Monday, December 14th, 2009...6:39 am
Conservatives Throwing Money at the Problem
Monday mornings I usually do a thing called “What was weak last week” where I sum up some stories from the past week that I missed out on commenting on for one reason or another.
I’ve only got one this morning that really begs for comment. You may remember that Democratic representatives were trying to put together a committee to study the way School Tuition Organizations use the tax-payer subsidized money that they receive. This was prompted by allegations against Steve Yarbrough, whose zeal on the issue seems to be inspired more than policy concerns. In an attempt to short circuit this, the House leadership appointed their own committee. The committee had only two Democrats that House leaders assumed would be quiet “no” votes. Lucky for us, they weren’t.
David Safier at Blog for Arizona has done a great job of covering the issues around STOs. There have been many problems with these organizations, the most important of which have been that some of these groups allow “earmarking” of donations, sometimes for the donor’s own children, and that the groups also act in the financial interest of their own leadership.
I spoke to Tom Chabin (who served on the committee with fellow Democrat Jack Brown) about what happened on the committee. He and Brown introduced proposals to end the earmarking, and it was rejected on a party line vote. They also introduced a proposal against allowing people to make donations targeted at their own children. That was rejected too. Bear in mind that this tax credit program supposedly exists to help poor children go to private school, but continuing this practice means that taxpayers are subsidizing the tuition for wealthy families. Also, a proposal that STO scholarships be means tested was rejected on, no surprise, a party line vote.
In the end the only recommended “earmarking” restrictions that were passed are already in federal law.
(Chabin wanted to make the point with me that several STO’s already have rules against earmarking. The STO’s run by the Tucson and Phoenix Dioceses and an STO for Jewish schools keep the donations separate from other decision making)
As for what is called “self dealing,” the business arrangements made by the directors of these STOs so that they personally benefit from the donations, the committee did next to nothing. Their recommendation was that the Department of Revenue audit the STO’s. Now, this committee was ad hoc and only making recommendations, so it may be unfair to ask where the money will come from to hire the auditors. However, it is difficult to see how the DOR will have the personnel to carry this out given the number of employees they have already had to layoff this year.
Oh, wait…here is the blockbuster recommendation they made:
Increase the tax credit for people who give to STO’s by 50%.
No word on how this will solve the problem with how these STO’s are being run. Unless, once again, our Republican friends are suggesting that lowering taxes for certain favored people will solve this problem by some sort of obscure magic that you learn by attending ALEC conferences. Because, in a time of historically large budget deficits, we need to give more tax credits. Tax cuts, after all, solve every problem from unemployment to international terrorism to male pattern baldness.
By the way, the increased tax credit would come from the general fund meaning, well, even less money for public schools. Maybe that’s the idea.
14 Comments
December 14th, 2009 at 9:24 am
Jack Brown and Tom Chabin “quiet ‘no’ votes?” You haven’t been paying attention. Jack Brown is quiet-spoken, but not quiet. Tom Chabin has been passionate and out-spoken on this issue from the day he took office. Speaker Adams showed courage and wisdom putting these two gentlemen on the committee. Both represented their “side” well. But in the end, it is a political discussion and the majority won. Elections have consequences.
December 14th, 2009 at 9:28 am
“Elections have consequences.” Hmm…I’ll remember that the next time I go to a teabagger rally.
December 14th, 2009 at 9:55 am
RonB-
Go back and read the post again. I said that they were anything but quiet.
And yes, the majority can do what they please, but they also are not immune from criticism when they make poor decisions.
December 14th, 2009 at 10:13 am
December 14th, 2009 at 10:30 am
Tedski,
My point was that House leaders were not assuming Jack Brown and Tom Chabin would be “quiet ‘no’ votes.” Your attempt to disparage House leaders was misguided.
And, of course, what are or are not “poor decisions” depends on where on the political spectrum you find yourself. From my view the committee was correct. Committee member Andy Biggs pointed out that Tom’s own comments made the case that for every child attending non-public school was a savings to the state. So what’s the education lobby’s argument? If parents chose to educate their children in a non-public school, and it saves the state (read that: taxpayer) money, why would you oppose that? Or is this really about more government control of our lives that the left seems they can’t get enough of? Why would the AEA, Democrats, and other’s opposed to school choice be against saving taxpayer money and allowing parents to chose where their child is educated?
December 14th, 2009 at 10:57 am
Close all them socialist gubment schools with union teachers who are brainwarshing our kids to warship the kenyan messiah!
