Arizona Republican introduces bill that would create school voucher-like tax credit

PHOENIX – The Arizona Legislature is considering a bill that would create a tax credit for families with students who don’t go to public schools or receive ESA voucher funds.

Republican state Rep. Michele Peña, who introduced HB 4037, spoke in support of it during a committee hearing Tuesday morning.

“Arizona’s led the way on school choice, and this bill just continues the tradition,” she said.

Joseph Palomino, director of the Arizona Center for Economic Progress, a policy organization that focuses on tax codes, said the bill does not mention any guidelines for the credit although it would be connected to designated education funding.

“We talk a lot recently of concerns that ESA [Empowerment Scholarship Account] funds are being misused. Essentially, potentially this bill has no similar guardrails to make sure funds aren’t misused,” he said.

Tax credit bill would remove more money from public education system

The bill has similarities to the ESA program, which returns tax dollars to parents to spend on alternative education like private school tuition or homeschooling expenses. Palomino said removing more tax dollars from an already fragile public education system is not a good idea.

“When we think of taxes, we think of them as essentially contributions we make to our community even if we don’t necessarily benefit from [what is] being provided. So, roads, appropriations to certain communities, you may never use that road, you may never visit that community … but the idea is that our tax system’s not set up to be a pay-for-service,” he said.

The tax credit bill comes while an effort is underway for a ballot measure to put certain restrictions on the ESA program, including limiting school vouchers to families that earn under $150,000.

Palomino said Peña’s bill could be a way for wealthy families to collect the tax credit without a potential income cap getting in the way.

Funding for this journalism is made possible by the Arizona Local News Foundation.

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