Ehrhart’s bill helps non-profits (including, though undisclosed, his own)
By JIM WALLS
June 1, 2011 — Rep. Earl Ehrhart knows how to take care of his own. Ehrhart — CEO of a non-profit group that helps donors get state tax credits for gifts to religious schools — sponsored a new law in 2011 that raises limits on those credits and eases restrictions on how contributions may be spent.
The Cobb County lawmaker’s role with the Georgia Christian Schools Scholarship Fund is disclosed on its web site and its corporate registration. But Ehrhart did not list the organization or his affiliation with it, as required by state law, on financial disclosures filed in 2009 and 2010 with the State Ethics Commission.
As Atlanta Unfiltered reported in November, Ehrhart has also failed to disclose a separate consulting business, known as ECS, that collected $40,000 to advise a coalition of arts advocacy groups pushing a bill in the General Assembly. A legislative committee later dismissed an ethics complaint regarding the deal.
Ehrhart did not respond over the last week to voicemail and e-mail messages seeking comment.
Student Scholarship Organizations (SSOs), created under a 2008 law also sponsored by Ehrhart, may solicit donations for scholarships for students in K-12 private schools. Donors receive a credit that is capped at $1,000 for individuals, $2,500 for married couples filing jointly and, for corporations, at 75 percent of their tax liability.
Until this year, state law required the Department of Revenue to stop awarding the tax credits once they totaled $50 million in a given year. Now, under House Bill 325, that ceiling will rise annually with the cost of living; the Georgia Budget and Policy Institute projects that change will cost Georgia an additional $6.1 million in lost tax revenue over the next two years, and as much as $9 million a year by 2018.
Critics complain that HB 325 also keeps the public in the dark about how the money is spent, The Atlanta Journal-Constitution reports. State revenue officials say they are preparing rules that will attempt to reconcile apparently conflicting language in the law about what information may be made public.
Another 2011 change in the law gives SSOs more latitude in how they may spend their money. SSOs still must spend at least 90 percent of donations that are intended for scholarships. but the organizations now may seek other donations with no such restriction.
Ehrhart collected no pay as CEO of the Georgia Christian Schools Scholarship Fund, tax records for 2009 show. “Representative Ehrhart has not received a penny’s compensation,” said Jonathan Crumly, the fund’s chief legal officer.
Crumly has, though. The fund paid his law firm $52,000 for legal services in 2009, the most recent year for which records are available. That figure could grow now that SSOs are allowed to raise money for non-scholarship purposes.
Crumly acknowledged that he and lawyers for other SSOs helped draft the 2011 bill, which Gov. Nathan Deal signed into law May 11.
Two years earlier, then-Gov. Sonny Perdue, vetoed a similar bill also sponsored by Ehrhart. Perdue favored tougher guidelines and oversight for the tax credits than Ehrhart’s bill provided.
Then-Rep. Jim Cole, one of the governor’s floor leaders, introduced an alternative bill in 2009 that would have:
- Required that SSOs spend 97 percent of all donations on scholarships,
- Barred officers of SSOs from association with schools receiving funds from the program,
- Required background check on officers of SSOs,
- Barred corporations from receiving the tax credit,
- Disqualified pre-K students from the program, and
- Required standardized testing of students receiving the scholarships.
Significantly, Perdue’s plan would only have allowed scholarships for low-income students who qualified for free or reduced-price lunches at school. The governor’s bill went nowhere, never even being assigned to a committee.
Today, no income-eligibility requirements apply to the scholarships. Language in the 2011 bill would have required SSOs to report how many scholarships went to low-income students; the Senate Finance Committee removed that requirement before passage.