This is an RTS alert for SB1041 and SB1118, two student tuition organization (STO) bills that are in Ways and Means on March 10.
There are many different tax credits in support of STOs. SB1041 refers to tax credits for STO scholarships for displaced and disabled children. (Displaced children have been removed from their home and could be in foster care.) This STO is capped at $5 million in tax credits per year, and all of the tax credits are claimed each year. SB1041 would raise that cap by $5 million a year annually.￼ Businesses can buy tax credits from an STO, which turns that cash into scholarships for designated types of students to attend private schools.
This particular tax credit was reviewed by the Joint Legislative Income Tax Credit Review Committee in December 2019.￼ I served on that committee, and the testimony about this tax credit was a real eye-opener for both Republicans and Democrats. We learned the number of scholarships that were given in a previous year and received a confidential list of private and religious schools who benefitted. Unfortunately, there were many other data points that were not collected or reported like the *number of students* who received scholarships, what percentage of the students were disabled or displaced, and the distribution of scholarships across the state. We already know that 70 to 80% of the private schools in Arizona are in Maricopa County. This STO most likely serves primarily students in Maricopa County.
Why is there not more accountability for this STO tax credit? In the 2019 meeting, we were all surprised to learn that one scholarship does not equal one student. By asking questions, we learned that parents routinely apply for as many as four $5000 scholarships for each child per year. That is $20,000 per pupil to attend private or religious schools funded by tax credits. The State of Arizona should be paying for public education, not paying for private and religious education.￼ I am a “no” on both of these. Parents have choice. Some choices have hefty price tags. The state should not be expected to pay for private or religious education.
UPDATE: As of April 16, 2021, neither SB1041 nor SB1118 has not gotten out of House Rules. [Fingers crossed.]