LAURIE ROBERTS

Sen. Steve Yarbrough makes out like a ...legislator ... on tax-credit tuition program

Laurie Roberts
opinion columnist
State Sen. Steve Yarbrough, R-Chandler

It was pitched as a small tax-credit program to help poor and disabled students attend private school.

Eighteen years later, $140 million is now being diverted from the state treasury, most of it to pay private-school tuition for non-poor, non-disabled students.

It was pitched as a program that would expand school choice. But fewer students are attending private school now than when the tax-credit program began, yet more and more money is being siphoned from the state to pay the private school tuition tab.

This, Senate Majority Leader. Steve Yarbrough calls a triumph.

"It's been better and more successful than even those of us who were enthusiastic from the get-go imagined," the Chandler Republican told The Republic's Alia Beard Rau.

It hasn't been so bad for Yarbrough either.

Yarbrough's the guy behind most of the bills to expand Arizona's tax credits for private-school tuition. He's also the executive director of one of the state's largest- school-tuition organizations – non-profits that collect tax-credit donations then dole them out as private-school tuition scholarships.

In all, Yarbrough's Arizona Christian School Tuition Organization has siphoned more than $116 million from the state treasury via individual tax-credit donations since 1998, according to the non-profit's latest IRS filing, covering the 2013-14 school year.

ACSTO reports it has offered scholarships to more than 24,000 students. That's roughly $4,854 per student – or about $700 more than the state currently kicks in for a public-school education.

Not a bad deal for parents who want to send their kids to private school on the public's dime – many of whom Yarbrough acknowledges would likely send their kids to private school even without taxpayers' help.

Not a bad deal for Yarbrough either.

By law, STOs get to keep 10 percent of what they raise in tax-credit donations. This, to administer the program.

In 2013-14, Yarbrough's Arizona Christian School Tuition Organization collected roughly $17 million in tax-credit donations. That's a sweet $1.7 million for overhead.

Of that, Yarbrough collected nearly $146,000 in compensation, according to his latest IRS filing.

ACSTO reports it also paid an undisclosed amount to HY Processing to handle contributions and scholarship applications. HY is owned by Steven and Linda Yarbrough and their business partners, David and Stacy Harowitz, according to Corporation Commission records. (While he left the dollar figure blank in his 2014 filing, Yarbrough's STO paid HY Processing $560,710 in 2013 and $426,655 the previous year.)

Yarbrough's STO also paid $52,000 in rent. To Yarbrough. He owns the building, which also houses his law firm and another STO. School Choice Arizona doles out scholarships from corporate tax credits. Yarbrough sits on School Choice Arizona's board and collected $12,240 in rent, according to that non-profit's latest IRS filing.

If things continue as they are, look for ever more tax-credit expansions to come to benefit Yarb….oops, I mean to benefit Arizona's poor and disabled children.

Expansion efforts are a yearly thing at the Legislature, with a little help from Yarbrough. Why, in 2012, he sponsored the bill that doubled the size of the individual tax credit for private-school tuition.

Thus, doubling Yarbrough's potential source of income.

Did I mention that Yarbrough is chairman of the Senate Ethics Committee?

Lest you chastise the guy for his blatant conflict of interest in making buckets of money from legislation he drives into law, know this.

It isn't considered a blatant conflict of interest for Yarbrough to make buckets of money from legislation he drives into law. Or any conflict.

Only in Arizona, folks.