Lawmakers improving tuition tax credits - East Valley Tribune: Opinion

Lawmakers improving tuition tax credits

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Posted: Friday, December 11, 2009 1:07 pm | Updated: 2:26 am, Sat Oct 8, 2011.

Our View: We have always said the tuition tax credit program shouldn't be abolished or weakened, but strengthened with proper reforms to make the program work as originally intended a decade ago. What has been proposed so far likely won't go far enough to accomplish that, but it's definitely is a start in the right direction.

When searching for solutions to the challenges of life, the first step always is to acknowledge there are concerns that must be addressed.

So it has been heartening this fall to watch state lawmakers seriously consider the future of private school tuition tax credits in light of the various questions raised by media investigative reports including the Tribune’s "Rigged Privilege" series published in August. Republicans who control the Legislature could have simply ignored the reports and pretended absolutely nothing is wrong.

Instead, two separate legislative groups held hearings, a survey was taken of student tuition organizations that receive donations tied to the tax credits, and a professional analysis was developed on the possible overall savings for taxpayers.

The result of the educational process was imperfect, as a lack of independent, verifiable information left many blank spaces about how STOs operate and who benefits exactly from the individual tuition tax credit program. But a House committee offered some recommendations Thursday that could help to fill in those details and provide additional protections from future abuse.

The committee recommended that the Legislature consider requiring annual audits or outside financial reviews for STOs, and better reporting of STO activities to the state Department of Revenue. The committee also wants to incorporate existing federal laws into the state program to make it clear that tuition donations are to be charitable giving, not an improper pass-through to get the state to pay for a specific child’s private education.

The committee did reject suggestions to impose family income limits on who can receive tuition scholarships funded by tax credit donations. This seems reasonable, as the survey revealed most STOs already consider financial need when awarding scholarships.

However, the committee was wrong when it rejected suggestions to beef up state enforcement through dedicated funding and clearer penalties, and to stop STO owners from obtaining excess personal benefits. The intent of this program is to provide tuition scholarships for students unlikely to attend private school otherwise. Allowing any STO operator to line his own pockets, at the very least, damages the public’s confidence in the role and value of tuition tax credits.

In what seems like an odd development, the committee also recommended raising the donation limits to receive the tuition tax credits by 50 percent. However, supporters make a powerful argument that the program ultimately saves the state money by getting children into private schools at less expense than teaching them at public schools.

We have always said the tuition tax credit program shouldn’t be abolished or weakened, but strengthened with proper reforms to make the program work as originally intended a decade ago.

What has been proposed so far likely won’t go far enough to accomplish that. But this definitely is a start in the right direction.

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