Arizona measure would expand tax funds for private schools

Arizona lawmakers are considering legislation to quadruple the size of a program that allows people to use tax money for private school tuition for foster children and students with disabilities.

The measure is the latest proposed expansion of Arizona’s wide-ranging programs to aid private and religious schools with public money.

Republicans advanced the measure out of a Senate committee in a party-line vote Jan. 20, saying the program creates more choices for parents who couldn’t otherwise afford private school tuition.

"Having that ability to move around to different schools to find the best fit is what we should be focused on, and how do we get every child in the environment so they can succeed," said Sen. David Livingston, a Peoria Republican who sponsored the legislation, SB1041.

Democrats said the state shouldn’t be further siphoning money from the state treasury that could be used to pay for public schools, especially as Republican Gov. Doug Ducey pushes for a $600 million-per-year tax cut.

"Our public schools are really struggling with all of what they need to do to survive given the pandemic, and this is not the time to expand a tax credit that goes to private schools," said Sen. Kirsten Engel, a Democrat from Tucson.

Arizona has four tax credits that allow for the diversion of tax money from the state’s treasury to cover private school tuition. Instead of paying their tax bill, individuals or businesses can donate to "school tuition organizations" that hand out scholarships for private school students. Donors can recommend that their money benefit a particular child but can’t require it.

The scholarships can fund up to 90% of what the state would have spent to educate the child in a public school.

For all four credits, just under $205 million was diverted from the treasury in the 2019 fiscal year, the most recent year for which the Arizona Department of Revenue has published data.

Livingston’s bill would expand the cap on the smallest of the four tax credits, which applies to any child who has ever been in foster care or ever had a disability. There are no income limits.

The cost is currently capped at $5 million. His bill would take the cap to $20 million over the next three years.

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