Panel recommends tax credit continuation

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A panel of representatives and senators yesterday recommended the continuation of a dollar-for-dollar tax credit program for contributions to groups that provide scholarships to students in private and parochial schools.

The committee gave the program a favorable review although legislators on the panel admitted they can’t definitively prove — and quantify — whether the program is saving the state money.

The committee itself doesn’t have the authority to terminate or continue a tax credit. Its recommendations must be voted on by the full Legislature and signed by the governor, just like any other bill.

In 2010, nearly 63,000 individuals contributed to school tuition organizations (STOs), which provide scholarships and grants to students in private schools.

Their contributions totaled more than $43 million.

In theory, the program would not be costing the state if at least 8,150 students attended private schools directly because of STO scholarships that year.

But staffers from the Joint Legislative Budget Committee, the Legislature’s budget research arm, acknowledged it’s difficult to quantify what the exact savings are.

Democratic members of the panel hammered on this point during the hearing.

Noting his Catholic upbringing, Rep. Tom Chabin, D-Flagstaff, said in his time parents send their children to Catholic schools because they want this kind of education for their children. There were no STO scholarships then, he said.

“How many are enrolled (in private schools) because of the tax credit?” he asked. “It’s kind of hard to quantify what the savings really is.”

But Sen. Ron Gould, R-Lake Havasu City, said while he agrees that the information is hard to quantify, he personally knows of parents who would not have been able to send their kids to private schools without the tax credit program.

The debate is not novel.

Republicans, who are mostly supportive of the tax credit, have argued that it saves the state dollars and more importantly, it helps parents  choose what kind of education they want for their children.

But many Democrats argue that it siphons off money from public schools, exacerbating their financial difficulties.

Democrats are also wary of the program, which they view as a move toward “privatizing” education when that is a public responsibility.

Ariel Shoshan, a rabbi from the Valley, told lawmakers that the program is helping his community.

“Our children are getting the education that we believe in,” he said, adding he donates to STOs and his children benefit from the program.

He also credited the tax credit for the growth in his community, saying families have moved to Arizona because of it.

The panel also gave a favorable review to a tax credit program for contributions to support public schools’ extra-curricular activities, such as band and athletics. More than $48 million in tax credits were claimed last year.

Additionally, the panel concluded the Legislature should continue the tax credits for low-income families, for installing solar devices that are used in trade or business; and for donating to a fund that benefits military families.

But the panel said four other tax credits should be terminated: for installing solar water heater stub-outs and electric vehicle recharge outlets at home; for donating land where schools are built; for increasing employment in a military reuse zone; and for constructing an environmental technology manufacturing facility.