Arizona Eagletarian

Arizona Eagletarian

Sunday, January 18, 2015

When does 2 + 2 = $100 million/year?

Just a few days ago, the Arizona Eagletarian reported on two conspicuous tax break bills  (HB2152/2153) new House Appropriations Chair Justin Olson (R-LD25/Mesa) filed. Those bills have the potential to enormously expand the Steve Yarbrough Memorial School Tuition Tax Credit.
Olson's STO bills will deplete the general fund by expanding the STO (private/religious school voucher donation tax credit)...
Last evening, the Arizona Republic posted a story about local for-profit Grand Canyon University's campus renovations and then some.
But the biggest overhaul is quietly underway in talks with lawyers, bankers and prospective benefactors who could help convert the publicly traded company into a non-profit organization more like traditional colleges.
Reporter Ronald J. Hansen explains that GCU executives expect the conversion to dramatically enrich THEMSELVES.
From a business standpoint, there are millions of reasons to shift to a non-profit. 
The company presumably no longer would pay many of the taxes that currently cut into its bottom line, from federal and state income taxes to property and sales taxes. The company has sought a property tax rate cut from the Legislature that could lock in a permanently lower rate but could keep it paying those taxes even as a non-profit. It also could qualify for tax-exempt financing and lower postal rates.
GCU reported paying $56 million in taxes in 2013, according to its financial records. The company has lowered its tax bills by making tax-deductible contributions to Arizona private-school tuition organizations. But Mueller said the current growth rates mean the company will hit $100 million in taxes in a few years. (emphasis added) [...]
Mueller would stand to collect at least $31.7 million from the shares he already has at current valuation. Four other senior executives with the company would collectively take in at least $34 million from a deal at that price.
So, to recap:
  • GCU CEO Mueller would stand to collect at least $31.7 million.
  • Four other senior executives would also collect at least $34 million (aggregate).
  • GCU, in 2014, unsuccessfully sought special interest tax breaks from the state legislature.
  • GCU, according to Hansen's story, has lowered its tax bills by contributing to Yarbrough's slush fund (and/or others just like it).
  • House Approps chair Olson wants to give GCU (and EVERY other corporation owing income tax to Arizona) cart blanche to eliminate that tax burden by diverting general fund moneys -- preemptively -- to religious/private K-12 schools. 
Think of the possibilities. Grand Canyon contributes to Cathi Herrod's favorite schools. Those schools then provide a steady stream of new college students to GCU in perpetuity.

Folks, I don't have GCU's tax returns to analyze and I don't have tax analysis/data to use in order to make any kind of accurate estimate of the tax impact of these bills (HB2152/2153) but there's no limits placed on ANY of this activity. And this new effort to grant GCU and other corporations mega tax breaks will UNDERMINE our state's general fund and public K-12 school system if passed.

Last week, I heard reports that teachers and school boards contacted state lawmakers to raise hell about the civics bill, an unfunded mandate that still makes no sense to have opposed. That bill was minuscule compared to this situation.

Teachers, school boards and Democratic and sane Republican (I expect there are at least a few of them) lawmakers, here's the battle you need to engage.

The Alt-Fuels Debacle in 2000 could have been prevented if the press had been paying attention. 

THIS debacle can be prevented. 

Rise UP!

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Today it is a case of the grasshopper pitted against the elephant. But tomorrow the elephant will have its guts ripped out. Le Loi, Vietnamese emperor, 15th Century

2 comments:

  1. The Steve Yarbrough Personal Enrichment While Defunding Public Schools Tax Credit should be apposed at every level, but sadly, it won't be. To not put too fine of a point on it, Democrats and teachers seem determined to blow their wad on the rather harmless civics test when they should be focused on stopping this corporate theft from the taxpayers of Arizona.

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  2. Arizona EagletarianJanuary 18, 2015 at 9:45 PM

    They may have seemed that way a few days ago, but they'll get their act together on this issue. :)

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