Opportunity Scholarship Act, questions and answers

The following questions and answers on the Opportunity Scholarship Act were prepared by the New Jersey School Choice Alliance.

What is the OSA?

The Opportunity Scholarship Act (OSA) is a pilot corporate tax credit scholarship bill that will fund scholarships for low-income students attending the state’s lowest performing, chronically failing public schools. The scholarships would enable students to attend out-of-district public schools, or non-public schools anywhere in the state, that choose to participate in the program.

How is the OSA funded?

Corporations eligible to pay the corporate business tax (CBT) in New Jersey would be allowed to take a 100% tax credit against their CBT obligation for donations made to the OSA scholarship fund.

Who is eligible to receive a scholarship?

A low-income student attending a chronically failing public school in one of the pilot districts as defined by The Act. There are 130 such schools in the bill’s 13 pilot districts. Low-income is defined as no more than 2.5 times the federal poverty level, based on family size. For example, a family of four, to be eligible to participate, could not exceed $55,000 in income annually. Twenty-five percent of the scholarships are also available to low-income students attending non-public schools in the 13 pilot districts.

Is the NJ state budget affected by the loss in state revenue from the tax credits granted to participating corporations?

No. The program is revenue neutral to the state and revenue positive on a per pupil basis to the pilot districts. The total tax credits allowed under the program will be offset by a reduction in total state aid to the pilot districts for the costs of the program, and (The Office of Legislative Services estimates that) over $340 million will be returned to these districts for 30,000 students they no longer have to educate.

Are there programs like the OSA in other states?

The OSA is modeled on Pennsylvania’s highly successful Educational Improvement Tax Credit program. The program is oversubscribed by businesses annually, with over 2,300 companies contributing $260 million to date, allowing 33,000 Pennsylvania children over the life of the program to attend participating schools of their parent’s choosing. Other states with such programs are Arizona, Rhode Island and Florida.

Additionally, states like Ohio and Florida have also passed scholarship programs targeted at students in chronically failing schools. Over 80,000 students are currently enrolled in Ohio’s EdChoice scholarship program.

Are there other programs like the OSA in New Jersey?

Both in New Jersey and nationally, there is a well-established history of government funding for students to attend public or non-public schools of their own choosing. In New Jersey, children can attend preschools, special education providers and colleges chosen by their families and paid for by the state.

Additionally, New Jersey has a long history of tried-and-failed urban education reforms. The children in the state’s worst schools, and those who attend the 130 in the pilot districts, should not have to wait one more day to gain access to functioning schools, wherever they may be.

What districts with chronically failing schools are identified in the OSA pilot?

Thirteen districts have been identified for the OSA pilot. They are Asbury Park, Camden, East Orange, Elizabeth, Jersey City, Lakewood, Newark, Orange, Passaic City, Paterson, Perth Amboy, Plainfield and Trenton.

How are the chronically failing schools in these districts performing?

A chronically failing school is one where 40% or more of students failed both the state’s math and language arts assessments for the last two years, or 65% or more of students failed either of these same tests for the last two years. There are 130 of these schools in the pilot districts.

Is government aid to private and religious schools constitutional?

Yes. Indirect aid to non-public schools, such as under the OSA, is perfectly legal and does not violate the “establishment clause” of the United States Constitution. Programs such as the OSA were upheld by the U.S. Supreme Court in the landmark Zelman v. Simmons-Harris decision, which analyzed the City of Cleveland, Ohio’s school choice program.

Parent choice is the key factor making programs like the OSA constitutional. The 1971 case Lemon v. Kurtzman (The Lemon Test) also upholds such programs which grant “indirect,” parent-directed aid to non-public schools.

It is worth noting that the state already funds non-public and religious schools through aid programs for transportation, textbooks, nursing and technology. Additionally, the state’s widely lauded preschool program, out-of-district placements for special needs students in non-public schools under I.D.E.A., and numerous college scholarship programs—such as the state’s Tuition Aid Grants—also allow students to select non-public and religious schools with public funding.

How is the program managed locally?

The OSA provides for the creation of Scholarship Organizations (S.O.). A board with one member appointed by the governor, one by the president of the Senate, and one by the speaker of the Assembly will choose the S.O.s There will be three S.O.s, one in the north, one in the central and one in the southern region of the state, with one being designated the lead S.O. to handle the allocation of scholarship funds. The S.O. will be responsible for a variety of tasks related to the implementation of the OSA program, including:

(1) managing the scholarship application process for the pilot school district;

(2) reviewing and verifying the residence and income of a scholarship applicant;

(3) compiling an inventory of vacancies in participating schools available for potential scholarship recipients;

(4) conducting necessary student selection lotteries;

(5) monitoring the enrollment of scholarship students in eligible schools and allocating scholarship funds to those schools.

What assurances are in the OSA to guarantee equal access and student civil rights?

The OSA specifically prohibits any discrimination on the basis of race, academic ability, disability, or athletic ability during the admissions process. In fact, participating non-public schools are held to the same standards as traditional public schools in this regard. The OSA does, however, allow for single-sex schools to admit students based on their sex.

What if more students apply for scholarships than there are spaces in their grade levels available at a participating school?

In the event that more children apply for admission under the pilot program than there are openings at a participating school, a lottery will be used to determine which children are selected for admission, except that preference for enrollment may be given to siblings of students who are already enrolled in the participating school. This process is the same as New Jersey charter schools must follow.

How much are each of the scholarships worth?

At a minimum, scholarships are worth the audited cost to educate a student at a participating school. At a maximum, scholarships are worth the higher of a percentage of the average per-pupil costs in all pilot districts with chronically underperforming schools, or $8,000 for students in grades K to 8, and $11,000 for high school students.

What if the actual tuition is more than the amount of the scholarship?

Participating public and non-public schools must accept the scholarship as payment in full. The OSA forbids participating schools from charging families any more for tuition than it receives from the program’s scholarships.

For more information, go to www.njcathconf.com