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Legislature approves tax credit for disabled and foster kids

The Legislature passed a bill May 27 to create a new scholarship program for disabled children and those in foster care – and, with that action, promptly wrapped up the second special session of the year.

One Republican, Sen. Carolyn Allen, voted against the measure, which lost its emergency clause after it failed to get 20 votes in the Senate and 40 votes in the House, the minimum support needed to retain its emergency language.

Still, the legislation will take effect about the time that schools open in fall, which supporters hope would be enough to avoid disrupting the instruction of students who were using voucher programs that were recently deemed unconstitutional by Arizona's courts.

Gov. Jan Brewer is expected to sign the bill as soon as it reaches her desk.

The measure, H2001, allows corporations and insurance companies to contribute to student-tuition organizations that provide scholarships to special-needs students. Their donations are capped at an aggregate $5 million a year.

Scholarships are limited to children with disabilities or in foster care. In the future, they also have to be "switchers," meaning students who are coming from a public to a private school.

Allen, a Republican from Scottsdale, said she remains unconvinced by arguments from her colleagues that the measure will allow the state to save money. She said it's simply an attempt to revive the voucher program, which she does not support.

"There is nothing but anecdotal evidence that it… saves money," she said. 

During a relatively short debate that also waded into the issue over the appearance of conflict of interest, Republicans beat back one Democratic amendment after another.

Democrats said they wanted to make the new scholarship program transparent and argued that there is no accountability in it.

Sen. Ken Cheuvront, a Democrat from Phoenix, tried to amend the bill so that students who use the scholarships would be tracked using the student accountability information system (SAIS) within the Arizona Department of Education.

Sen. Debbie McCune Davis, also a Democrat from Phoenix, offered another amendment to require a school tuition organization to report the name of corporations that donate to the program and the amount of donations.

But Sen. Ron Gould, a Lake Havasu Republican, said he has concerns about the privacy of corporations that donate to the program and added he fears "retaliation" against them. He did not explain who might want to retaliate against donors.

But the most passionate exchange occurred between senators Jonathan Paton, a Republican, and Linda Lopez, a Democrat. Both lawmakers are from Tucson.

Lopez had offered an amendment to remove the tax-exempt status of any school tuition organization that provides compensation to an elected official.

Paton said the amendment did not go far enough. He wanted it to include all non-profit organizations and not just STOs, and said some lawmakers work for non-profit groups that receive money from the state.

Arizona has a citizen-Legislature, which means lawmakers work part-time at the Capitol. Many have day jobs; some work for non-profit groups, while at least one runs a school tuition organization.

Democrats complained there is no oversight over school tuition organizations. Republicans argued back that parents understand their children's issues best – not a bureaucrat.

The Senate passed the bill by vote of 17-to-11.

The vote on the House was strictly partisan – 35 Republicans supported it and 25 Democrats balked at it.

"All of our exercise here has been a real diversion for the fiscal crisis at hand," said Rep. Tom Chabin, a Democrat from Flagstaff.

Rep. Steve Montenegro, a Republican from Litchfield Park, said he can't believe Democrats are "turning their backs" on disabled and foster kids.

"What a betrayal," he said, adding Democrats only care about helping those kids if they go to a public school.

Rep. Kyrsten Sinema, the House Assistant Minority Leader, said she takes "personal offense at any allegation that Democrats have betrayed children."

Sen. Thayer Verschoor, a Gilbert Republican who had pushed for the special session, said the children that would benefit from the legislation are some of the most vulnerable in the state.

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