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Waveyard developers seek more time A3 Mesa • WHERE LOCAL NEWS IS FIRST Winner of the Pulitzer Prize for Local Reporting EastValleyTribune.com >> Online every day. In print Wednesday, Friday and Sunday for FREE! INSIDE TODAY’S A Tribune investigation into Arizona’s Private RIGGED Schools Tax Credit Program PRIVILEGE SPORTS Fitzgerald pushes himself to keep improving, AA4 ENTERTAINMENT Museum showcases legacy of Chicano THOMAS BOGGAN, TRIBUNE creativity, AA8 The offi ce of the Arizona Scholarship Fund in Mesa. Today’s Tomorrow’s weather: weather: High 110, High 110, INSIDE TODAY’S TRIBUNE, A4-A10 WEDNESDAY, AUG. 5 FRIDAY, AUG. 7 Low 81 Low 81 THE FIX: The tuition tax credits law was supposed to HOW-TO GUIDE: Many private PERKS: Executives at two of Sunny Sunny revolutionize school choice for disadvantaged children. Instead schools teach parents how to skirt Arizona’s largest scholarship it fostered a rigged system that keeps private education a the law by lining up donors for charities are using income tax INSIDE TODAY’S TRIBUNE privilege for the already privileged. PAGE A4 their children. donations to enrich themselves. This section Take 2 NO OVERSIGHT: The state has no way of ensuring that PLOT TWIST: The tale of Maricopa ALTERED VISION: Twelve years Today’s quick take, A2 Sports, AA2 Local news, A3-27 Entertainment, AA8 $55 million a year in tax credits really goes toward scholarships County Schoolhouse Foundation ago, Trent Franks envisioned a Bulletin Board, A17 Theater, AA10 for private school students as the law intended. PAGE A10 begins with criminal indictments statewide system to enable poor Wall Street Journal, A28 Television, AA11 and fraud but ends as an example kids to go to private schools. Most Obituaries, A33 Movies, AA12 OUR RESEARCH: Records, data, parents show how the system of tuition tax credits’ promise for of the charities that formed as a Go and Do, A20 Celebrities, AA15 PAGE A10 Nation & World, A31-33 Puzzles & Advice, AA14 works outside the courtroom and the statehouse fl oor. serving the underprivileged. result went in a different direction. Perspective, A34-36 Travel, AA13 Classifi ed, A37 Weather, AA15 MONDAY: A Freedom Communications Join reporters Ryan Gabrielson and Michelle Reese for a live Q&A on our Web site at 10 a.m. Newspaper © 2009 EVTRIB.COM TUESDAY: Get an early look at the second installment of Rigged Privilege. An edition of the East Valley Tribune ALSO: Databases that show how many donations each school tuition organization has received, the scholarships they have given, and enrollment fi gures by school. Vol. 1, No. 109 16319063 A4 • SUNDAY, AUGUST 2, 2009 • MESA TRIBUNE EastValleyTribune.com RIGGED PRIVILEGE A Tribune investigation into Arizona’s Private Schools Tax Credit Program “Even the poorest child now becomes royalty in the system. In the past, only wealthy parents could afford their children such an opportunity.” TRENT FRANKS AUTHOR OF THE PRIVATE SCHOOL TAX CREDIT LAW AND NOW A Private schoolU.S. CONGRESSMAN WROTE IN A 1999 COLUMN credits IN THE TRIBUNE rife with abuse By RYAN GABRIELSON and MICHELLE REESE TRIBUNE — nly God and the health of loved ones rank high- Oer with Beth and Doug Fitch than an elite edu- cation for their two boys. The $20,000-a-year cost is exorbitant, Beth said, even though the Fitches are both personal injury attorneys and own an Ahwatukee Foothills home valued at a half-mil- lion dollars, Maricopa County property records show. But the Fitches haven’t had to worry about the bill. Arizona has paid the price. The state’s Private School Tu- school administrators, school ition Tax Credits program cov- tuition organization executives, ers the cost of private education, tax experts and government of- often for children whose parents fi cials. could afford to pay it themselves The newspaper’s reporting — while allowing affl uent fami- provides the most complete ac- THOMAS BOGGAN, TRIBUNE lies to reduce the amount of in- count to date of whether tax STARTING YOUNG: The Arizona Scholarship Fund offers parents “savings accounts” to bank away come tax they pay into the state’s credits have torn down the eco- income tax donations starting the year they conceive their child. general fund. nomic barriers that block under- To date, Arizona’s main bank privileged children from private the state’s private schools hiked dents are educated in private of $100,000 a year. Married account has lost $350 million to classrooms, as lawmakers prom- tuition dramatically, pushing the classrooms than in 1996, com- couples with dependents — who private schools. The price tag ised. cost of private education further pared with more than 280,000 make the majority of these do- is growing as the state grapples The Tribune investigation from the grasp of middle- and additional students who entered nations — must earn at least with the most serious fi nancial found: low-income families. public