Arizona taxpayers diverted more than $31.8 million of what they otherwise would have paid the state last year to organizations that help students attend private and parochial schools.
Figures released Tuesday show donations to these scholarship organizations increased 8.2 percent over 2003. That was from finding more donors, as the average contribution actually slipped slightly, to $499.
State law provides a dollarfor-dollar tax credit for donations to these private and parochial school scholarship organizations, up to $500 for individuals and $625 for married couples filing joint tax returns. In essence, the donations cost taxpayers nothing.
The tuition organization run by the Roman Catholic Diocese of Phoenix continued to be the major recipient of these donations in 2004 as it has since the program started in 1998. It collected more than $7.5 million from more than 14,000 donors.
It used the donations to give 5,786 scholarships to Catholic elementary and high schools.
Karen Shepard, executive director of the organization, acknowledged that contributions have slipped, though she does not know why. Shepard said efforts are under way to contact people who gave in 2003 but not last year to find out why.
By contrast, the Arizona Christian School Tuition Organization saw a 7.2 percent increase in donations last year, to nearly $7 million.
Steve Yarbrough, director of that organization, said the Christian schools that benefit have an interest in publicizing the tax credits, as donations to the group can be earmarked for specific schools.
State law does not permit parents to make donations for their own child’s tuition. But they can find sponsors — even parents of classmates — who can donate for that child.
Yarbrough said his organization takes "recommendations" from donors as to who gets the money but is not bound to follow them.
That’s not the case at the Arizona Scholarship Fund, which took in nearly $2.2 million last year. Director ChamBria Henderson said more than 40 percent of the scholarships awarded came from cash donated by people who agreed to "sponsor" a specific child at a private or parochial school.
The Arizona Supreme Court rebuffed legal challenges that claim the credits amount to an illegal subsidy of private and sectarian schools, something specifically prohibited by the state constitution. But the Arizona chapter of the American Civil Liberties Union continues to pursue efforts in federal court to void the credits.
A similar tax credit exists to help fund extracurricular activities at public schools, with a $200 limit for individuals and $250 for couples. Donations to those schools last year went up 11.6 percent to nearly $31 million.