Arizona's First Vouchers: STOs
Many people have asked us — how has our classroom crisis gotten this bad? How have we gotten to the point where $200 million is diverted from public to private schools every single year in Arizona?
In this installment, we dig into the nation’s very first voucher program — School Tuition Organizations, or STO vouchers — passed right here in Arizona.
Hailed widely by school choice extremists as the future of educational options (or “school choice”), STO vouchers are dollar-for-dollar tax credits that benefit private schools without passing through the state Treasury at all, resulting in significantly less money for public schools.
In 1997, then-Governor Fife Symington signed into law a private tax credit law that would set the stage as Arizona’s first form of vouchers. At the time, the Joint Legislative Budget Committee (JLBC) estimated that the cost would be $4.5M per year. In 2019, the cost now tops $160 million per year, and 93% of these vouchers are used for religious schools.1
When Gov. Symington signed the law, it was touted by special interests as a tool to make private education more accessible to low-income families. Instead, STOs have grown into a lucrative business opportunity for some, and a system of subsidies that keep private education a privilege for those who can already afford it.
The STO program has grown by almost 4000% in 20 years. Arizona legislators have strategically and repeatedly expanded it, while several have personally profited from the organizations themselves.2
In the past 20 years, 18 other states have followed Arizona’s lead in establishing private-school tax credit programs. However — unlike Arizona — most of these other states require that the majority of funds go to low-income students, and many cap the programs at low figures, like $10M per year.
Even “school choice” boosters such as current AZ Supreme Court Justice Clint Bolick have soured on STO vouchers since their inception. Bolick, who co-founded the Institute for Justice in Washington, DC to support vouchers and who “defended them up to the Arizona Supreme Court,” has since made clear:
“It’s not a charitable purpose to contribute to your own child’s education,” said Bolick. “I support comprehensive school choice in Arizona, but we don’t have it. And it’s frustrating to see these programs manipulated to try to achieve goals they are not intended to achieve.”3
Bolick has also publicly denounced “swapping” scholarships, saying that this practice goes against the charitable intent of the program. Because parents cannot give a tax credit to an STO in their own child’s name, they frequently swap with other parents. Bolick also stated he was shocked to find out that the schools themselves were instructing parents on how to engage in this scholarship-swapping practice.
When even the architects admit their program isn’t working, it might be time to abandon the blueprint altogether.
Despite the obvious problems with Arizona’s first voucher program, profiteers and privatizers have continuously developed more and more ways to divert funding from public education, to devastating effect.
- NY Times: What Can Go Wrong With Tax Credit Vouchers https://www.nytimes.com/2017/03/02/upshot/arizona-shows-what-can-go-wrong-with-tax-credit-vouchers.html
- Private School Tax Credits Rife with Abuse https://www.eastvalleytribune.com/news/private-school-tax-credits-rife-with-abuse/article_7debd2e5-d000-5aed-b813-a0d252377755.htm
- AZ private school families cash in on state’s tax credit program https://www.azcentral.com/story/news/arizona/investigations/2015/07/26/private-school-families-arizona-tax-credit-program/30647833/
1 Arizona School Boards Association (2018)