This has been updated to reflect the changes enacted in 2015: http://www.slideshare.net/ALSchoolConnect/alabama-accountability-act-the-basics-updated A look at the basics of the Alabama Accountability Act. Accompanies an article on http://www.alabamaschoolconnection.org

1. What is the Alabama
Accountability Act (AAA)?
The Alabama Accountability Act (AAA) is a law, enacted during the 2013 Alabama
legislative session, that provided for four big changes in public education in Alabama:
(1) Flexibility for how local school boards can spend money to improve education in
innovative ways.
(2) School Choice for students zoned to “failing” schools.
(3) Tax Credits for families who incur costs to transfer out of “failing” schools, into
either qualifying nonpublic schools or non-failing public schools.
(4) Tax Credits for individuals and corporations who donate to Scholarship
Granting Organizations (SGOs), which provide scholarships for income-eligible stu-dents
to transfer out of “failing” schools.

2. Why is it controversial?
The first big controversy was how the AAA was passed through the legislature.
Two versions of the bill, one in the House and one in the Senate, were approved.
A Conference Committee was convened to determine how to merge the two versions.
The bill went into the Conference Committee as a 7-page bill as emerged as a 28-page
version.
Two state lawsuits have been filed questioning both the way the law was passed and
whether multiple subjects can be included in a single bill.
One was dismissed, and the second was recently argued to the Alabama Supreme Court.
A decision is expected in the near future.
A federal lawsuit was filed and has been appealed to the 11th Circuit. That lawsuit claims
not all students have access to the choice offered under the AAA.

3. What other controversies are
there?
Critics claim the AAA weakens both financial support and perception of public schools by:
(1) Labeling schools as “failing” creates negative attitudes toward the school, which
includes the teachers, the students, and the surrounding community.
(2) Providing tax incentives for movement away from “failing” public schools further
drains needed resources to improve education at the school.
Critics also claim that the AAA relies on flawed methodology to label a school as “failing”.

4. How does a school get labeled
as "failing"?
The formula used to label a school as failing was dictated by the AAA.
Until the Alabama State Department of Education (ALSDE) begins to use letter grades to
grade schools (which will happen not later than 2017), the formula is:
(1) any school listed as persistently low-performing from the U.S. Department of
Education’s School Improvement Grant, and
(2) any school that has scored in the lowest 6% on standardized tests in reading and math
for three of the last six years.
72 schools are on the list for the 2013-2014 school year.
[Source: ALSDE Talking Points, ALSDE web site.]

5. Can schools get off of the
"failing" list?
Yes, but because the methodology looks at six years of standardized test data, it is
possible that it could take nearly that long to get off of the list.
For the 2014-2015 school year, seven schools were removed from the list, and five
schools were added.
The list for the 2015-2016 school year should have been posted on the ALSDE web
site before November 1, but has not yet been published. [Source: Alabama Administrative
Code, Section 290-4-1-.04(1)]

6. Will the "failing" list ever
contain no schools?
There will always be a “failing” school list, unless the law is changed.
The law demands the bottom 6% of schools be labeled as “failing”, regardless of
any improvement the school is obtaining.
Therefore, 6% of Alabama’s schools will always be on the list.

7. How does the AAA drain
resources from a "failing"
school?
By offering students in a “failing” school the option and the means to leave a “failing”
school, the school loses enrollment, which ultimately:
Causes fewer dollars to be allocated to the school at the state level,
Leaving fewer dollars available to staff properly, and purchase needed materials for
schools.

8. But shouldn't "failing" schools
be closed?
In theory, perhaps. But the reality is that a neighborhood school can’t simply be closed
without options being available for students.
Questions to consider:
• Is the formula used to determine whether a school is “failing” valid?
• If the school isn’t just shut down all in one action, what becomes of the students left
behind in the “failing” school that now has fewer resources?
• Do the students in the “failing” school have other options to obtain a free public
education that should be expected according to Alabama’s Constitution?
Local Boards of Education have full control in determining whether a “failing”
school should stay open and what to do to improve a “failing” school.

9. Doesn't some state money
stay at the "failing" school
even if the student leaves?
Only if the student transfers to a private school, and
Only if the student formally notifies the principal that he is transferring to a private
school.
If both of those things happen, 20% of the state allocation for that student is supposed
to remain at that school.
The mechanism for ensuring that happens hinges on the student notifying the principal.

10. What are the types of tax
credits available?
There are two types of tax credits available in the AAA:
Parent tax credits for the cost of transferring the student to private school, which can
include tuition costs, and
Donor tax credits for donations made to Scholarship Granting Organizations (SGOs)
by individuals and corporations.

