Arizona’s general fund can no longer be the “cash cow” for private schools.
For nearly two decades, private school tax credits have existed within a system that lacks transparency and accountability. This has contributed to a growing funding problem facing Arizona’s public schools. At the same time, these private school tax credits are not helping the students they were designed to help. It will take legislative action to correct these issues.
The Arizona State Legislature created these private school tax credits and the organizations that manage them, called student tuition organizations (STO), almost 20 years ago to help financially disadvantaged students and students with special needs have access to more schools.
Today, there are fewer students attending private school than when the legislation was created, but more money is being spent on private school tuition. This is a significant flaw that House Democrats attempted to reform with proposed legislation that would have ensured taxpayer money goes to the students and families these programs were designed to help.
That effort was met with partisan resistance.
Another problem with STOs is that these organizations are allowed to keep 10 percent of the amount collected for administrative fees. More than $80 million has gone to administrative fees since 1998. Without reforms, that number will increase but yet again partisanship seemed to stymie attempts to cap these bloated fees at 5 percent.
These private school tax credits have experienced huge growth that could surpass $600 million. This is larger than the budget of all but four of the state’s agencies. Students, teachers and parents cannot wait any longer. What started out in 1997 as model legislation that would cost the general fund $4.5 million annually has now become known as a model to avoid.
According to the United States Census Bureau, Arizona ranks at the bottom for public education funding. The report also states that Arizona provides less state funding per student than any other state in the nation. The $3,018 per pupil provided in 2013 is just 53.8 percent of the national average. Arizona students deserve better. Our teachers deserve better, and the taxpayers of Arizona deserve better.
The current Arizona tax credit programs lack oversight, accountability and transparency. Figures from the Arizona Department of Revenue in 1998 indicate that more taxpayers have claimed tax credits on contributions made to scholarship organizations than these organizations reported.
If we are serious about public education funding in Arizona, and if we are serious about growing our economy, then we must take action now. Regardless of party affiliation, we must come together and demand that our legislators do the right thing.
In the past, House Democrats have proposed reforms to address these issues. These reforms were blocked in the Legislature, but many of my colleagues remain committed to promoting changes that will increase accountability and reduce the potential for abuse. Such policies will be a priority next legislative session.
Our state’s economic future requires an investment in public education and that means we must consider real reform to assure public education funding. Arizonans will take responsibility and demand that all Arizona students have access to a first-rate public education. Those interested in learning more or getting involved, please go to the Take Action tab at www.azhousedemocrats.com.
Original Arizona Republic Editorial
September 20, 2015