The “donation saves the school” story, and the back story

by David Safier

I had to read the article 3 times before I could put all the pieces in place. This isn't a hit on the reporter, Emily Gersema of the Republic. She includes all the necessary details. But the ins and outs of the story are so complex, it's tough to digest it all.

So I'm going to break the story down in a different, non-reportorial way to highlight what I think are the important issues.

The headline reads, Insurance firm saves the day for private Gilbert school. The short version is, an insurance company made a $400,000 donation to keep a private school open which serves students with a variety of learning disabilities.

The story becomes more complicated when you know the "donation" is a corporate tax credit, part of Philadelphia Insurance Companies' $850,000 tax credit donation. That means the entire amount will be deducted from the company's Arizona taxes.

So the longer story is, Arizona taxpayers just made a back door voucher donation of $850,000 to private schools, $400,000 of it going to one school, Lauren's Institute For Education (LIFE) Academy in Gilbert.

Under the corporate tuition tax law, a corporation can give as much as it wants — no upper limit — and get it back so long as it owes that much in state taxes. The only limit is, no more than a total of $5 million can go into this specific fund. As soon as that level is reached, no more corporations can donate.

The longer-longer story is, this specific tax credit was created this spring after the Arizona Supreme Court decided that a state voucher program for foster children and students with disabilities was unconstitutional. This back door voucher is the replacement for the front door voucher the AZ Supremes got rid of.

The state's voucher program for foster children and children with disabilities was the Republican elephant's voucher trunk in the educational tent, which conservatives hoped would be followed by the rest of the body. This was a first step to make taxpayer funded vouchers for private schools a major part of the Arizona educational landscape.

It's the old "widows and orphans" trick. What kind of monster, the Republicans cried whenever the voucher law was questioned, would deny anything to widows and orphans, or in this case, foster children and children with disabilities? It's a ruse, of course. The conservatives don't give a damn about these kids. When it comes to social services funding, they make Scrooge look like a philanthropist. But they hoped once this program became established, it would be easier to slide in other vouchers. "What's your problem? We already have vouchers on the books." And vouchers are something conservatives really, really care about.

The last part of the story is that the $400,000 covers the tuition of 23 students. That's about $20,000 per student, which is almost 3 times the normal per student allotment at public schools.

Special needs kids take lots of staff and support, so that $20,000 figure is not a ridiculous number. Public schools also get extra funding for special needs students. But my understanding is — and I'm not sure on this, so I will be happy to be corrected — public schools would get less total funding for each of these students than this. I've been told every special needs student costs a public school considerably more than the reimbursement from the state. If this is true, the back door voucher we taxpayers are furnishing for these students is more expensive than the amount that would follow these same students to a public school.

A question I can't answer is, are these 23 students significantly better off at the LIFE Academy than they would be at a public school in the Gilbert area? And if so, would $400,000 a year put into a special facility in a Gilbert public school serve a similar purpose? Anecdotes about how happy one kid is or how well another kid is doing — which are always dragged out by supporters of programs — won't answer that question.