David Safier by David Safier I don't have time this morning to go into details about today's Star editorial, GEICO donation a boon to tax credit program. Maybe this afternoon. But I can't let it go completely. The Star editorial says GEICO's $8 million 100%-reimbursed-by-the-state tuition tax credit is a wonderful thing, as is the entire tuition … Read more
by David Safier Big news from last night's TUSD Board meeting. Those 7 books that were banned from classrooms when the Mexican American Studies program was disbanded have been approved as supplementary materials. Hicks and Stegeman voted against the approval, natch, but the other 3 board members hold the majority. A note: Three Sonorans' David … Read more
by David Safier This morning I posted about the $8 million tax credit donation GEICO made to Arizona Leadership Foundation a Student Tuition Organization (STO) that gives out vouchers for private school tuition. I also noted that GEICO will get the entire $8 million taken off its tax bill, leaving the taxpayers stuck with $8 … Read more
by David Safier For anyone interested in the financial well being of the for-profit, online-school corporation K12 Inc. (local school, Arizona Virtual Academy), after the stock plummeted 40% two weeks ago, it made a feeble attempt at recovery from its $17.60 low — it climbed all the way back to $19.01 — but today it … Read more
by David Safier
The Star has a story this morning that makes GEICO sound like the good guys for donating $8 million so poor kids can go to private school. The story is factually accurate and wildly misleading. Here's what the story should have said.
GEICO used the state law that allows corporations to get 100% tax credits for money they give to School Tuition Organizations (STO). That money will be distributed by the STO to pay for student tuitions to private schools. So GEICO paid $8 million up front and will have all of it deducted from whatever taxes it owes the state. Cost to GEICO: zero. Cost to Arizona taxpayers: $8 million.
The STO that got the money, Arizona Leadership Foundation, is making out very well on the deal because it gets to keep 10% of tuition tax credit donations to pay for overhead. That comes to $800,000 in overhead — $800,000 taxpayers will pay, since, as I said earlier, GEICO will get 100% of its money back. In the research I've done on STOs, I see no indication that it will cost the Foundation almost a million dollars to collect the money, then distribute it to the students. The money has already been given. That was easy. Now parents have to apply for the funds. The STO will assess the applications, then give the money to the private schools chosen by students whose applications it accepts. That's not an $800,000 operation.