Lawmakers consider expanding school tax credit deduction
PHOENIX -- Arizonans may soon be able to divert more of what they owe in income taxes to instead help students attend private and parochial schools.
On a 37-19 margin, the state House on Thursday approved creation of an entirely new program to provide a dollar-for-dollar tax credit for donations to organizations that provide scholarships to help students who do not want to go to public schools. The Senate already has approved a similar version of SB 1047.
The new program would be in addition to an existing credit that provides a tax credit of up to $503 (cq) for donations to scholarship organizations. In 2010, the most recent figure available, the credits -- the amount not paid to the state treasury -- was $43.2 million.
Sen. Rick Murphy, R-Glendale, said he is not happy that the amount of money donated under that program has not kept pace with the requests by students to get financial help to attend private and parochial schools. But Gov. Jan Brewer vetoed a prior effort to increase the amount individuals could donate, saying the state could not afford further losses.
This new plan comes with a twist: The scholarships would be available only to those who initially switch from public schools. He figures that ultimately will save the state money,
Legislative budget analysts figure the state pays about $5,000 a year in aid to public schools for each student.
But they were less sure of the prediction of savings by having students switch. They said in a report that 800 students would have to leave public schools to make up for the anticipated loss of tax revenues.
A separate provision of the legislation eases the requirements for schools that want to accept scholarships for students.
One of those eliminates the mandate that schools annually test their students using a standardized examination and publish an aggregate of the test scores. That requirement remains for public and charter schools.
But proponents said that requirement is unnecessary since parents retain the ultimate power to pull their students out of a private school if they believe the youngster is not being properly educated.