December 14th, 2009 at 11:26 am
RonB-
Why do you think the taxpayers should continue to subsidize the people that run these STO’s and the tuitions of students whose parents could otherwise afford to send them to these schools?
Increasing a tax credit for a select few people doesn’t save the majority of the taxpayers money. It indicates a lack of serious thought to the problems with the management of the STO’s. The whole tax credit issue is a smoke screen so that people on your side can pretend they are doing something for education. News flash: even with the STO’s and charter schools, the vast majority of parents still send their kids to public schools, and will for the forseeable future. It’s time for folks on your side of the aisle to admit that and make sure that our schools are funded adequately.
December 14th, 2009 at 11:56 am
Tedski,
I believe you have missed some of the points I’m trying to make. I’ll try to do better. Taxpayers are NOT subsidizing STOs, the parents that chose to use STOs, nor the children use the scholarships. In fact, that’s the whole point. Students chosing to go to non-”gubment” schools SAVE taxpayers money. It costs less to educate a student in a non-”gubment” school. I resent your accusation that as a proponent of school choice, I’m only pretending to do something about education. All of my children have attended and are attending public schools. Our state constitution mandates that public schools are properly funded. Unfortunately, the constitution doesn’t clearly mandate that public schools be managed properly. Public schools are here to stay; so are private schools and school choice. The evidence is overwhelming that private schools (and most charter schools) can educate students more effectively and efficiently (better and cheaper). Why does the left oppose that?
December 14th, 2009 at 12:13 pm
Ron B:
The evidence is overwhelming that private schools (and most charter schools) can educate students more effectively and efficiently (better and cheaper).
What evidence? The Goldwater Institute commissioned a study by Strategic Vision that supposedly showed this to be true but Nate Silver, David Safier and a number of other people (including me) have shown that the whole study was itself fabricated.
Show me some REAL data, OK?
December 14th, 2009 at 2:53 pm
RonB:
“Gubment”…what the hell, dude?
Spin it anyway you like, Mr. Giggy, but the AZ tax payers ARE subsidizing STO directors’ salaries, cars, rent, “processing companies”. When directors take the 10% off the top of ANY amount contributed to their STO by someone who is about to receive a dollar-for-dollar CREDIT from the state general fund, then YES! The tax payers ARE subsidizing that 10% going into the pockets of STO directors.
And when one of the BIGGEST legislative supporters is also the director of THE #1 STO in the state and paid AZ Corp. Commissioner Bob Stump approx $60k of that 10% collected to educate a child so that Stump could “fundraise” for a corporate tax credit STO prior to Stump running for Corp Commission…well, it appears like a guy who was running for a job looking over corporations was out hustling money from those same organizations at the behest of a pretty influential legislator.
I don’t know…maybe this is how it all works. But if I had donated my tax credit to this guy, I’d be a little pissed that some of my money was going into a campaign chest, and not into a kid’s education.
December 14th, 2009 at 5:00 pm
Private schools could not handle the amount of children that public schools educate even if we shut down the entire public school system tomorrow nor could they handle it in the days before the public school system. Why else do you think we have that system?
December 14th, 2009 at 6:51 pm
Ron B
If you read the exposes in the Tribune and the Republic you would have seen that 2/3 of the students are already in private schools or would have been in private schools regardless of the vouchers. I would like to know how it is okay with you that Mr. Yarborough opened a processing company and charged his STO $425,000 for a job that was outsourced for $26,000 just a year earlier?
You see, you are making an argument for vouchers and this, for the time being, is about welfare for the wealthy.
December 14th, 2009 at 10:02 pm
So where’s my childless curmudgeon tax credit? I have no problem whatsoever with paying taxes to fund public education, as the AZ Constitution mandates, and is my duty as someone who benefits from the commons. But when rich people start to think they should get a special break to send little Madison and Shelby to prep school, I start to think I shouldn’t have to subsidize that endeavor. Are Madison and Shelby going to help me in my old age? I rather doubt it, as I suspect Madison and Shelby will follow in their parents’ footsteps in demanding both estate tax and capital gains cuts.
RonB, you say that STOs and tax credits SAVE taxpayers’ money. I say that my lack of children SAVES taxpayers EVEN MORE! Where’s my tax credit?
December 15th, 2009 at 9:55 am
“I say that my lack of children SAVES taxpayers EVEN MORE! Where’s my tax credit?”
Donna…seriously rocks! That is the SINGLE best retort I’ve heard to that bullshit line re: the “savings power” of tax credits. Bow to the queen! And give her an effing credit! Or cake.