The recent Arizona Town Hall on “Funding PreK–12 Education”, reported that, after “three days of serious and intense deliberations, [we] believe there is a state of emergency with respect to Arizona’s underfunding of our preK–12 education system, which requires urgent, decisive action.” This Town Hall effort was non-partisan, including a cross-section of diverse participants traveling from across the state to convene in Mesa. The intent of the effort was to discuss how best to fund preK–12 education now and in the future while improving the quality of education provided.
In their yet draft report, the Town Hall states in that, “Arizona already dedicates approximately 43% of the state’s general fund to K–12 education spending – good enough for a ranking of 11th nationally, as compared to average general fund spending of 35% among other states – the problem has more to do with the ”size of the pie" than a lack of relative support for preK–12 education spending.
That led me to notice an Arizona Daily Star story today titled, “Here’s how to use your tax credits to help public schools.” Although there isn’t a public school out there that doesn’t appreciate the tax credit dollars that come in, in the bigger picture they are as much as part of the problem, as they help. Firstly, they exacerbate inequities between private schools and public schools and between public schools themselves. Taxpayers can claim a five-fold greater tax credit for private schools (up to $1,089 per person versus only $200 for public schools.) Secondly, the tax credit monies given to private schools can be used for any purpose versus the limitation to extracurricular activities or character education programs that public schools must live with.
There is also the reality that wealthier communities are always capable of providing more funding support to their public schools than more disadvantaged communities. Yes, tax credit donations to schools are a one-for-one deduction of the state taxes you owe, but first you must earn enough to owe the taxes you’re looking to offset. And, oh by the way, “when the impact of state tax credits is combined with federal [and sometimes state] tax deductions, some [wealthier] taxpayers in nine states (Arizona included) can actually turn a profit by making these so-called ”donations“ to School Tuition Organizations (STOs) which funnel money to private schools. The non-profit, non-partisan Institute on Taxation and Economic Policy (ITEP) writes, ”The potential for wealthy individuals to turn a profit by claiming these credits is accelerating the diversion of critical resources away from public schools."
The problem is compounded when we look at it from the state-level, especially when one considers all the tax credits available. In 2014, about $287 million was redirected by individual taxpayers from the state treasury including these widely available ones:
* Qualifying Charitable Organizations = 105,500 redirected $28.2 million
* Private-school tuition organizations = 109,300 redirected $84 million
* Public-school extracurricular = 266,000 redirected $51 million
To exacerbate the problem, Governor Ducey signed SB 1216 into law in 2016, doubling the Qualifying Charitable Organization tax credit donation limits and separating out the Foster Care Credit so as to allow taxpayers to claim both. The public school tax credit limit was not increased.
Arizona also allows corporations to claim tax credits through School Tuition Organizations (STOs) and is in fact, only one of four states that allow businesses to claim a larger credit than individual taxpayers. These corporate tax credits are for low-income students (from families not exceeding an annual income of $82,996 for a family of four) and, for displaced/disadvantaged students. In 2008, three-fourths of Arizona companies paid only the minimum $50 in corporate taxes and with a 20% increase in cap allowed every year, the program is causing significant impact to the state’s general fund. In fact, the "low-income corporate tax credit alone is expected to grow to more than $250 million a year" by 2025. It should be no surprise that in 2016, the $67 million annual limit on corporate tax credit donations in Arizona for low-income students was met in a matter of hours. For FY2017/18, that limit was over $74.3 million and the one for disabled/displaced students was $5 million.
What makes matters worse, is the plethora of evidence from around the nation that these tax credit programs do not improve student outcomes. In Arizona, it is hard to tell since there is no requirement for the private and parochial schools receiving the dollars to be accountable or transparent.
What these programs do very successfully though, is drain our state coffers of critical funding, shrinking the size of the pie that funds our public schools. This, while lining the pockets of wealthier taxpayers and helping fund private and parochial schools and the STOs that funnel taxpayer dollars to them (like the one owned by AZ Senate President Steve Yarborough.)
This is NOT what fiscal responsibility looks like, people. Fiscal responsibility means that we get what we pay for. Fiscal responsibility means that when we say we want our public schools adequately funded, we actually invest sufficiently in them, then hold them accountable for delivering a good return on our investment.
Workarounds to adequate funding like tax credits, may make taxpayers feel like they are doing their part, but they are just that…workarounds. If we really want our children to have every opportunity to succeed and our teachers to make a living wage, we must do our part to provide (as per the Town Hall report), “dedicated, sustainable funding sources for Arizona’s pre-K–12 education system that meet the needs of schools, teachers, and students in an equitable manner. The state’s funding system should also be transparent and promote accountability.”
My mantra over the coming year will be “if we want different, we must vote different.” I know I’m preaching overwhelmingly to the choir, but for those already on-board with supporting our public, district schools, you have more work to do. Until you’ve done everything possible to fight back against the assault on our public, district schools, you haven’t done enough. Get to know which of our Legislators are pro-public education by checking out the Friends of ASBA Voting Record and research the legislative candidates running throughout our state (I previously wrote about my favorite three.)
Remember, it doesn’t so much matter what district they are in as it does that we get more pro-public education legislators in our Legislature. That’s because no matter what district they are in, even if you can’t vote for them, they can vote for you and the high-quality public education you want to see. Help these candidates by donating, volunteering, and promoting them on social media. Yes, the education privatizers may have the money, but we have the many. Let’s show them our power!