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August 27, 1999/15 Elul 5759, Vol. 51, No.47
Jewish groups increase efforts to use tax credits
CHRIS GARIFO
Staff Writer
Jewish agencies and schools are moving to take advantage of Arizona tax credits approved by the Legislature in 1997.
One credit allows up to $500 to be taken off a taxpayer's obligation for money donated to an authorized organization that provides scholarships to students attending private or religious schools. A $200 tax credit is also available for donations to agencies that assist Arizona's working poor.
The state Department of Revenue in December certified Jewish Family and Children's Service as an agency that helps the working poor. Gail Parin, JFCS president and CEO, said the agency has always provided such services, and noted that money raised due to the tax credit will help JFCS continue to provide counseling and other assistance to its 12,000 clients.
JFCS recently sent out letters seeking donations under the tax-credit law. Parin said it's too early to tell what sort of response JFCS will get because the credit is so new and many people still may not know about it.
"We have high hopes (about the credit)," Parin said. "We're hoping people will see what good can be done with their money and (that) they can direct where their money will be spent, rather than letting the state decide."
Parin said the credit could provide a much-needed boost to JFCS' fund-raising.
"Funding doesn't keep pace with growth (in demand)," Parin said. "We're always looking for new donors."
Parin said the number of clients JFCS helps each year increases by about 10 percent.
Parin suggested that one of the problems with the credit is the lack of knowledge among taxpayers about it.
Vince Perez, a spokesman for the state Department of Revenue, said the department does not advertise tax credits; it only administers them. He said that sometimes funding for promoting a new law will be included in the legislation that created it, but that funding wouldn't go to the revenue department. For example, he said, the Department of Economic Security ran newspaper advertisements about the charitable-contributions tax credit.
Perez said that for the 1998 tax year, unaudited figures through July 24 show there were 1,198 filers claiming a little more than $341,000 under the credit.
Perez said that as far as he knows, no advertising funds at all were provided for the school tuition organization (STO) tax credit.
To take advantage of that $500 credit, Jewish school tuition organizations have recently been established.
The Jewish Federation of Greater Phoenix has joined with four Jewish schools - the King David School, the Solel School, the Tri-City Jewish Community Center's day school and the proposed Jewish Community High School - to form the Jewish Community Day School Scholarship Fund, said Fred Zeidman, federation assistant executive director. Zeidman heads the federation's Commission on Jewish Continuity and Community.
Zeidman said articles of incorporation will be filed, and a board of directors will be formed that will include two representatives from each school plus a chairman selected by the federation. He said Randy Warner, an attorney who sits on the federation's board of directors, has accepted the chairmanship.
Zeidman said the organization will begin a marketing campaign in late October or early November. He said negotiations are under way now to add four more schools, but he declined to say which schools.
"Our goal is to have one STO to raise money for the whole community to attend Jewish schools and receive a Jewish education," Zeidman said.
Zeidman said schools of all denominations are welcome to take part in the organization, which makes it "the only transdenominational Jewish STO within the state of Arizona."
While Zeidman said a single Jewish STO would best serve the Jewish community, other Jewish STO's have been established and are already taking donations.
Chabad Tuition Organization Inc. sent out letters in July seeking donations to provide scholarships to students at Phoenix Preparatory High School on the campus of the Chabad-Lubavitch Center in Phoenix.
Lynne Wellish, special projects director for Chabad and the school, said about $5,000 has been raised so far, which she called "a strong response in comparison to other schools of our size."
Wellish said it's important to get the word out about the credit and educate potential donors.
"I don't think people comprehend what the law's about," Wellish said. "I don't think that they understand that this is a direct tax credit."
She said that if 200 families would donate $500 each to Chabad Tuition Organization, the $100,000 raised could provide scholarships to about 16 students, or approximately half of the school's children.
Rabbi Harris Cooperman, principal of Phoenix Hebrew Academy, predicts that, once "people understand the tax advantages they gain" from the credit, they are "going to jump in."
While he doesn't have dollar figures available yet, he said the initial response has been encouraging.
"We've only begun to tap the tremendous resource from this (tax credit)," Cooperman said. "It's a tremendous potential here, especially when people find out it will help them financially with the tax laws. It's a really exciting thing."
Cooperman said the Cheder Scholarship Organization was set up to provide scholarships for the Phoenix Hebrew Academy and the Tucson Hebrew Academy.
He said the Phoenix school has about 150 students and that more than $200,000 in scholarship money has been awarded for the school year that began Aug. 16.
The Catholic Tuition Organization of the Diocese of Phoenix was able to raise $835,000 in 1998 for students attending the diocese's 33 schools, said Bill Schwanekamp, the director of stewardship who oversees diocese fund-raising.
He said the diocese has not yet begun this year's marketing campaign, so only $5,000 to $10,000 has been raised so far in 1999. The diocese will begin getting the word out in September, but he doubts that more than 15 percent to 25 percent of Catholic families know about the credit.
The STO tax credit still faces a court challenge from opponents who says it violates the principle of the separation of church and state. However, the state Supreme Court rejected that argument earlier this year. The court's decision has been appealed to the U.S. Supreme Court, which has not yet decided whether it will hear the case.
Wellish and Schwanekamp said uncertainty over the credit's fate may have kept many people from trying to take advantage of it.
Both tax credits can only be taken against money otherwise owed to the state at tax time. If no money is owed in a given tax year, the tax credit may be taken in a future year.
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