State Capitol News
9:42 am
Tue February 9, 2010

House panel limits who can recieve private and parochial school scholarships

Phoenix, AZ – A 1997 law allows Arizonans to get a dollar-for-dollar income tax
credit for donations to organizations that provide these
scholarships. In 2008 that diverted more than $55 million away
from the treasury. The system has come under some scrutiny about
who benefits and whether some parents are gaming the system:
Since they can't make donations to help their own children, they
essentially trade with other parents, with each making
recommendations that the other's child should get the money --
recommendations that scholarship organizations can honor. Rep.
Tom Chabin sought to ban those recommendations and limit the
income of who can qualify.

(Very wealthy people who are sending their children to private
schools, no matter what, are getting the benefit of tax credits.)

But Rep. Rick Murphy said it's still a net positive for the
state.

(It's clear from the evidence that the scholarship tax credit is
budget positive for the state, that, on balance, that most of the
students who receive the scholarships would end up back in the
public schools if it were not for the scholarships.)

Murphy said that would cost taxpayers more than the $55 million
in tax credits. With only Republicans in support, the committee
approved some reporting and oversight changes, but rejected the
limits Chabin sought. For Arizona Public Radio this is Howard
Fischer.