NCPA - National Center for Policy Analysis

Arizona's Education Tax Credit

May 13, 1997

Arizona's political leaders have developed novel ways to reform and improve the state's public school system

  • A new law allows taxpayers there to take a $500 credit from their income taxes if they contribute to scholarship funds for private schools.
  • The contribution would not go for a specific child's tuition, but would make private schools more affordable to all parents.
  • It is estimated that taxpayers will save about $3,000 on the education of each child that transfers from a public to private school, and the law will likely result in the transfer of $50 million from the state treasury to private school scholarship funds.
  • Advocates of this approach to school reform also argue that it circumvents some of the political and constitutional challenges surrounding voucher plans.

Arizona taxpayers have in the past spent substantially to improve their schools, but the results are characterized as "an expensive failure."

  • Public school spending has increased over 164 percent in real dollars since 1970.
  • Public schools consume over 60 percent of the state's budget, but its high school dropout rate is now 36.4 percent -- increasing at the third-fastest rate in the country.
  • It costs taxpayers $6,100 a year to send just one child through the state's public schools.

A recent NBC News/Wall Street Journal poll shows that an overwhelming majority of Americans have lost faith in the public school system and want change.

  • Some 94 percent responded that they want significant change in the public education system.
  • Three-quarters believe that fixing schools is not a responsibility of the federal government.
  • Some 69 percent want parents to have more control over all aspects of education.

Source: Elie Pieprz (Americans for Tax Reform), "Arizona Leads the Way on School Reform," Investor's Business Daily, May 13, 1997.


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