A Cautionary Tale

Arizona may be at, or near, the bottom in many education related statistics, but when it comes to a school choice friendly environment, we are #1. That’s why, when executive committee members of their state school boards associations got together last year in Oakland for the Pacific Region National School Boards Association meeting, the Arizona team shared their story of eroding legislative support (funding and supportive legislation) for our district schools as a cautionary tale.

It all began in Arizona with the Legislature’s authorization for charter schools in 1994 and of course, open enrollment so parents could choose to enroll their children in any public school in the state, not just in their district. This mattered because 1) it told parents they were free to look for greener grass elsewhere, versus watering the grass they had, and 2) all that mattered was their child’s education, the hell with the rest.

Arizona’s first charter school opened in 1995. Now 180,000 students attend about 550 charter schools in Arizona equating to 16% of the students and 30% of the public schools. In 2010 in fact, Arizona had the highest number of charter schools per capita in the nation. The competition created with district schools wasn’t all bad. Many district schools offer fuller curriculums with more specialty programs than they once did. But, for corporate reformers, that wasn’t enough.

The American Legislative Exchange Council (ALEC) ranks our state as #1 with regard to school choice policy. This should not surprise anyone, since ALEC has been aggressive in working with corporations and state lawmakers all over the country to create legislation favorable to school choice and the privatization of education. Likewise, the American Federation for Children (previously led by our new SecED, Betsy DeVos) has been very active in pushing school choice around the nation through both significant campaign contributions and strong arming of legislators.

These organizations and others with the same agenda, have enjoyed much success. When vouchers for private and parochial schools were first introduced in Arizona in 2009, the AZ Supreme Court deemed them unconstitutional since the state constitution (as most do) requires that “No public money or property shall be appropriated for or applied to any religious worship, exercise, or instruction, or the support of any religious establishment.” The Court stipulated though, “[t]here may well be ways of providing aid to these student populations without violating the constitution. School choice proponents such as the Center for Arizona Policy (CAP) jumped on that and according to their website, ”CAP and its attorneys were heavily involved in the drafting and development of this [Empowerment Scholarship Accounts or ESAs] program.” Then in 2013, the AZ Supreme Court, in Niehaus v. Huppenthal approved ESAs, (vouchers or Educational Subsidies for the Affluent as AZ’s 2016 Teacher of the Year calls them), saying that the fact the funding goes to the parent and the parent decides what to do with it, makes the program constitutional.

Initially, only students with disabilities were eligible for vouchers but the Arizona Legislature managed to expand ESAs each year to eight different categories including students living on tribal lands, wards of the state, military dependents, students from D or F rated district schools and more. Then, on April 6, 2017, the Legislature passed and the Governor signed, a law making all Arizona children eligible for vouchers. For now, there is both an annual cap of 5,500 and an overall cap of 30,000 by 2022. In addition, there is a by-grade implementation that staggers eligibility over several years.

With Arizona’s conservative and libertarian public-policy think tank, the Goldwater Institute, already promising donors they would eliminate the cap before the Governor even signed it into law, these speed bumps undoubtedly won’t be in place long. That’s because the end game for the corporate reformers and the lawmakers they’ve purchased is to commercialize our public schools. It doesn’t matter what innocuous name you give a voucher, it is still about siphoning taxpayer dollars away from our district schools, to private and parochial schools. And, vouchers aren’t the only way these tax dollars are siphoned away.

Remember I wrote that ALEC thinks Arizona is #1 in school choice policy? Well, that’s because we not only have open enrollment, charter schools, and Empowerment Scholarship Accounts, but also individual tax credits, School Tuition Organizations and the corporate tax credits that feed them. And yes, we even have legislators that have ownership of, or vested interests in, all of the above. But that discussion is for another day.

As for school tax credits, Arizona allows five separate types. There are three individual; one for public schools and two for private schools. The private school tax credit, begun in 1997, is now worth five times as much as the amount that can be claimed for public schools. Maybe that’s part of the reason why the program the legislative budget staff estimated would cost $4.5 million a year 20 years ago, topped $140 million in 2015 without including the $50 million in tax credits taken for public schools.

Tax credits were originally sold as a way to help special-needs and low-income students, but it hasn’t largely worked out that way. According to the AZ Republic, “Only about 3 percent of the money is designated specifically for special-needs students.“ As for the ”low-income” families, only 32% of the money went to them. Aside from the fact they don’t serve the most needy, tax credits divert funding away from the state coffers and in the case of district schools, give the taxpayers the impression they are doing their part to support public education when the reality is the funding isn’t really allowed for classroom expenses, but for extracurricular, fee-based activities. In the case of private schools, the tax revenue is diverted away from the general fund directly into private education.

Corporate tax credits are made to School Tuition Organizations (STOs) which are 501(c)(3) tax exempt organizations that must allocate at least 90% of their annual revenue to tuition awards for students to attend private and parochial schools. The two types of corporate tax credits allowed are one for corporate contributions for low-income students and another for displaced/disadvantaged students. The definition of “low income” though, is misleading. For these scholarships, a family of four with an annual income of $82,996, qualifies leading many to claim that the scholarships are going to families that could afford the private schools without the taxpayer welfare. Critics also say it is fairly impossible for the poor to benefit because even if they get a scholarship, they still have to come up with the rest of the tuition. Regardless of who else is benefiting from the tax credits, the general fund and therefore district schools and other critical programs and services are not. 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 by 2025 to grow to more than $250 million a year.”

In the end, one thing has been abundantly clear here in Arizona. The corporate reformers are dead set on commercializing our district schools. That’s why every legislative session, we public education advocates gear up for battle and “look for incoming.” And that’s why, one of our favorite phrases is “sine die” which literally means “without assigning a day for a further meeting or hearing”, but in layman’s terms, signifies the end of the legislative session. It is a very sad state of affairs that rather than counting on our Governor and GOP-led Legislature to do good for our one-plus million district school students, the best we can usually hope for is for them to do no harm. This year, with the full expansion of vouchers, they did tremendous harm that will be hard to recover from. A word to the wise…if you give them (corporate reformers) an inch, they will take a mile and stretch it out to 10. Stay focused and vigilant, this really is a war and the stakes couldn’t be higher.