schools. $41,000 a year to take full advan- crisis in its history, and people • An untold number of STOs, • Tax credits have failed to By design, Arizona’s tuition tage of a tax credit, now capped who depend on the general fund schools and parents are using increase minority students’ ac- tax credit program is unregu- at $500 for individual taxpayers — public school children, the the tax credits in ways that vio- cess to Arizona’s private schools. lated. No state agency has the and $1,000 for married couples disabled, the poor and the sick late federal tax laws governing Students at the schools receiving authority to prevent or penalize fi ling jointly. — face severe cuts in services. charitable donations. the most scholarship money re- even the most brazen miscon- Because most donors contrib- Under the program, taxpayers • Nearly two-thirds of all mained overwhelmingly white at duct. ute for specifi c students, even give money to nonprofi t charities STOs failed to spend 90 percent a time when the state’s Hispanic For instance, the state law some tax credit supporters ques- called school tuition organiza- of their donations on scholar- population boomed. specifi cally bars parents from tion whether the system as a tions, or STOs for short. STOs ships — as required by state law Lawmakers promised tax donating to an STO and claim- whole expands access to private give scholarships to children for — since 2003, the year the STOs credits would make private edu- ing a tax credit to pay their own classrooms. private school tuition, and the began fi ling annual reports with cation available to all Arizona child’s tuition. STOs need to “search their state provides donors a dollar- the state Department of Rev- families. Yet schools and parents violate souls,” said Clint Bolick, board for-dollar tax credit in exchange enue. “Even the poorest child now this prohibition with impunity, chairman of the Arizona School for their contribution. • Executives at two of the larg- becomes royalty in the system,” the Tribune has learned through Choice Trust, a scholarship char- The tax credit law, signed by est STOs have used tax credit Trent Franks, author of the pri- numerous interviews with those ity that focuses donations on low- Gov. Fife Symington in 1997, is donations to enrich themselves, vate school tax credit law and who use tax credits. income students. touted as a tool to make private buying luxury cars, real estate now a U.S. congressman, wrote Some schools give parents Bolick, also a constitutional education more accessible to and funding their own outside in a 1999 column in the Tribune. step-by-step instructions on how law expert at the Goldwater In- families who could not otherwise for-profi t businesses. “In the past, only wealthy par- to game the system by lining stitute, argues the tax credits are afford it. • A majority of tax credit do- ents could afford their children up other donors for their child. intended to benefi t students who Instead, it has fostered a nations are earmarked to give such an opportunity.” One private kindergarten even do not normally enroll in private rigged system that keeps private scholarships to students already His rhetoric never became re- pairs up parents to exchange schools. Too often, the income education a privilege for the al- enrolled in private schools, no ality. tax credit donations — an illegal tax donations do not fulfi ll that ready privileged. matter how much money their Private schools grew slightly quid-pro-quo transaction under mission. The Tribune reviewed thou- parents earn. Just seven of the during the tax credit era, though federal tax law. In fact, despite the political sands of pages of state and fed- state’s 55 STOs use fi nancial there is little evidence the sub- The tax credits inherently promises, the tax credits were eral tax records and analyzed need as the primary factor in de- sidies took signifi cant numbers benefi t affl uent families. never equipped to do so. private school enrollment data ciding who gets tuition money. of students out of public schools Research by the state revenue “I support universal school from the past 12 years. Reporters • Even as they took in mil- and off the taxpayer rolls. State- department found that tax credit — interviewed dozens of parents, lions of dollars in scholarships, wide, roughly 6,900 more stu- donors typically earned upwards CONTINUED ON A5 EastValleyTribune.com MESA TRIBUNE • SUNDAY, AUGUST 2, 2009 • A5 “I support universal school choice. And if we had a viable program to create it, I’d support it enthusiastically. This program was not designed to provide universal school choice.” CLINT BOLICK BOARD CHAIRMAN OF THE ARIZONA SCHOOL CHOICE TRUST, A SCHOLARSHIP CHARITY THAT FOCUSES DONATIONS ON LOW- INCOME STUDENTS, PICTURED IN HIS OFFICE THOMAS BOGGAN, TRIBUNE FROM PAGE A4 worthy of tax exemption due to plaining why a student merits on two college professors’ sala- Center in Kansas City, Mo.