by Staff Reporter | Dec 7, 2024 | Education, News
By Staff Reporter |
Arizona grew the number of Education Savings Plan (or “AZ529”) accounts to nearly 47,600 over the last four years.
Arizona Treasurer Kimberly Yee reported that assets of those accounts increased nearly 50 percent to $2.4 billion within the last four years.
AZ529 accounts allow parents, grandparents, or future students to take a tax-advantaged approach to saving for their educational expenses. Those opening the accounts also don’t need to be related to the beneficiary, and they may accept gifts to these accounts from others.
The opening cost for an AZ529 account starts with investments as low as $15 monthly and no application fee, with plan providers going up to $25 and $150.
AZ529 savings may be used at most accredited public or private universities, colleges, community colleges, technical and vocational schools nationwide, or apprenticeship programs, and even certain foreign institutions.
Qualified educational expenses include tuition and fees; books, supplies, and equipment; public, private, or religious K-12 school tuition for up to $10,000 per year; and up to $10,000 in student loan repayments.
Under these accounts, distributions are exempt from Arizona income tax and federal income tax. AZ529 received Morningstar’s 2023 Silver Rating.
Not only are the distributions tax-exempt, but contributions are tax deductible. Arizona allows AZ529 contributors to receive deductions of up to $4,000 per beneficiary for married tax filers who file a joint return and $2,000 per beneficiary for individual tax filers.
AZ529 plans must be funded by December 31 of this year to be eligible for deductions on 2024 taxes.
Arizona offers two financial institutions for AZ529 plans: Fidelity Investments and Goldman Sachs 529 Plan. The former allows for personal account opening, while the latter allows for personal or financial advisors to open accounts. Both have contribution limits of $590,000.
AZ529 also offers an annual essay writing contest, with hundreds of dollars in rewards offered. This past year, 20 students won over $500 toward their AZ529 accounts out of the over 600 who participated.
This year, the state began allowing certain “leftover” AZ529 funds to be transferred to a Roth IRA free of any tax, penalty, or applicable income limits for the first time. Qualifying AZ529 accounts have been maintained for a minimum of 15 years under the same owner and same designated beneficiary, and the amount transferred must also have been contributed at least five years prior to the transfer and the aggregate lifetime limit for rolling over is $35,000.
Or, account owners have the option to change the name of the beneficiary to another. In the event that the beneficiary receives a scholarship, becomes disabled, or dies, the account owner may withdraw the assets in the account without incurring the 10 percent federal tax penalty normally issued for non-qualified withdrawals.
Congress created 529 plans in 1996, officially known as “qualified tuition programs.” AZ529 plans are the state of Arizona’s version of these programs.
Federal financial aid programs may take up to about six percent of the AZ529 account balance into consideration as a parental asset when determining eligibility for need-based aid.
AZ Free News is your #1 source for Arizona news and politics. You can send us news tips using this link.
by Daniel Stefanski | Nov 24, 2024 | News
By Daniel Stefanski |
One of the Arizona Governor’s chief nemeses will be returning for duty in the upcoming legislative session.
Last week, it was reported that Senator Jake Hoffman would be reprising his role as the Chairman of the Arizona Senate Committee on Director Nominations (DINO).
“We’ve seen the tragic fallout from Katie Hobbs’ fake director scheme and its impacts on Arizonans in recent months, including the death of a child in DCS custody and a major $2 million fraudulent transfer of taxpayer dollars from DOH,” said Chairman Hoffman. “These heartbreaking or otherwise incredibly serious incidents could have been avoided had she followed the law and taken the Senate confirmation process seriously. When her illegal ploy didn’t work, she spent millions of dollars trying to flip control of the Legislature to get her radical nominees approved by Democrats and failed miserably. The committee invites Katie Hobbs to come to the table with sane, nonpartisan, qualified nominees, and we will approve them. What we won’t do is rubberstamp unqualified radicals.”
Arizona Senate President Warren Petersen told AZ Free News, “I formed the DINO committee to make sure nominations are competent and nonpartisan. In the past, we have seen Governor nominees get approved with very little vetting. With a thorough review of each nominee, we will assure that our citizens have the best directors possible.”
On February 2, 2023, Petersen announced the formation of the Senate Committee on Director Nominations, tasking this panel “with gathering information and evaluating qualifications on the governor’s executive appointments in order to recommend a course of action for the Senate to take on each individual.” The Senate President appointed five members to serve on the committee – three Republicans and two Democrats.