11. How do tax credits reduce
money for public schools?
Tax credits are refundable, meaning the total tax bill for the taxpayer is reduced,
dollar-for-dollar, resulting in fewer dollars being paid as taxes.
In order to allow taxpayers to actually claim a tax credit, the legislature must set aside
a pot of money from the Education Trust Fund (ETF) that would otherwise be allocated to
the ETF budget.
However, the money set aside may or may not have been given to K-12 public
schools.
The money set aside is taken from the ETF budget as a whole.
The ETF budget contains allocations for a lot of agencies other than K-12 public schools,
including public colleges and universities in Alabama.
The FY2015 allocation amounts from the ETF budget total $5.93 billion, with $4.1 billion of
that going to K-12 public schools.

12. What about the $40 million
that everyone talks about?
When the AAA became law, the legislature “set aside” $40 million from the total ETF
budget that could be used as tax credits, either from families or corporations.
In other words, that money was never appropriated or allocated for anything.
$25 million of that was set aside for individuals and corporations who made donations to
Scholarship Granting Organizations (SGOs).
Nearly all of the $25 million was claimed in tax credits for the 2013 calendar year.
$15 million of that was set aside for families who claimed tax credits due to the cost of
transferring to a non-failing public school or a qualifying nonpublic school.
Families claimed only around $100,000 of the $15 million set aside for the parent tax
credit portion.

13. What happens to the money
that wasn't claimed as a tax
credit?
According to the Alabama Department of Revenue (ADOR), there is an annual transfer
of the total amount of the tax credits from the ETF into the Failing Schools Income Tax
Credit Account.
The ADOR Revenue Commissioner must the total amount of tax credits claimed.
Then the transfer will be made from the ETF into the Failing Schools Income Tax Credit
Account.
Any money left over can be used for conditional appropriations (things the legislature
wanted to spend money for but couldn’t afford to do so) or other purposes the legislatures
chooses.
[Source: ADOR 2013 General Summary of State Taxes, ADOR web site, pp. 16-17.]

14. How much can be claimed as a
tax credit?
If a parent chooses to move their child out of a “failing” school and incurs any costs
associated with that transfer, an amount up to 80% of the average cost of attendance
for a K-12 Alabama public school can be claimed as a tax credit.
That amounted to about $3,500 for the 2013-2014 school year.
There are no restrictions on parent income for eligibility for the tax credit.
The full amount of a contribution to an SGO, whether made by an individual or a
corporation, can be used as a tax credit, up to 50% of the total tax bill of the donor.
Individual contributions are capped at $7,500 per tax year. Corporate contributions have
no upper limit, except as determined by the 50%-liability rule.
The tax credit can be carried forward for up to three years.

15. Tell me more about the SGOs.
SGOs are non-profit organizations that accept contributions and then use those
contributions to assist income-eligible students with the cost to:
• attend a non-public participating school, or
• transfer to a non-failing public school outside of their district (such as
transportation costs).
SGOs can only grant scholarships to students who meet eligible income requirements.
SGOs are required to publicly file annual reports by June for the previous calendar year
(as opposed to school year).
SGOs are required to meet guidelines under the AAA in order to participate.
A list of participating SGOs is published on the Alabama Department of Revenue web
site.

16. Are SGO scholarships only
available for students zoned
for "failing" schools?
Students zoned to “failing” schools take first priority.
Prior to September 15, scholarships can only be awarded to income-eligible students
zoned for “failing” public schools.
After September 15, if SGOs have money left over, scholarships can be awarded to any
income-eligible student, regardless of whether the student is zoned for a “failing” public
school.
The key limitation has to do with income-eligibility requirements.
The September 15 date will likely be changed to an earlier date in the 2015 legislative
session. Proponents of the date change claim the September 15 date is after the school
year begins, leaving students waiting on scholarship awards in a precarious position.

17. What are the income
eligibility guidelines?
Only students in families meeting income-eligibility guidelines are eligible for
SGO-awarded scholarships.
The AAA defines income eligibility as 150% of the median Alabama income. The most re-cent
calculation of Alabama’s median income is $40,489, resulting in an income level of
$60,733 for a family.
Once a student becomes eligible, the student remains eligible regardless of changes in
family income, until the student graduates from high school or turns 19 years old.
Remember, though, that eligibility is also determined in part by whether a student
is zoned to a “failing” public school, which takes into account the grade levels within a
school.

18. Can SGOs give scholarships
to students already in private
school?
Yes, but there are different rules for first-year scholarship awards versus renewals.
SGOs must make certain that 75% of first-year awards are given to students who are
not already attending private schools.
That leaves 25% of first-year awards to be granted to students who are already
attending private schools.
There are no restrictions on renewals, meaning that once a student receives a scholar-ship
from the SGO, she can continue to receive scholarships until she completes school.

