federal-education-tax-creditsAdministrators with the Colorado River Union High School District (CRUHSD) are getting ready to embark on an ambitious campaign to raise more than a million dollars from taxpayers, and they really only need 3,500 residents to participate.

No. They won’t be asking the school board to raise your property taxes.

Instead, they’re going to be asking taxpayers to take advantage of a decade-old tax credit that will literally do nothing but divert a portion of their tax liability to the local school district. The extracurricular activity tax credit has been in place since 2005 and has been a popular tool for many school districts across Arizona to raise funds that would otherwise go to the Arizona state general fund.

The tax credit is very simple. Individual Arizona income taxpayers, which is anyone who earns money in the state of Arizona, regardless of where you live, can get a $200 tax credit annually by simply giving money to any school for extracurricular activities. Couples can claim up to $400. It doesn’t reduce your taxes, but it diverts part of your tax liability to a local school rather than to the state general fund.

In the Tri-State area, the tax credit has not generated as much interest as in other parts of the state, but administrators will be trying to change that in the very near future.

“The reason we do not get money for the tax credit is we don’t ask,” Frei told the board on Monday. “Until you actually say, ‘I’m going to be at your house and pick up your tax credit check,’ people don’t just jump up and come down and write you a check.”

Frei said, his first target will be the employees of the school district. They, like every other worker in Arizona, pay income taxes to the state of Arizona and are just as eligible to use the tax credit.

While revenues from the tax credit must go to extracurricular activities, Frei says, if enough money is generated it could free up a substantial part of the budget for other uses. Right now, the school district spends $600,000 annual on extracurricular activities with athletics taking up the biggest chunk of the budget. Frei is hopeful to raise enough money by the tax credit to free up that money for pay raises for teachers and other district employees.

“The challenge is to get every teacher in the district somehow excited about the tax credit,” Frei said, “because it will raise their very own salaries.”

The school board gave Frei the green light to not only institute a payroll deduction program for CRUHSD employees, but also to approach other employers in the area to do the same thing. Taxpayers would have to pay the money upfront, but it can be spread over the entire year. A $200 donation would equate to less than $8 every two weeks. The tax credit would then be used when you file your taxes and you’re tax liability would be reduced by that same $200, meaning you may get the money right back.

“Somebody has to convince me there are not 3,500 people that would contribute their tax credit,” Frei said recognizing there are about 75,000 people living on the Arizona side of the river from Katherine Landing to Topock.