Budget plan blows up

By Howard Fischer/ Capitol Media Services
Published/Last Modified on Thursday, May 3, 2007 2:29 PM MDT


PHOENIX - A bipartisan Senate deal for a $10.6 billion budget blew up late Wednesday over last-minute efforts by some Republicans to divert more tax dollars to send youngsters to private and parochial schools.


The plan would give individuals until April 15 each year to make donations to organizations which provide scholarships for students to attend these schools. More to the point, it would allow those donations to be credited to the prior calendar year.

It also would allow companies to set up payroll deduction plans for the credits, permitting individuals to take a small amount out of each check rather than having to come up with the entire amount at once.

The moves financially are significant because money contributed to the scholarship plans results in a dollar-for-dollar credit against state income taxes owed. Individuals can divert up to $500 a year; that figure is double for couples filing jointly.

Jeanine L'Ecuyer, press aide to Gov. Janet Napolitano, said that would undermine state revenues.

"We will have more people use it than use it now,'' she said.

More than $42 million in tax credits was claimed in 2005; there are no figures yet for 2006.

L'Ecuyer said the state Department of Revenue is trying to compute how much more would be claimed in credits if Republicans ease donation rules.

Republicans and their supporters acknowledge they are trying to boost contributions.

Ron Johnson, lobbyist for the Arizona Catholic Conference, said some people cannot afford to make a single large donation by Dec. 31 knowing they will not get it back as a tax credit for several months.

The Catholic Church has a particular interest in the issue: Th scholarship organizations it runs for its diocesan schools are among the biggest recipients of donations through the tax credits.

But Democratic lawmakers say that isn't part of the deal for a $10.6 billion spending plan for the coming year. "We have a negotiated budget,'' said Senate Minority Leader Marsha Arzberger, D-Willcox.

Some Republicans agree. Sen. Carolyn Allen, R-Scottsdale, who never has supported these tax credits, said she agreed to the budget because it did not include expansion of the program.

She said Senate Majority Whip John Huppenthal, R-Chandler, is trying to shove this through at the last minute. "He thinks that he can bully the rest of us,'' Allen said.

Huppenthal, however, said that deal announced Tuesday was not final. "It's still open and still subject to negotiation,'' he said.

The proposal is the latest effort by supporters of private and parochial schools to boost the amount available for scholarships.

Last year lawmakers agreed to allow up to $10 million in overall tax credits for donations by corporations, a figure that automatically increased this year to $12 million.

Napolitano said her objections to making it easier for individuals to make donations goes beyond the financial loss to the state. She said these schools do not have the same regulations as public schools, including who they can hire as teachers.

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