Senate votes to expand tax donations to private, parochial schools
PHOENIX -- State senators voted Tuesday to let Arizonans divert even more of what they owe in taxes to instead help send children to private and parochial schools.
And they rejected anything to link that help to family income.
The voice vote came over the objections of some Democrats who questioned the idea of taking funds that would otherwise wind up in the state treasury and instead use them to pay tuition and fees at these private schools.
Sen. Rick Murphy, R-Glendale, said the legislation simply provides more choices for more parents.
He also rejected the claim that system undermines the state treasury. Murphy said the amount of the average scholarship financed by these tax credits is far less than what Arizona provides for each student attending public school.
A 1997 law allow Arizonans to get a dollar-for-dollar credit on what they owe the state in income taxes for money they donate to organizations which provide the scholarships for private and parochial schools.
Individuals have been able to divert up to $500 a year or double that for couples. In the 2009 tax year -- the most recent numbers available -- Arizonans diverted more than $50.8 million in individual income taxes to the scholarship organizations.
SB 1312 would boost the allowable credit to $750, again, with twice that amount for married couples.
Senate Minority Leader David Schapira, D-Tempe, said the system hardly amounts to charitable contributions.
First, he noted, every dollar provided comes back to the donor in a tax refund. And second, the law permits donors to make "recommendations' to scholarship organizations on which student should benefit, though the group is not legally obligated to honor that request.
"If you have a friend who's kid wants some money, and you write them and check and get the money back, that's not charity,' Schapira said. "It's a loan.'
Schapira said if the state insists on keeping the program -- and even expanding it -- there should be some limits. He proposed a new requirement that allows the funds to go only to those who meet certain income requirements.
Under his plan, that would put the cutoff for a family of three at about $62,700 a year.
Murphy objected, saying that a hard and fast income cap does not take into account all the things that determine whether a family is truly financially needy.
"You could have somebody who is above that level who has some dire financial circumstances, health issues in the family,' he said. Anyway, Murphy continued, he sees no problem with providing the help even to those who are "well off' so they can send their children to private or parochial schools.
"The taxpayers already pay for all of the education dollars for lots and lots of rich families,' he said.
"They do it through the public school system,' Murphy continued. "And there's no reason that we should differentiate in this particular case.'
He said the system saves money, pegging the average credit at $1,800 a year, versus about $5,000 a year in state aid for children in public schools.
Murphy acknowledged that some of the students who get these scholarships are students whose parents would send them go to private or parochial school anyway. But he said that the program saves money even if only half the youngsters who get the help moved from public schools.
The measure needs a final roll-call vote before going to the House.