Redirect your Alabama taxes to local schools legally

Last year I posted about this in December. This year I am a few months earlier because I am going to beat the drums on this one until everyone hears me! Here’s the simple truth of the matter: Alabama has a poor track record educating our kids. We have challenges on this front to be sure, we have a poor population without a tradition of educational advancement. We have a subculture, white people and non-whites too, that lacks a culture of academic achievement. Still, we spend less on education that most states, tie funding for schools to an antiquated property tax structure and struggle to re-zone our communities to match the patterns of population shifts. As a state, we have a big problem and poor track record of being able to solve that problem.

In Alabama we have a mix of public schools, private schools, independent schools, church schools and now charter schools. Public schools are funded by the Alabama Legislature and by local ad valorem taxes (ad valorem taxes mean that you have to pay a portion of the value of any real estate you own to the county each year). As a way to help fund schools that are trying something different in poor neighborhoods, the Alabama Legislature voted a few years ago to create a fund of up to $30 million dollars. Families with children zoned for a Title 1 school (that is a school with a high percentage of free lunch kids) can apply to one of several Scholarship Granting Organizations approved by the State for a scholarship to a competing private school.

This structure empowersScreen Shot 2016-09-06 at 1.00.26 PM the parents of kids living in or near poverty to do something about the difficult school environment in most Title 1 schools. Now, instead of moving across town, they can apply for a scholarship that will allow them to pay $6,000, $8,000 or $10,000 a year for elementary, middle or high school kid respectively to attend a private school. To me, this is a great way to try and see if those kids can do better in another environment, without having to be wealthy.

So, here is your task for today. Call your tax advisor and tell them that you want as much as the law allows to be redirected to one of the Scholarship Granting Organizations (SGOs). There are two that support Lincoln Academy so please choose one of those. They are RocketSGO based in Huntsville and Scholarships for Kids (S4K) based in Birmingham. Either will work for our purposes. Your tax advisor will use the My Alabama Taxes website to enter the amount of your “donation”. It’s not really a donation since you were going to pay it to the general fund anyway if you had not been allowed to redirect the funds. If you need help with this or if your tax advisor has questions please send them to me.