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Tax breaks for school supplies

By Howard Fischer

Phoenix – Federal law provides a deduction of up to $250 for teachers who purchase classroom supplies out of their own pocket. But a deduction only decreases the person's taxable income. So a teacher in the 28 percent tax bracket who takes that full $250 deduction reduces his or her income by only $70. The measure going through the state Senate would provide a $250 state tax credit. So for every dollar spent on things ranging from crayons and pencils to computers and software, the teacher's actual state tax liability would drop a dollar. Sen. Dean Martin said it's a good way to help repay teachers for those out-of-pocket expenses. Arizona Education Association President John Wright agrees that teachers are, in fact, using their own money for classroom supplies. But Wright said that, in the long run, the credit is not good for teachers -- or for education.

(If we accept that, then we no longer have an argument to make about improving funding to make sure we have necessary supplies. Our opponents will simply say, hey, you get a tax credit for those supplies. We've taken care of that. The debate about really good school funding policy ends as soon as we accept second best.)

Wright said the real answer is for the Legislature to properly fund schools so teachers don't have to spend their own cash for supplies. Martin said that may be true. But he said that, given the political reality, at least at this point, teachers should accept the victories they can get.

(In a perfect world, in the ultimate utopia, teachers wouldn't have to spend a dime out of their own pockets. Until we get to that point, this is a way to help address that problem.)

Martin said there's another reason that individual tax credits make more sense than more education funding: Simplicity and efficiency.

(Under this system, the way we've set this up, because we're paying them back through the tax system, it doesn't cost us anything to administer it. They're already getting a refund. We're going to increase the refund by whatever they spend out of pocket. This allows us to take every dollar and put it into the classroom.)

By contrast, Martin said there have been other programs, like a voter-approved measure to hike teacher salaries, where the cash goes to the school districts and they keep a certain portion for administrative
costs. Legislative budget staffers say if every kindergarten through 12th grade teacher takes advantage of the full credit, the lost tax revenues to the state would top $13 million a year. The measure now goes to the full Senate. In Phoenix, for Arizona Public Radio this is Howard Fischer.