Two Eye-Opening Articles About School Tax Credits

Soliciting tax credits so that wealthy kids can go to private, religious schools is hard work. Just look at poor Arizona senator Steve Yarbrough (R-Chandler) who is unable to stay awake at his day job.

Steve earns $24,000 as a state legislator and over $100,000 for his work with the Arizona Christian School Tuition Organization, a group which has siphoned away over $27 million on tax dollars for "poor" students. I wonder which job he takes more seriously.

The Arizona Republic has two must-read articles for anyone who wants to understand how the back-door voucher scheme known as "tuition tax credits" works here in Arizona.

First, when the average income of the donor is $141,000 and 83% of those receiving scholarships were already enrolled in private schools the program helps the wealthy, not the poor.

[Clint] Bolick said the worst abuse of the tax-credit scholarship donation is something he calls "the swap." Because parents cannot give a tax-credit donation to a scholarship organization in the name of their own child, two parents agree to donate, naming each other's child.

"It's not a charitable purpose to contribute to your own child's education," Bolick said. "I support comprehensive school choice in Arizona, but we don't have it. And it's frustrating to see these programs manipulated to try to achieve goals they are not intended to achieve."

The attorney wasn't sure "the swap" even existed until he attended a meeting to enroll his child in a private kindergarten. The school instructed parents on how to use the tax-credit swap.

"It was just shocking to me how open it was," Bolic said. "I don't think the school thought there was anything wrong with it. They think that's how the system works."

You can also "bank" tuition money ahead of time and have it waiting for your child once they are old enough to attend school.

In 2008, $55.3 million in tax money was diverted to private schools. This source of funding will not be touched in the current budget negotiations. Instead, Steve Yarbrough (who runs a School Tuition Organization) was able to expand the pool of donors via HB2288 this year.

The second article details many of the ethical problems for those associated with the collection agencies, known as School Tuition Organizations. While representative Steve Yarbrough's antics have been well documented over the years, it might be news to you that Congressman Jeff Flake and Corporation Commission Bob Stump have also run into problems shilling for this back-door voucher scheme.

When Jeff Flake was running for the Congress in 2000, he quit his post with the Goldwater Institute, a conservative think tank. He took a job with the Arizona School Choice Trust, a school-tuition organization. The Arizona School Choice Trust still shares several board members and staff with the Goldwater Institute.

After Flake came on board, Phoenix developer Ira Fulton, who was co-chairing Flake's campaign, gave a tax-exempt donation of $50,000 that helped pay Flake's $72,000 consulting fee. Critics cried foul, accusing Flake of picking up a campaign contribution without exceeding campaign-contribution limits.

Odd that a person so devoted to ending "pork" and "ear marks" at the federal level gives them the thumbs up at the state level.