Divided testimony as Senate Finance advances bill to opt Arizona into federal scholarship tax credit

The Senate Finance Committee considered Senate Bill 11‑42, a measure to opt Arizona into a federal tax credit for contributions to Scholarship‑Granting Organizations (SGOs) and to require the Arizona Department of Revenue to certify qualifying nonprofits beginning Jan. 1, 2027.

Sponsors and supporters — including Sally Henry of the Arizona School Tuition Organization Association and Gretchen Jacobs of the American Federation for Children — testified that the federal program would enable scholarships covering tutoring, special‑needs services, transportation, and technology, and that state participation would let Arizona students access federal credits rather than dollars leaving the state.

Opponents — including Beth Lewis (Safer Schools Arizona), Judith Simons (retired teacher), and Joseph Palomino (Arizona Center for Economic Progress) — argued that the program lacks accountability, could funnel substantial dollars to private schools and homeschooling without oversight, and would disproportionately benefit wealthier donors and students who already attend private schools. Simons cited past ballot results and said voters have rejected similar expansions.

Committee members pressed witnesses on nuts‑and‑bolts details: whether SGOs could award scholarships based on donor recommendation (testimony said federal rules prohibit student recommendations), how the per‑donor cap ($1,700) interacts with participation, and whether the program has an aggregate cap (witnesses said there is no aggregate cap beyond per‑donor limits). Senator Leach moved the bill and the committee returned SB 11‑42 with a due‑pass recommendation.

The testimony captured a distinct split between advocates emphasizing parental choice and supplemental services and critics stressing equity, accountability and the potential diversion of public funding.