Over the next several months, the committee held multiple hearings for Hobbs’ nominees. Although Hobbs was upset that not every one of her nominees received a passing grade, Petersen reminded observers that the process chosen by the Senate had “approved 70 percent of her nominees,” adding that “we are not a rubber stamp.”
In September 2023, Hobbs sent a letter to Petersen, informing him that she would “withdraw all director nominations that remain pending before the Senate and pursue other lawful avenues of ensuring State government can continue to function for Arizonans.” The governor blamed Senate Republicans for not “fulfilling (their) statutory obligations in good faith.”
After receiving Hobbs’ correspondence, Petersen stated, “This move by the Executive Branch showcases another prime example of an elected official who believes they’re already above the law and will go to extreme measures to bypass the requirements of the law when they don’t get their way.” Petersen also warned of the consequences of Hobbs’ unprecedented actions, saying, “Without directors fulfilling these obligations, the legality of every decision made by these state agencies is dubious, and litigation against the state would surely prevail.”
It didn’t take long for Petersen’s warning to come to fruition. One day after his statement, Arizona State Treasurer Kimberly Yee held a Board of Investment Meeting and refused to recognize “employees from the Department of Administration or the Department of Insurance and Financial Institutions as legally participating members.”
The Arizona State Senate then filed a lawsuit in the Maricopa County Superior Court against Hobbs in December 2023 over her refusal “to nominate agency directors, bypassing the Senate’s advice and consent processes.” The lawsuit asked the Court to declare that the Governor has violated state law and to require her to nominate directors to any of the agencies missing Senate-confirmed heads.
Earlier this year, Maricopa County Superior Court Judge Scott A. Blaney issued a ruling in the lawsuit, concluding that the Governor “has improperly, unilaterally appointed de facto directors for these 13 agencies, [and] must comply with the procedures and deadlines in ARS 38-211 (B) & (C) for appointment of the agency directors.”
In his ruling, Judge Blaney wrote, “It is also not lost on the Court that the Executive Deputy Directors are the same individuals that the Governor previously nominated and forwarded to the Senate for review, but withdrew when she grew frustrated with the Senate…Under Arizona law, directors run the respective administrative agencies and are appointed to their important positions through a statutorily defined process. That process requires oversight by the legislative branch. Here the Governor willfully circumvented that statutory process and eliminated the Legislative branch from its oversight role.”
Judge Blaney also asserted that “if the Court were to agree that the Governor can side-step applicable statutes in this manner to arrive at her desired end state, it would render meaningless [all statutes governing this process].” The judge stated that “the Court therefore cannot arrive at any statutory interpretation that results in elimination of the Senate’s consent role from the statutory scheme.”
Blaney ended his ruling by expressing his desire for both the Governor’s Office and Senate Republicans to come together to resolve the matter between them. He wrote, “The Court will set a separate evidentiary hearing or oral argument for a date in late July or early August 2024. This will give these co-equal branches of government an opportunity to meet and confer in an attempt to reach a mutually agreeable resolution of this dispute.”
Both sides were able to reach an accord soon after the court decision. In August, Arizona Senate Republicans announced that “Governor Katie Hobbs admit[ted] she violated state law through her scheme to circumvent the Senate confirmation process for director nominations and has agreed to submit new candidates for consideration, as required by law.”
Many of those new nominees from the Governor’s Office are expected to be sent to the Arizona Senate at the start of the 57th Legislature in January, setting up potentially contentious battles over their qualifications with legislative Republicans.
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
by Matthew Holloway | Nov 6, 2024 | News
By Matthew Holloway |
Top financial officers from 17 states, 13 State Treasurers, one Commissioner of Revenue, and three state auditors, came together to issue a firm rebuke to members of Congress calling upon Fortune 1000 companies to “reaffirm their commitments to Diversity, Equity, and Inclusion (DEI).”
The letter, signed by Arizona Treasurer Kimberly Yee, stated, “We the undersigned are state financial officials responsible for state investment vehicles that hold ownership positions in your companies. We write concerning recent calls from Congressional members that your companies reaffirm their commitments to Diversity, Equity, and Inclusion (DEI). They commend DEI to you, claiming it is ‘good for business’ and ‘benefits employees, customers, and the bottom line.’ Significant evidence is mounting that precisely the opposite is true.”
Yee and her colleagues wrote in response to entreaties sent by a coalition of Democrat politicians, who wrote to the same firms in support of the radical-left DEI agenda. The Democrat coalition made unfounded claims that DEI programs create “a culture of equality” that “allows your companies to remain competitive,” as reported by the Daily Wire.
