In 1997, Arizona was one of the first states in the country to pass legislation for the education tax credit program. The idea behind this program, or more deceptively, the idea that was sold to the community, was that this program would help improve the education of economically disadvantaged children. But, of course, this is not the case.
Under the education tax credit program, residents have the opportunity to earn a tax credit through two methods. First, they can directly donate money to a public school for activities outside of the classroom. Should a resident choose to do this, they can earn up to a $250 tax credit on their state taxes. However, if this amount isn't enough, a resident can choose the second option, which is to donate money towards a scholarship fund. This can help a public school student attend a parochial school or a private academy. For this second option, an individual can get a $500 tax credit, while a couple can earn $625 off of their state taxes.
While the tax credit sounds great, it has done little to help the poor community. And like many programs promising tax deductions, it has increasingly benefited wealthy individuals.
A recent study conducted by ASU investigated this program and revealed disturbing results as to where the money is going. According to the study, for every dollar spent, 81 cents went towards helping parents pay tuition for students already in private school, while only 19 cents went towards helping public school students obtain a private school education. This 19 cent leftover allowance only benefited 3,800 children, which is less than one percent of all the children in public school. Furthermore, over half of the money collected for public school activities went to the top 25% of the wealthiest school districts in the state.
How is this happening? The answer is easy — people are abusing the system.
The scam is that within the private school sector, wealthy individuals set up scholarship programs for the children of other wealthy parents in the school. By sponsoring each other, the community stays the same, and the rich continue to reap a tax benefit.
In the public school sector, much of the money donated towards activities goes to sponsor a parent's own child rather than a program. So, a poor kid who cannot afford to be in the school band is out of luck, while one of his wealthier classmates is sponsored by their own parents to stay in the band. The wealthy parents earn a tax credit in the meantime, taking more money away from the school.
While the outcome of the ASU study does force us to raise an eyebrow, they're not surprising. Anytime there is an attempt to move money away from public education and into the private sector, someone is going to pay the price — and usually, it will be those that cannot afford it.
What should be a program designed to bring out the humanitarian in taxpayers, instead demonstrates little more than the selfishness and greed of some Arizona residents. This program is clearly not benefiting the poor; it is benefiting the rich, and continues to widen the gap between the quality of education attained by people of wealthier classes.
Why should we care about this issue? Aside from humanitarian issues, we should also care because anything that has to do with tax dollars eventually trickles down to us. Arizona is in a great budget crisis. Accordingly, a tax credit system that costs the state millions of dollars only worsens the situation.
The state legislature needs to re-examine its current programs designed to benefit the poor because it is clear that not all of them are working. Unfortunately, without some sort of public outcry, the legislators will be less motivated towards change.
It is time for us to speak out for those students who aren't getting what they were promised.
Karen Engler is a graduate student in literature. Reach her at karen.engler@asu.edu
