After a week’s worth of headlines, a committee was appointed to look into the situation. After a short time, the committee made some changes that disallowed the specific practices noted above, but left plenty of room for things to continue virtually as they were. In 2010-11, the combined taxpayer and corporate tax credits exceeded $43,000,000.
The net effect, some poor and under-served do now attend private school, and lots of well-to-do and rich parents manage to get most of their child’s private school tuition paid through tax credit donations from others. I don’t blame people for doing that, the loophole is there and it’s legal. However, once the loophole was pointed out, legislators didn’t close it; they didn’t want to close it.
Most rich and well-to-do people, whose children attend private school, vote, enjoy that benefit and wish to keep the privilege. So, the legislature put a new face on the problem, but left the loopholes.
If you run an STO, you get to keep 10% of the donations for your efforts in running the business. So, say for example, that you are influential, have many well-to-do friends, you are a lawyer, and also happen to be a legislator, and you get folks and corporations to make tax deductible donations to the tune of $8,000,000, that leaves you $800,000 minus the expenses of giving the money away. That would leave a nice tidy little profit even if you were a poor business man. Oh, and this year, that same legislator sponsored a bill to double the tax credit donation limit for private school tuition for individuals and corporations. The bill also reversed most of the restrictions that were placed on the STOs after the expose.
To no one’s surprise, the bill passed quickly, through both Arizona’s House and Senate, and the governor quickly signed it into law.
So, our lawyer legislator now gets to accept more donations from wealthy parents so their kids can go to private school free or at least at a much reduced cost. And, as the eligible tax credit amount was doubled, we can only guess what his profit may be now.
A number of months ago, The Arizona Republic printed an editorial about this situation titled, “Senators Conflict of Interest Astounds.” A quote from that editorial: “There is no act of lawmaking at the state Capitol that is more self-serving than (Senator Steve, District 21) Yarbrough’s cushy arrangement with his legislating cronies. But they remain utterly deaf to criticism.”
This legislation, SB 1047, passed quickly along party lines with only Russ Jones, R-Yuma, who lost in the August 28 primary, voting in opposition on the Republican side. This vividly illustrates the self-serving, greedy nature of many legislators, the favoritism shown the wealthy and the connected, and the disregard for the needs of our under-served children.
Effective leaders do the right thing; they stand up to be counted when the going gets tough. You don’t pass laws just because you can; you pass them only for great purpose, for common cause and with common sense. Is there any doubt our legislature is broken?