S.C. court orders group to name recipients of school choice money
A judge says S.C. tax officials have a right to know who has received private school tuition grants from the state’s largest school choice nonprofit.
Administrative Law Court Judge Ralph Anderson directed Palmetto Kids First Scholarship Program to give the S.C. Department of Revenue the names of the parents or guardians of children who received the tuition grants to go to private schools.
The Revenue Department asked for the names last year after receiving complaints the nonprofit had offered parents a quid-pro-quo deal – promising tuition grants to parents of children who made donations, which qualify for state tax credits, to Palmetto Kids.
Citing privacy concerns, Palmetto Kids refused to release the names to the Revenue Department, filing a complaint in court instead.
The nonprofit has denied offering grants in exchange for donations, which would make parents ineligible for the tax credits under state law. Only 3 percent of Palmetto Kids’ donors received grants, said operations director Olga Lisinska.
The tax agency has said it wants to ensure that the tax credits – capped at $8 million a year – are issued fairly. Donors can use the credits to reduce the state taxes that they owe by up to 60 percent.
The court battle comes as lawmakers are on track to renew the private school choice program for special-needs students for a third year. The dispute also highlights the way state leaders opted to offer school choice.
Rather than offering traditional vouchers paid by state tax dollars, state lawmakers agreed to offer tax credits for donations made to nonprofits that would collect donations and issue tuition grants to special-needs students to attend private schools.
A state Senate proposal would give the Revenue Department the right to approve and remove nonprofits participating in the program.
Palmetto Kids has not decided whether to appeal Judge Anderson’s order, issued Thursday. The Mount Pleasant-based nonprofit has 20 days from when it was notified of the order to give the Revenue Department the names of parents of grant recipients and other families who applied for but did not receive grants.
Lisinska said 1,300 children have received private school tuition grants from Palmetto Kids since the state launched the choice program in 2014.
During that period, the nonprofit has raised $12 million. Donors to Palmetto Kids qualified for 86 percent of the tax credits lawmakers have approved.
Lisinska said the tax agency does not need her group’s records, saying the Revenue Department has been contacting donors directly, asking them whether they received scholarships.
“There is no point in asking for the names other than to claim a victory,” she said.
An earlier version of this story misstated the day the judge’s order was issued.
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Senate begins budget debate
The S.C. Senate will continue debating Tuesday how to spend nearly $7 billion in state general fund money.
Senators are one step closer to deciding spending levels for the state’s fiscal year that starts July 1, giving an initial nod of approval to the budget Monday.
The budget proposal needs only one more vote by senators before it is sent back to the S.C. House. Senators still can make changes during debate Tuesday.
The most heated debate over state dollars is yet to come.
Senate President Pro Tempore Hugh Leatherman, R-Florence, hinted Monday at an impending fight over his plan for the state to borrow $237 million.
Leatherman wants the state to borrow the money for colleges, tech schools and armories. But Republican Gov. Nikki Haley, who helped defeat a similar proposal in the S.C. House, has said she would veto Leatherman’s proposal.
“You can’t get something for nothing,” Leatherman said Monday, reminding senators they will decide whether to debate the bond package.
That package is made up of $15 million for deteriorating S.C. armories and $222 million to address building needs at S.C. colleges and technical schools.
Failing to train S.C. workers for future jobs, promised by economic-development deals, would ruin efforts to land more employers, Leatherman said, defending spending more on schools.
“We (won’t) have to worry about any other companies coming to South Carolina” if schools are shortchanged, he said. “I can assure you they will not be here.”
Cassie Cope
This story was originally published May 4, 2015 at 4:11 PM with the headline "S.C. court orders group to name recipients of school choice money."