Jeremy Tedesco, Alliance Defending Freedom SVP of Corporate Engagement told the outlet:
“The divisive and discriminatory ideology at the root of DEI has caused some of our country’s most prominent companies, like Home Depot, Lowes, Ford, and Toyota, to pull back on their DEI programs. We should celebrate that and call on other companies to follow their lead. Sadly, some members of Congress have instead responded by urging companies to reaffirm their DEI commitments. Businesses should listen to their employees, customers, and shareholders, rather than politicians, and jettison DEI once and for all.”
The letter from the State Officers cites scholarly studies from Econ Journal Watch and Harvard Law School Forum on Corporate Governance that sharply disprove the Democrats’ claims that corporate DEI efforts improve bottom line earnings and debunk the McKinsey studies upon which the agenda is based. They state, “The authors of the Econ Journal Watch article reported that they were ‘unable to quasireplicate’ the McKinsey studies’ results and admonished that ‘they should not be relied on to support the view that US publicly traded firms can expect to deliver improved financial performance if they increase the racial/ethnic diversity of their executives.’”
The state officials highlighted key takeaways from a recent New York Times article for the industry leaders to consider when addressing the continuation of the controversial DEI measures: University student reactions and the birth of a “grievance culture,” and the delivery of a divisive culture as opposed to the goal of inclusivity. In a study that examined the University of Michigan’s DEI program as an exemplar of these policies, the author found in part:
“On campus, I met students with a wide range of backgrounds and perspectives. Not one expressed any particular enthusiasm for Michigan’s D.E.I. initiative. Where some found it shallow, others found it stifling. They rolled their eyes at the profusion of course offerings that revolve around identity and oppression, the D.E.I.-themed emails they frequently received but rarely read.”
The author noted, “Michigan’s D.E.I. efforts have created a powerful conceptual framework for student and faculty grievances — and formidable bureaucratic mechanisms to pursue them. Everyday campus complaints and academic disagreements, professors and students told me, were now cast as crises of inclusion and harm, each demanding some further administrative intervention or expansion.”
“Michigan’s own data suggests that in striving to become more diverse and equitable, the school has also become less inclusive: In a survey released in late 2022, students and faculty members reported a less positive campus climate than at the program’s start and less of a sense of belonging. Students were less likely to interact with people of a different race or religion or with different politics — the exact kind of engagement D.E.I. programs, in theory, are meant to foster.”
In the letter, the financial experts concluded that employees have widely expressed the same views of DEI programs with a Freedom at Work Survey conducted by Ipsos and released by Viewpoint Diversity Score, finding that 40% of respondents said the policies divide rather than unite the workplace. They added that legal exposure is also possible as Chief Justice Roberts observed, “The way to stop discrimination on the basis of race is to stop discriminating on the basis of race.” Adding that the race-based theories and practices baked-into DEI programs “fly in the face of our colorblind Constitution and our Nation’s equality ideal.”
Matthew Holloway is a senior reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.
by Staff Reporter | Jun 15, 2024 | News
By Staff Reporter |
Governor Katie Hobbs is under investigation for an alleged “pay-to-play” scheme with a group home that donated to her inaugural fund and the Arizona Democratic Party.
Last May, following the donations, the Arizona Department of Child Services (DCS) drastically increased the rates for the for-profit, state-contracted group home operator and major Democratic Party contributor, Sunshine Residential Homes (formerly Sunshine Group Homes). The nearly-60 percent rate increase was approved several months after the company gave $100,000 to Hobbs’ “dark money” inaugural fund. That $100,000 rendered to them by the second-largest donor after Arizona Public Service (APS). The governor raised nearly $2 million.
As the Arizona Republic reported, that $100,000 to the fund came several days after the group home operator was denied a rate increase in December 2022. No other group homes have been awarded rate increases under Hobbs, and none came close to the rate granted to Sunshine Residential Homes: over $230 a day, where the average was about $170.
The governor’s fund earned the unofficial “dark money” pejorative following reports that Hobbs pushed for $250,000 donations to her inaugural event, though the event itself only cost around $200,000.
Sunshine Residential Homes also donated $200,000 to the Arizona Democratic Party in September and October of 2022, and another $100,000 to the party in August 2023.
The group home operator’s CEO and founder, Simon Kottoor, and his wife, Elizabeth, also donated $10,000 collectively to Hobbs’ campaign.
Hobbs appointed the Kottoors to her inaugural committee.
Last year, the group home operator received a nearly 60 percent increase in rates: much higher than the rates awarded to other group homes, and unique given DCS choosing to cut contracts with dozens other group homes: 16, to be exact.
