Credit for Kids, the 16-year-old tax credit that allows individuals to donate to schools and take $200 off of their tax bill, has fallen under scrutiny at the state level. The resulting legal opinions and policy changes have already affected many Payson students and vital extracurricular programs.
The Legislature set up the Credit for Kids program to provide money for extracurricular activities and character-building education. One legal challenge claims schools in the Phoenix area have used the money for things the law does not allow.
That court case spurred the Payson Unified School District to seek a legal opinion.
Administrators asked the district lawyer to weigh in on what the law says and how the district may use Credit for Kids funds. He interpreted the law more conservatively than the district, particularly as it related to travel costs.
“His response was, we need to use (the money) for trips that are competitive in nature,” said PUSD Business Manager Kathie Manning.
A quick read of the law clearly backs up his interpretation. However, the law also makes reference to the ability to spend the money on programs that come under the heading of “character education.”
Manning said right now, the district will leave it up to the school principals to decide what Credit for Kids dollars may cover. She said the district will have a meeting in the coming week to decide how to handle the issue.
Already, some extracurricular programs have felt the fallout from the lawyer’s opinion.
For instance, the high school and middle school bands have had to change plans.
PHS music teacher Sergio Beraun announced to the band parents at the last monthly meeting that the band had to cancel a trip to a music festival sponsored by Disney because the band couldn’t use Credit for Kids money for transportation to Disneyland.
Parents supported his suggestion that the band instead focus on saving money for next year’s marching season. The band is also struggling to raise money for uniforms and instruments.
Over at the middle school, however, music teacher Mike Buskirk does not have any competitions. He takes his students to play at different venues, such as the Arizona State Fair, Disneyland and other educational trips. As with other after-school activities, Buskirk previously used Credit for Kids money to cover transportation costs. The band gets no district money for its travel costs.
For now, said Manning, the district will only pay for buses to competitions. “We also plan on continuing trips that were already approved by the principals prior to the notification,” said Manning.
The Credit for Kids law clearly states that “in-state or out-of-state trips that are solely for competitive events” may be funded with donations that trigger the tax credit. That apparently leaves uncovered educational outings, like trips to Arizona State University to tour the electron microscopes or up to Flagstaff to watch the stars from the observatory.
Of course, the district remains free to use either district funds or money donated or raised that doesn’t qualify for the tax credit.
The sports programs are generally in better shape since they’re competitive. Sports programs can use Credit for Kids dollars for everything but coaches’ salaries, according to the interpretation. The tax credit dollars can pay for equipment, uniforms, transportation and tournament entrance fees.
But what about those character-building extracurricular programs such as Rim Country Middle School’s (RCMS) Outdoor Adventure Club or the Payson High School (PHS) Hike and Ski Club? Advocates say such programs teach character-building skills through hikes, rock climbing, caving and skiing.
The law says a character-building program must include: “Instruction in the definition and application of at least six of the following traits: truthfulness, responsibility, compassion, diligence, sincerity, trustworthiness, respect, attentiveness, obedience, orderliness, forgiveness, virtue, fairness, caring, citizenship and integrity.”
The law states the character-building program may use activities, mentors, teachers, lectures and demonstrations to give examples and help students retain the information on the character traits.
Scott Davidson, the RCMS teacher who runs the Outdoor Adventure Club, said he has a few students that can’t afford to pay the transportation costs of his trips without help. Credit for Kids was an easy way to solve that problem.
For instance, in the spring he takes his seventh grade class to raft down the river below the Glenn Canyon Dam where they learn about geology, hydro-power engineering, physics, and many of the character traits listed above. However, it’s clearly not a competitive event.
“It’s about $350 to go,” he said. Most of that cost goes to paying for two bus drivers, (the district will not allow bus drivers to be on a job more than 14 hours at a time), gas, insurance and bus maintenance costs, said the science teacher.
Yet the law also says the district can’t deny children a chance to perform such extracurricular activities simply because they cannot afford the cost.
The district does have some other options, said Manning.
Community members can donate to the program of their choice. They might not get a tax credit off their tax bill, but can still take a deduction from income tax.
Teachers can also turn activities into competitive programs.
Alternatively, the district could set aside money in the budget for these programs, with the approval of the school board.
However, critics of the misuse of Credit for Kids funding insist the program must change. For instance, an Arizona Republic series of stories detailed questionable use of the tax credit money in several Valley schools. One school was the Buckeye Union High School, which used Credit for Kids dollars for its prom. Another charter school in Gilbert used all its Credit for Kids dollars on technology in the classroom. However, the law says schools must spend the money on extracurricular activities, not classroom expenses. That provision was intended to prevent parents in rich school districts from providing better funded core academic programs through donations than parents could afford to support in poorer, rural districts like Payson.
The courts have ruled that huge differences in per-student funding based on property values in the district are unconstitutional.
In the end, even Manning and other school officials say the law remains unclear, but the district will have to scramble to adjust its policies to conform, without dropping valuable programs.