ARIZONA STATE SENATE
Phoenix, Arizona
teachers for Arizona; tax
credit
Purpose
Creates a tax credit for up
to four years for new teachers to cover previously paid postsecondary education
tuition expenses.
Background
The full-time certified
teacher population in Arizona school districts was 44,303 in FY 2000-2001,
according to the Arizona Department of Education’s most recent annual
report. Since charter schools account
for approximately 6.2 percent of all pupils enrolled in schools statewide, the
estimated number of charter schoolteachers was approximately 2,747 in FY
2000-2001, according to the Joint Legislative Budget Committee (JLBC)
staff. In total, Arizona employed an
estimated 47,050 full-time teachers in all public schools last year.
There are currently 2,995
teachers in Arizona who hold emergency teaching certificates that are valid for
one year, according to the Arizona Department of Education. The average teacher pay for new teachers in
1998 was averaged at $26,600.
S.B. 1166 allows new
teachers to receive a tax credit for the purpose of covering previously paid
postsecondary education tuition expenses from a qualified higher educational
institution.
The JLBC fiscal note for
S.B. 1166 indicates a decrease in state general fund revenues estimated up to
$5 million in FY 2004, up to $10 million in FY 2005, up to $16 million in FY
2006 and up to $23 million in FY 2007.
However, the JLBC fiscal note states that the cost estimates for the tax
credit are highly speculative, as it is difficult to predict individual
behavior in response to the new tax provision.
Provisions
1. Creates a tax credit for up to four years for new teachers to cover previously paid postsecondary education tuition expenses.
2. Requires taxpayers applying for the tax credit to meet the following criteria:
(a)
Possess
a bachelors degree in education from a university or institution under the
Arizona Board of Regents or the State Board for Private Postsecondary Education
after February 28, 2003.
(b)
Be
employed full-time as a classroom teacher at a public school during the tax
year when the credit is claimed.
3. Requires the tax credit amount per tax year to be equal to the amount of tuition actually paid by the taxpayer to the applicable university, college or institution for academic course work towards obtaining the education degree.
4. Prohibits the amount of the tax credit in any tax year from exceeding the average amount of tuition paid by the taxpayer during the years that the taxpayer was enrolled in the courses needed to obtain the education degree.
5. Prohibits the taxpayer from claiming the tax credit for any tuition amount that was already paid by a scholarship or by any other type of public or private grant.
6. Prohibits a taxpayer from being awarded the tax credit for more than four tax years pursuant to this act. Stipulates that the taxpayer is ineligible for the tax credit if the taxable year is more than five calendar years after the taxpayer obtained the education degree.
7. Allows a taxpayer to carry forward the amount of the claim not used to offset taxes for up to five consecutive tax years’ income tax liability when the allowable tax credit exceeds the taxes otherwise due on the tax claimant’s income or if no taxes are due.
8. Defines “full-time classroom teacher” and “public school.”
9. Provides for a general effective date.
Prepared by Senate Staff
March 14, 2002