The Issue: Corporate Tuition Tax Credits

Published June 1, 2007

Of all Arizona’s attempts over the years to provide education options for poor students, the law allowing corporations to take a dollar-for-dollar credit on their taxes is the best-structured reform effort so far.

So why are education institutionalists fighting so hard against it in court?

Capped at a fund totaling $10 million, which can grow 20 percent per year until 2011, the tax credit program would help the children of lower-income families afford private school tuition. Only families earning no more than 185 percent of the income level allowing participation in free school lunch programs may participate.

Similar Threshold

Some critics have complained that the income threshold allows too many middle-income families to qualify. But the program’s maximum income threshold–$68,450 for a family of four–is in line with the income qualifications Gov. Janet Napolitano (D) is seeking for enrolling families in the state’s health insurance program for kids. Like quality health insurance, a quality education need not be the exclusive purview of the well-to-do.

Despite the indisputable value it provides students and their parents–that of real education options–the program’s opponents have gone to court against it and other education choice programs based on First Amendment arguments regarding separation of church and state. And despite losing their most recent court battle, the opponents insist they will continue battling education reform in federal and state appellate courts.

This March, a Maricopa County Superior Court judge ruled that the corporate tuition tax credit program was “legally indistinguishable” from existing tax credit programs, and so passes the same constitutional muster. That hasn’t dissuaded opponents–including the Arizona Education Association, the Arizona School Boards Association, People for the American Way, and the Arizona chapter of the American Civil Liberties Union–who contend that organizations directing the flow of funds to the private schools are overwhelmingly religious in nature.

Arizona State University law professor Paul Bender says his group will continue battling the program all the way to the Arizona Supreme Court, if necessary.

Failed Arguments

Their arguments have failed before. In Milwaukee and Cleveland (and now in Arizona), legal arguments based on issues of separation of church and state have stumbled on the critical fact that it is parents, not the state, who are making the decisions on where the kids go to school.

This myopic battle is anchored in fear. Its proponents fear that perfectly defensible programs for poor kids may metastasize into something bigger. But dread of what the future may hold is a mighty poor argument for denying a quality education to kids right now. It is not just the corporate tax credit they are fighting against. Last year, the state legislature approved, and Napolitano signed, bills creating education voucher programs for disabled kids and children in foster programs. Those programs also are tied up in court by many of the same opponents.

Voucher programs traditionally have had a tougher time in the courts than tax credit programs, so the future of these valuable tools may be more in doubt.

It would be a shame to see such programs flounder on the specious fear that if you give vouchers to disabled kids, or to kids at the rocky bottom of life’s well, that public education itself will crumble.

Simply put, it won’t. Education choice strengthens the underlying system. Someday, with luck, opponents of reform will figure that out.


This editorial originally appeared in the March 23 issue of The Arizona Republic. Reprinted with permission.