AG looking into Student Tuition Organizations

by David Safier

Michelle Reese at the East Valley Trib continues to be on top of the tuition tax credit/STO story. The latest:

The Arizona attorney general has sent letters to 19 of the state’s nonprofit school tuition organizations asking them to explain why they didn’t spend 90 percent of donations on scholarships for private school students as required by law.

The 90% figure is complicated by the difference between a calendar year and a school year. The STOs get a huge chunk of money the last few days of the year, and they most likely don't give it out until sometime the next year.

But Reese is all over that. Instead of looking at the STO scholarships year by year, she looked at them in a 5 year block, from 2003 to 2008. Using those figures,

. . .  the newspaper determined that two-thirds of the state’s STOs were out of compliance with the law over the past five years.

Let's hope the AG is diligent in looking at this. And let's hope the investigation doesn't stop there. One of the biggest questions is, however much the STOs hold back for administrative costs, are they spending the funds for legitimate purposes or feathering a few people's nests in violation of non profit rules?

[Note: the Trib article lists Michelle Reese and Sonu Munshi in the byline.]