8Approximately 400,000 students are eligible for McKay vouchers. In 2003, an estimated 12,200 received disability vouchers.
Corporate Tuition Tax Credits —provide students with tuition scholarships to attend private and religious schools.The average scholarship costs $3,500; by this year, the program will cost an estimated $138 million. 9Nearly 3 million students are eligible for corporate tuition tax credit vouchers. In 2003, 12,339 such vouchers were issued.

Florida’s voucher programs grew out of the influential lobbying of pro-voucher Republicans and advocacy groups. The McKay voucher program was the creation of Florida’s former senate president, John McKay.10 Opportunity Scholarships were created by Jeb Bush under his “A+ Plan” for educational accountability.11 And a Tampa businessman, John Kirtley, heavily influenced the corporate tuition tax credit legislation by reportedly donating $100,000 to the Republican Party.12

The state’s voucher and tuition tax credit legislation were drafted to include only minimal state oversight and inadequate enforcement. As a result, officials at both the state and district level seem ill equipped to handle the myriad of financial and academic accountability problems that have emerged through the state’s voucher implementation efforts.

Recent newspaper articles show that some Florida private schools participating in the voucher and tuition tax credit program have been operating outside the parameters of the state law. Some schools have operated in conditions detrimental to the health and safety of their students. Other schools have provided students with a dubious quality of education, non-certified or unqualified teachers, and inadequate services. Scholarship organizations responsible for providing students with tuition vouchers have been accused of financial mismanagement, including the neglectful management of millions of public taxpayer dollars, providing vouchers to phantom students, funding homeschools, and funneling money to a school with alleged ties to terrorists.

Due to the myriad fiscal and programmatic problems with vouchers, there are five separate investigations being conducted of the three voucher programs.13 The state’s Office of Fiscal Integrity even launched a criminal investigation of FloridaChild, the largest scholarship funding organization.14 Among financial mismanagement and other irregularities, FloridaChild has been accused of illegally charging parents a $15 application processing fee, accepting millions of dollars in transfers from other voucher groups, and soliciting a two percent donation from the private schools that received vouchers.15 Despite claiming that the charges were misleading, FloridaChild recently exited from the scholarship funding business.16 Patrick Heffernan, the organization’s director, rightly points out that his is not the only group with irregular practices.17 A private voucher school hailed as a model by John Kirtley (and funded by his Jacksonville-based scholarship organization, HEROES) is being investigated by the state Department of Education on charges that the school illegally forged parents’ signatures on voucher checks.18

Even though evidence shows voucher programs are poor public policy, Florida state legislators have irresponsibly chosen to expand these programs without any indication that they effectively provide school children with a better quality education. U.S. Representative Jim Davis (D-Florida) explains: “Our state is as far out there as any state in the country in what I believe is a reckless experiment. You’re going to be hearing a lot more about Florida. The facts speak for themselves.” Similarly, a senior official in Governor Bush’s Department of Education privately stated that the state’s voucher programs are “nationally embarrassing…We cannot even appear to be on top of things.”19

Representative Davis’ words were prophetic. Vociferous criticism leveled at Florida’s voucher programs by the state media and local education organizations prompted Florida’s Senate President Jim King (R-Jacksonville) to demand greater oversight and accountability.20 In August 2003, Education Secretary Jim Horne adopted an accountability questionnaire that requires more reporting from the organizations that provide students with tuition vouchers.21 Horne also introduced draft legislation to further reform the voucher programs in October 2003.22 However, this increased oversight is largely cosmetic and does not reach the level of accountability demanded of public schools.

Continued criticism of the voucher programs and of Horne’s accountability plan prompted the state’s Department of Financial Services to step in and conduct an audit of the three voucher programs.23 The agency is led by Tom Gallagher, an active proponent of Florida’s voucher programs and one of the architects of school grading under the A+ Plan.24 In December 2003, the agency published two audit reports that offered a blistering criticism of Governor Jeb Bush’s voucher programs and of the Department of Education’s inept leadership. Gallagher, the state’s chief financial officer, states: “Overall, the Department of Education’s failure to assign leadership to this program, combined with the absence of active participation in program management, has created a lack of accountability….” Gallagher goes on to explain that lack of critical controls, failure to adopt programmatic rules and procedures, and high management turnover has lead to instability, abuse and potential criminal activity within the voucher programs.25 (See Table B for details on the lack of accountability within Florida’s voucher programs.)

In January 2004, an investigation by Gallagher even lead to the filing of a criminal charge and an arrest. James Isenhour, the operator of Silver Archer Foundation, a scholarship funding group, was charged with stealing more than $268,000 in voucher money. The money was used to pay Isenhour’s other companies, his bankruptcy lawyers, and himself.26 (See Appendix A for details on other investigations.)



Table B: Accountability Checklist for Florida’s Three Voucher Programs
Accountability ProvisionsLegislated or Implemented
DOE has rules in place to govern vouchersNo
DOE has clear audit standards for groups getting tax moneyNo
DOE has a program management plan to make sure vouchers comply with state lawNo
DOE has written procedures for legal complianceNo
DOE checks to make sure private schools meet requirements of lawNo
DOE checks to make sure students meet eligibility criteria and are actually attending schoolNo
DOE makes sure voucher checks are not fraudulently cashedNo
DOE has agreements with private organizations empowered to spend millions on vouchersNo

Source: “Editorial: Voucher Oversight,” St. Petersburg Times, December 14, 2003.

Gallagher’s criticisms are echoed by other elected officials and the media. House Democratic Leader Doug Wiles explains that the “Department of Education should be embarrassed. [The] audit shows a willful lack of accountability and a complete disregard for the tax dollars of the hard working people we represent. Clearly, the audit results demonstrate a systematic effort to cover up massive problems with the school choice program.”27 An editorial in the St. Petersburg Times asks if “anyone [is] minding the voucher store,” charging that the voucher programs show “an abdication of responsibility that is breathtaking in its sweep. In four quick years, Florida has created three different voucher programs that now serve 24,000 students at a cost of roughly $135-million. Yet DOE, until just two months ago, couldn’t even determine which students received the money and whether some of them were getting more than one check….”28

Critics contend that the accountability measures instituted by Education Secretary Jim Horne are merely superficial rather than a rigorous attempt to inject the state’s voucher with more oversight. The state recently suspended voucher payments from 100 private schools that service 1,700 students through either McKay or tuition tax credit vouchers. The funding suspension was due to non-compliance issues and other legal problems.29 But according to a Palm Beach Post editorial, the Department of Education was unable to release an accurate list of the affected private schools because the very same schools allege that the Department’s information is incorrect.30 Given that the Department does not have accurate records on private voucher schools or scholarship funding organizations, it is unclear how this data will be verified.

But despite the massive fiscal and accountability problems associated with Florida’s voucher programs, significant changes to these programs do not seem to be in the cards. Although many in Florida’s Senate appear to be committed to reforming the voucher program, observers anticipate that the House will, in all likelihood, pass only softer changes to the legislation such as preventing scholarship organizations from being operated by people with recent bankruptcies or criminal records.31

Without adequate reform, the state’s voucher programs will continue to operate much as they have to date—without meaningful state oversight and under no obligation to ensure that state money is spent on quality educational programs.

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