Tempest in a Teapot

Goldwater Institute ^ | October 10, 2007 | Dr. Matthew Ladner

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Arizona Republic reporter Pat Kossan is writing a series on school choice program accountability, the most recent investigates a School Tuition Organization (STO). There is both more and less to this story than meets the eye.

The STO, the Arizona Scholarship Fund, used funds raised through Arizona's scholarship tax credit law to help mentally disabled adults attend K-12 level classes.

"We actually spoke to people at the Department of Revenue and the Attorney General's Office way back years ago, even before we started scholarshiping them, to find out if it was acceptable," the STO director told the Arizona Republic.

Those state officials called it a "gray area" and suggested further investigation. The STO director said she took that for a "green light." Now the Department of Revenue says the practice is "ridiculous."

Yes, charging ahead when the authorities call for more research was poor judgment on the part of the STO. But the state shouldn't refer to something as a gray area then change their tune when a reporter calls.

The substantive issue is a tempest in a teapot. The tax credit law doesn't specify an age limit for beneficiaries, and the public school system educates people with disabilities up to the age of 21. If there is a school helping mentally disabled adults with tax credit funds, color me unconcerned.

The most sensible statement in the story came from STO director Allen Nahrwold who said of the program, "It opens the doors to a private education for children who cannot afford it. We don't need any more rules and regulations."

True enough. But, the program does need at least a good bit of self-policing if it is to avoid burdensome state regulation.

It hasn't escaped my notice, for instance, that year after year a small number of STO provide scholarships to only one school. Not much gray area here; that is a clear violation of the statute.

Parental choice supporters should proactively self-police to protect the interests of children, donors, and the program itself. I believe this can be done among the scholarship groups themselves. But it will take a willingness to deal with problems decisively, including referring matters for legal action when necessary.

Dr. Matthew Ladner is vice president of research at the Goldwater Institute.