Steve Yarbrough is president of the Arizona State Senate. He has used his official position to promote tuition tax credits that channel $100 million a year in vouchers to private and religious schools in the state. Arizona allows taxpayers who donate money to non-profit voucher-granting organizations to claim a dollar-for-dollar credit on their state taxes. The organizations then allocate the donated funds to students so they can pay tuition at the private and religious schools.
The Arizona Christian School Tuition Organization (ACSTO) is one of the largest voucher-granting groups. From 2010 to 2014 ACSTO received $72.9 million in tax-deductible donations and the group legally kept 10% for “overhead costs.”
According to a New York Times investigation, Senator Yarbrough personally profits from the tax credit voucher scheme. As the executive director of ACSTO he was paid $125,000 in 2014 and received a car worth $16,000 in 2012. On forms submitted to the I.R.S., Yarbrough claimed he worked an average of 40 hours a week for ACSTO, in addition to all the time he works as President of the Arizona State Senate.
The Times reports that ACSTO also paid a private for-profit company called HY Processing $636,000 in 2014, and millions of dollars over the last decade, for “data entry, computer hardware, customer service, information processing, award notifications and related personnel expenses.” Yarbrough and his wife are part owners of the company. Yarbrough also makes an additional $52,000 a year as ACSTO’s landlord.
The scam has worked so well that Republicans in the state legislature are pushing a new expanded voucher give away. Empowerment Scholarship Accounts allow parents to take money that should go directly to local public schools and use it for private-school tuition, homeschooling, tutoring, therapy, and other supposedly “education-related expenses.” However, a state audit found misspent money and spotty oversight. Yarbrough dismissed the report calling the amount not “an awful lot of money.”
Yarbrough’s financial interest in tax credit vouchers was first exposed in 2009 when The East Valley Tribune discovered widespread abuse in Arizona’s tax credit program. In some cases, parents recommended that their donations fund vouchers for friends and neighbor, who then returned the favor. This trade-off has since been banned.
According to the Tucson Weekly, “Arizona’s ongoing tuition tax credit scam was well documented back in 2009 courtesy of some terrific investigative reporting, and it continues to come up in our media now and again. Nothing has changed — what else is new in Arizona?”
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