Yarbrough doubles his salary on the taxpayers’ dime

by David Safier

An Arizona Republic editorial is as mad as I am about the money Rep. Steve Yarbrough will scoop up by writing legislation favoring his business. Courtesy of a bill he sponsored, he stands to double or triple his income.

Brewer signed Yarbrough's bill doubling the amount of tax credit dollars people can give to School Tuition Organizations (STOs) and get every penny back at tax time. It went from $500 per person ($1,000 per couple) to $1,000 per person ($2,000 per couple).

Here's how the system works, and why Yarbrough is making out like a bandit. People give their tax credit dollars to STOs, who pass it along to students to pay for private school tuition (the term of art for this fund transfer is "back door vouchers"). The thing is, the STOs get to keep 10% of the money they collect to cover administrative costs. What does an STO do to warrant its 10% cut? It takes in money, then gives it out to people who submit applications. That's a pretty simple business transaction. It doesn't take ten cents out of every dollar to do that.

Yarbrough makes a handsome salary as head of the Arizona Christian School Tuition Organization. Last I heard, he also drives a company car. He owns the space he rents to ACSTO. And he owns the data processing company (it's housed in the same space) which does what anyone handy with a computer could do using Excel and Quicken. Naturally, ACSTO pays the data processing company top dollar for its work.

I would say, if Yarbrough doubles the amount of money that comes into ACSTO, he stands to triple his personal income due to the economies of scale: the more business he does, the less it costs per unit.

The Arizona Republic's suggestion is, get rid of taxpayer-funded administrative overhead altogether.

It is time this pocket-stuffing stopped. There simply is no justifiable reason why any money provided by taxpayers should be used for any purpose other than what it was intended for: private-school tuition costs. Conceptually, we take no issue with the tuition scholarships. Educational choice is a wonderful thing.

But do it without lining pockets. The education organizations set up to disperse the funds should raise their own funds to pay their own expenses. If these scholarships are as wonderful as the advocates claim — and we believe they have value — then the sponsoring groups should have no problem raising the money necessary to dole the scholarships out.