Arizona has more than 30 non‐profit education organizations that give tuition scholarships to students to attend private schools. Any taxpayer who writes a check to fund those scholarships can receive a dollar‐for‐dollar tax credit worth up to $500 against their income tax come April 15. (Joint filers can receive a tax credit for up to $625.) The trick to getting the maximum tax benefit on your next tax return is to write that check by December 31.
Last year, taxpayers donated more than $17 million which funded nearly 15,000 scholarships for students across the state. A survey of the 34 non‐profit organizations that distribute scholarships found that the overwhelming majority of the scholarships—approximately 80 percent—were awarded to children on the basis of financial need. The average scholarship was worth about $850.
One of the unique aspects of the scholarship tax credit is that taxpayers can support organizations that reflect their values. Indeed, the scholarship organizations vary greatly in their missions. Some are designed to support children who attend parochial schools, like the Arizona Christian School Tuition Organization. Others, like the Foundation for Montessori Scholarships, provide scholarships to support certain instructional methods. A few, like the Arizona School Choice Trust, have no particular affiliation, providing scholarships to needy children across the state. (Potential donors can view a menu of different organizations to choose from online at www.azschoolchoice.org/orgs.htm.)
Why should you donate? The better question may be, why not? Research shows that scholarship programs like this one benefit students. For example, a study released last year by Harvard University found that black students receiving private scholarships in Ohio, New York, and Washington, D.C., scored significantly higher on tests than their peers who remained in public schools. At least 10 independent studies have found benefits to children in similar school choice programs.
The benefits of the scholarship tax credit aren’t reserved only for the scholarship recipients. Taxpayers also benefit. When students use scholarships to transfer out of public schools, they also leave the state ledger. Estimates show the tax credit is already fiscally neutral, and a recent Cato Institute study estimates the program will save Arizona taxpayers millions over the coming years.
The real value of the scholarship tax credit, of course, doesn’t show up in the state’s budget numbers. Its fundamental value is difficult to quantify. For some children, a scholarship means the difference between a lifetime of learning and one of crippling illiteracy. The recent National Assessment of Educational Progress found that one out of three Arizona eighth‐graders hadn’t mastered basic math skills. One‐in‐four couldn’t read. The scholarship tax credit gives Arizonans the opportunity to send children to better schools. Last year, with only one in fifty taxpayers participating, the tax credit brought educational choice to 15,000 students. Just imagine if one in ten participated. That would raise more than 75,000 scholarships—enough to give one out of twelve children across the state a scholarship.
Arizona taxpayers have a unique opportunity. No other state in the union gives taxpayers the chance to use their tax dollars to give a needy child a scholarship. Take advantage of it. Grab your checkbook and make a donation. If you’ve already done so, tell your neighbor. Tell them it’s their yearly chance to give a gift that can change someone’s life.
Not bad for the price of a stamp.