Original URL: http://www.azcentral.com/arizonarepublic/local/articles/1211edreport11.html
Tuition-aid program called flawed
Poor students not getting
enough help, group says
The Arizona Republic
Dec. 11, 2003 12:00
An Arizona law meant to give needy
public-school kids a chance to go to private schools is instead helping to pay
tuition for students already there, according to a study to be released today by
the Goldwater Institute.
The report recommends major changes to a program that has diverted more than $85
million in tax money from state coffers into private, mostly religious, school
The law allows a couple to subtract $625 from their state tax bill if they
donate that money to scholarship organizations that were created specifically to
collect and distribute the donations. The idea was to allow poor public-school
students to get the money they need for private schooling and save the state the
cost of educating them.
But the study shows the scholarship organizations gave most of the money to kids
already enrolled in private schools, largely because the groups operate without
oversight or restrictions.
Among the study's findings:
• Since 1998, the law has helped only about 2,000 kids move from public to
• A program designed to save the state money is costing millions in lost
revenue. The number of children moving from public to private schools would have
to triple before the state could break even, it concluded.
• As of 2002, 43 percent of all private-school students were each getting about
$1,000 from the scholarship funds generated by the tax credit.
Some parents report that they could not remain in private schools without help
from the scholarship fund, said the study's author, Carrie Lips Lukas, policy
director of the Independent Women's Forum, a Washington D.C.-based education
Despite the problems, Lukas said she supports continuing the program.
"But policymakers should seek new ways to give more low-income parents the
option to choose a school for their children," Lukas said.
The report's findings don't surprise Lucy Ranus, president of Arizona PTA, who
said the law never has lived up to its promises.
"It funnels public money into private schools," Ranus said. "There's no
The tax credit donations are collected by about 47 private organizations, called
School Tuition Organizations, which act as middlemen between donors and the
private schools, mostly religious.
For example, the Catholic Tuition Organization of Diocese of Phoenix and the
Arizona Christian School Tuition Organization together received more than $12
million in 2002 alone.
Not much is known about where the money goes, according to the report.
These groups never have been required to report to any state agency. Some
volunteer to make partial reports upon request by the state Department of
For the first time this year, a new law will require the STOs to report the
amount of contributions, the number of children receiving scholarships, the
amount of the scholarship and the names of the schools receiving the money.
However, the law includes no penalties for the organizations that don't report,
said Georganna Meyer, chief economist for the Arizona Department of Revenue. And
taxpayers making donations to organizations that don't report still will be
permitted to receive the tax credit, Meyer said.
Alex Molnar, who heads a team of Arizona State University researchers who have
reached similar conclusions about the law, said the state should collect more
data about who is benefiting from the money and if the program is worth
continuing at all.
"These are good recommendations and sensible recommendations given the current
program," Molnar said about the study.
But he said that scholarships never have been big enough to help poor kids
attend private schools and that private schools could never accommodate the
number of public-school kids who would need to switch to save the state money.
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