Fri, Sep 05, 2008

Arizona / West

Governor to get her tuition tax credit bill

By Howard Fischer
Capitol Media Services
Tucson, Arizona | Published: 01.11.2006
PHOENIX — State lawmakers are giving Gov. Janet Napolitano a tuition tax credit bill the way she said she wanted it last year, essentially daring her to veto it.
On a voice vote Tuesday, the House of Representatives gave preliminary approval to letting corporations divert a combined $5 million a year in income taxes to organizations that provide scholarships to private and parochial schools.
Within hours, the Senate Finance Committee approved the same proposal, paving the way for a final bill to be on Napolitano's desk by the end of the first week of the new session.
Napolitano promised to sign such a bill last year, then vetoed it because the final version included only a review of the program after five years.
She wanted a "sunset" requirement that extension of the credits beyond 2010 would require a new legislative vote. That sunset is in the measures approved Tuesday.
"We made the changes she's requested," said Sen. Dean Martin, R-Phoenix. "I look forward to the governor's signature — or a very interesting (veto) letter."
And House Majority Leader Steve Tully, R-Phoenix, said the new bill will allow the governor to "live up to her parts of the agreement."
But an aide to Napolitano said Tuesday that the governor's promise has expired.
"That was part of last session's deal," said Jeanine L'Ecuyer. She said the governor will review the bill anew when it reaches her desk.
And two Democratic lawmakers — one who voted for the bill last year and one who did not — are predicting another veto, saying the bill has to be part of a new budget negotiation for next fiscal year.
Existing law allows individuals to divert up to $1,000 of what they owe in state income taxes to scholarship organizations. For 2004, the most recent figures available, the diversions equaled $31.8 million.
HB 2004 and SB 1060 would provide more cash for scholarships by giving a similar option to corporations. But there are some catches, including the $5 annual aggregate limit and a requirement that 90 percent of the funds go to students who meet income limits.
Martin said the legislation isn't part of a new budget negotiation, but a finishing touch on the current year.
Even if that's true, Sen. Jorge Garcia, D-Tucson, said it still doesn't comply with the original deal. He said Napolitano's commitment last year to sign the tax credits bill was part of an overall pact on several items, including reaching an accord over funding for English language instruction.
Martin countered the governor still reneged on the deal.
He said part of the tit-for-tat was that Republicans would agree to her demand to create a Phoenix branch of the University of Arizona College of Medicine. Yet Napolitano signed the portions of the budget she wanted rather than vetoing the entire package and starting over.