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Corporate Tax Credit Survey

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Tax Credit Survey 

Corporate Tax-Credit Scholarships Helped Thousands of Students, Saved Millions of Dollars


Arizona STO Association News Release

October 7, 2008


PHOENIX—September marked the second anniversary of Arizona’s landmark corporate tuition tax-credit scholarship program. A new survey from the Arizona School Tuition Organization Association (ASTOA) reveals the program has put a private education within the financial reach of more than 2,000 Arizona schoolchildren from low- and middle-income families—in a fiscally responsible way.

Average corporate tax-credit scholarship recipients came from families with annual incomes of $28,458 in the 2006-07 school year and $35,533 during the 2007-08 school year.

Under the corporate tuition tax-credit scholarship program, businesses may claim state tax credits, up to a set annual cap, for contributions to school tuition organizations (STOs), non-profit organizations that raise money for private school scholarships. Only public school students or children entering kindergarten whose families meet specified income limits are eligible. The limit was $68,450 for the 2006-07 school year and $70,676 for the 2007-08 school year.

Fourteen of the 19 non-profit scholarship organizations, called school tuition organizations (STOs), participated in the ASTOA survey. Those STOs accounted for 97 percent of all scholarship donations distributed since the program’s inception in September 2006.

STOs participating in the corporate tuition tax-credit scholarship program are required by law to submit annual reports to Arizona Department of Revenue, including information about contributions received, scholarships awarded, and verification of a completed independent review of financial statements. The law, however, does not require participating STOs to include information about scholarship recipients’ annual family income.

“Making this information publicly available is integral to genuine accountability,” said ASTOA Executive Director Harry Miller. “That is why we will be conducting similar voluntary annual surveys from now on.”

Survey author, Dr. Vicki Murray, adds that Arizona’s corporate tuition tax-credit scholarship program is also fiscally responsible. “Because the public school expense of educating scholarship students exceeded the tax credits businesses received for their donations,” explained Dr. Murray. “The scholarship program expanded education options for students and saved about $5 million.”

In 2007, Arizona businesses received nearly $12 million in combined state tax credits for scholarship donations. Absent those contributions, the nearly 2,000 students using corporate tax-credit tuition scholarships to attend private schools would likely have to return to their previous public schools at an annual cost of more than $17 million.

The “Arizona School Tuition Organization Association Survey of Corporate Tuition Tax-Credit Scholarship Recipients’ Family Income: School Years 2006-07 and 2007-08” is available online at
Vicki E. Murray, Ph.D., is the ASTOA survey author and Education Studies Senior Policy Fellow at the Pacific Research Institute in Sacramento, California.