19. How long is a parent eligible
to receive tax credits?
A parent is eligible to receive a tax credit for the cost of attending a nonpublic qualifying
school as long as the student is zoned to attend a “failing” public school.
For example, if a student is entering 6th grade, and the school where the student will at-tend
6th grade is labeled “failing” under the AAA, the parent is eligible to claim a tax credit
for the cost of attending a nonpublic qualifying school.
If by the time the student is entering 7th grade, the school to where the student is zoned is
not a “failing” public school, the eligibility for the parent tax credit ends.
Or, if the “failing” public school remains “failing” for the 7th and 8th grade years, the
eligibility for the tax credit is extended through those years.
If the student moves or if the zoning changes, and the student is no longer zoned for a
“failing” public school, eligibility for the parent tax credit ends.
[Section 810-3-60-.01 of the Alabama Administrative Code]

20. So parents can just move their
child to a private school and
get a tax credit?
Not exactly. There are a number of things a parent must look at to determine whether they
will be eligible for a tax credit.
If a child is zoned to attend a “failing” school for the coming school year, the parent has
the following choices to make:
(1) Is there a non-failing public school in the district to which the student can
transfer? If there is, there is no tax credit eligibility if the parent moves the child to private
school.
(2) Is there a non-failing public school in another district that will enroll the student?
If there is, there is no tax credit eligibility if the parent moves the child to private school.
If there are costs associated with moving the student to a non-failing public school,
either within the district or in another district, parents can claim the tax credit for
those eligible costs.

21. Does it matter which private
school a student attends?
A private, or non-public, school must agree to certain terms to be eligible to participate in
the AAA tax credit or scholarship option.
Therefore, for a parent to claim a tax credit, or for an SGO-awarded scholarship to be
used by a student, the non-public school must notify the Alabama
Department of Revenue (ADOR) of its intent to participate.
ADOR publishes and regularly updates the list of non-public participating schools on its
website.

22. Can parents who already have
enrolled their children in
private school take the tax
credit?
No. Only parents of children who have been enrolled in a public school for at least one
semester, or 90 days, of the previous year are eligible to receive a tax credit.
The only exception to this is if the child is entering school for the first time in kindergarten.
[Section 810-3-60-.02 of the Alabama Administrative Code]

23. What if a family moves into a
"failing" school zone?
If a family makes a “bona fide” move into a “failing” school zone, the parent is eligible for
the tax credit.
The Alabama Department of Revenue defines “bona fide” move as:
The family must have moved its household furniture into the new physical residence
and all principal members of the family must reside at the new residence. Further,
the original residence should be closed, rented or disposed of and not used by the
family.
[Section 810-3-60-.03 of the Alabama Administrative Code]

24. How does a private school
become a participating
school?
The school must tell ADOR of its intent to meet guidelines, including but not limited to:
• Must have been in existence for three years,
• Must be accredited or satisfactorily answer questions regarding accreditation,
• Must agree to annually test students moving from “failing” schools and/or utilizing
scholarship funds from SGOs,
• Must report those test results to parents and to ADOR every year the student attends
the school and is in a grade requiring annual testing,
• Must report graduation rates to ADOR,
• Must not discriminate based on race, gender, religion, color, disability status, or
ethnicity of the student or of the student’s parent,
• Must conduct criminal background checks on employees and cannot discriminate in
hiring based on race, gender, religion, color, disability status, or ethnicity of the
employee,
• Must comply with safety and health codes applicable to non-public schools.

25. How does a parent know if
a participating non-public
school is a good school for
their child?
Parents cannot safely make the assumption that just because the school is private that it
is a better school.
Parents should ask questions and visit the school to determine whether the school is a
good fit for their child.
Many parents have never had the freedom to choose a school for their child, but rather
have accepted whatever school to which their child is zoned as an absolute.
With choice comes responsibility.

26. What kinds of questions
should a parent ask?
Parents should consider the areas of culture, cost, and the record of academic
success with other students.
You should visit the school when it is in session.
Most private schools will allow your child to “shadow” a student for a day, meaning that
your child will spend a few hours, or even a whole day in the school in order to allow your
child to get the feel of the school.
Brochures and videos are scripted materials that cannot always capture what is really
going on in the school.

27. How do I determine a school's
culture?
Culture includes safety of the students, supervision by adults, and expectations for
behavior for both students and parents.
You need to know how discipline is handled, and under what conditions your child could
be suspended or expelled.
The school should have a handbook with clearly written discipline policies.
• Look at the building and grounds. Are they neat and orderly?
• Are parents expected to participate in school events? If so, how much time are you
expected to devote to on-campus events?
• Does the school have a Parent Teacher Association (PTA) or Parent Teacher Organiza-tion
(PTO)?
• How are teachers made available to discuss concerns parents may have about their
child’s academic and behavioral concerns?
Visit the school when it is in session. Ask to look in on a classroom in a grade your
child will be entering. Do students look happy and engaged?

28. How do I determine cost?
If your child is eligible for an SGO scholarship, be aware that the SGO-awarded scholar-ship
may or may not cover all of the costs of the private school.
The AAA only requires the cost of annual testing to be covered by the SGO-awarded
scholarship.
Ask school officials include whether the SGO-awarded scholarship covers the
full cost of:
• Tuition,
• Transportation,
• School meals (breakfast and/or lunch),
• Uniforms,
• Textbooks, and
• After-school or extended day care.
Private schools often charge additional fees that you have not encountered in public
school. Ask for a full list of school fees.

29. How do I determine a school's
record of academic success?
Unlike public schools, private schools are not required to share information on test
scores or graduation rates or other measures of success with the general public.
You must ask specific questions:
• How long have your teachers been teaching this grade level?
• Do you provide tutoring and/or remediation at no cost if my child is behind or struggling
academically?
• What if my child is found to have a learning or other disability? What will you do to help
my child succeed?
• How do your students compare academically with students in other areas, including
state and national comparisons?
• How do you measure academic success?
• How do you award grades?
• How often will I receive progress reports and/or report cards?
• What criteria do you use to promote students from one grade to the next?
• If your child is older, how do you ensure students are prepared for employment or
college?

30. What if I determine the private
school I've enrolled my child
in with an SGO scholarship
isn't right for my child?
Again, with choice comes responsibility.
If you believe the school you have chosen to attend using an SGO-awarded scholarship
isn’t right for your child, you have a few choices:
• Work with school officials at the private school to improve the circumstances for
your child at the private school.
• Re-enroll your child in the public school to which he is zoned,
• Transfer to another non-public participating school using the remaining SGO
scholarship dollars. Your child’s scholarship is transferrable.
Be mindful of the disruption moving your child in the middle of a school year can
create. But you, as your child’s parent, should consider all of your options.

31. What is the flexibility option
given to public schools?
This is perhaps the least talked-about portion of the AAA, and one that holds a lot of
promise for public schools who choose to be innovative in serving the students in their dis-tricts.
Flexibility to be innovative in program offerings has been available to districts since 2010,
but it wasn’t until the passage of the AAA that districts could ask for budgetary flexibility.
Budgetary flexibility means that school districts can seek approval from the State
Superintendent of Education to use money that may be earmarked for expenditures
related to implementing an innovative program to better serve the students in their local
school district and meet the needs expressed by the local community.
In return for flexibility, school officials agree to additional measures of accountability for the
success of the innovative program.

32. What are some examples of
flexibility that have been
approved?
The ALSDE refers to flexibility contracts as Innovation Zone applications and approvals.
Here is the ALSDE’s page containing all of the information and links about the Innovation
Zone.
Here is the Alabama State Department of Education’s (ALSDE) web page with all of the
flexibility contracts that have been approved.
Examples include increasing time available for teachers to collaborate and plan through
allotting more time for Physical Education but for fewer days per week (Boaz Middle
School), implementing an intern/job-shadowing program for students to work with profes-sionals
in their geographic area (Vestavia Hills High School), and building a program to
allow students with challenges to continue with school and graduate with a high school
diploma (Calhoun County PASS program).

33. How can we get more school
districts interested in creating
Innovation Zone programs?
At this point, only 12 of Alabama’s school districts have received approval for their
Innovation Zone proposals.
It is unclear why so few districts have made these proposals, but as with most new
offerings, it could be that no one in the district is aware of the possibilities.
So take the time to contact your school officials and ask them if they are aware of the
nearly limitless possibilities afforded under the Flexibility portion of the AAA.
Until budgetary flexibility was granted under the AAA, school officials may have been
limited by available funds. That limit no longer exists.
For more information about the Flexibility option, read this.

34. This is the end.
For now.
You now know the basic parts of the Alabama Accountability Act.
It is likely to change and grow, expand and contract, based on the experience of and the
desire of the folks who make the laws.
The best decisions are made when the public has the information it needs to engage in
the discussion.
As the state’s policymakers and lawmakers consider and reconsider the various parts of
the AAA, you now have a foundation of information you need to be part of the discussion.
The numbers and the details will change, so stay tuned to the Alabama School
Connection for updates.
Click here for the four-part series written to explain the AAA in more detail.
Please send any questions you have about this set of questions and answers to
asc(at)alabamaschoolconnection.org.