DCS blamed budget constraints coupled with a desire to scale back on the reliance of group homes for the contract denials.
Hobbs’ spokesman, Christian Slater, claimed the allegations came from a place of unsubstantiated scrutiny similar to other attacks by “radical and partisan legislators.”
“Governor Hobbs is a social worker who has been a champion for Arizona families and kids,” said Slater “It is outrageous to suggest her administration would not do what’s right for children in foster care.”
Some have questioned whether Sunshine Residential Homes wired additional funds to Hobbs’ inaugural fund after their $100,000 donation cleared in February 2023, or whether the group home operator or its executives issued donations to other groups operated by Hobbs, like the “An Arizona For Everyone” entity.
An Arizona For Everyone, a nonprofit, was activated in December 2022 and voluntarily dissolved in September 2023. No tax filings exist for the nonprofit on the IRS public search portal of tax-exempt entities.
Last Thursday, Attorney General Kris Mayes announced an investigation into the matter. On Friday, Mayes also ordered Maricopa County Attorney Rachel Mitchell to back off her investigation and for Auditor General Lindsey Perry to stay away.
“It would not be appropriate or in the best interest of the state to conduct parallel investigations into the same matter. Furthermore, a separate process conducted by the MCAO could jeopardize the integrity of the criminal investigation that my office will now proceed with,” wrote Mayes.
However, Treasurer Kimberly Yee urged Mitchell to continue her own investigation into Hobbs to complement Mayes’ investigation. In a press release on Monday, Yee announced request letters to both Mitchell and Mayes.
“Arizona taxpayers deserve financial accountability. Giving state dollars to political donors is a grave misuse of public funds,” posted Yee on X.
In her letter to Mitchell, Yee advised that Mitchell continue her investigation over Mayes’ conflict of interest.
“Pursuant to these legal authorities and due to concerns related to Attorney General Mayes’ ethical conflict of interests because her office is required to provide legal services to the agencies at issue and the fact that her representatives have personal and professional relationships with those individuals potentially involved in any alleged wrong-doing, I respectfully request that you investigate the allegations that have occurred in your jurisdiction, Maricopa County,” wrote Yee.
In Yee’s letter to Mayes, the treasurer advised the attorney general that her assertion of singular control over any investigation — especially one involving the state agencies she represents — was inappropriate and unlawful. Yee suggested that Mayes transfer the investigation wholly to Mitchell or another independent county attorney.
“[T]hat is the only action that will ensure the integrity of the investigation and avoid the duplication of efforts you raise as a concern in asserting sole jurisdiction,” wrote Yee.
Sunshine Group Homes was recognized as a nonprofit by the IRS until 2022, when they were placed on the auto-revocation list that August (EIN: 86-0815254).
According to the latest publicized tax filings from a decade ago, the Kottoors received a collective $623,500 annually in reportable compensation from related organizations.
AZ Free News is your #1 source for Arizona news and politics. You can send us news tips using this link.
by Staff Reporter | May 21, 2024 | News
By Staff Reporter |
Arizona Treasurer Kimberly Yee was honored before Congress on Monday for her work and legacy inspiring girls and young women.
Congresswoman Debbie Lesko presented the recognition for Yee. Lesko noted that Yee was the first Chinese-American woman in Arizona to take on a high state-level position, as well as a Republican.
“It is the first Asian-American elected to a statewide office in Arizona history,” said Lesko.
Yee formerly served in the Arizona legislature, in both the House and the Senate, and rose to become the state’s second female majority leader, after the late Sandra Day O’Connor.
Prior to joining the state legislature and coming to Arizona, Yee worked for California’s Republican governors Pete Wilson and Arnold Shwarzenegger. After Yee moved to California, Yee became communications director for the place she now leads: the state treasurer’s office.
Yee’s transition into the legislature began after Governor Jan Brewer successfully recommended Yee to replace another lawmaker, former Republican representative Doug Quellan.
It was in the legislature that Yee passed a bill requiring doctors to provide women with the option of an ultrasound before obtaining an abortion.
Some of Yee’s high marks in office include her improvements that led to record highs of the Permanent Land Endowment Trust Fund, totaling over $8.6 billion at one point (as of March’s end, $6.75 billion); punishing companies’ boycotts of Israel; and getting into state law a requirement of financial education for high schoolers prior to graduation.
“Treasurer Yee’s service to Arizona has raised financial literacy rates, improved Arizona’s economy, and helped show young women and girls across the state that anything is possible,” said Lesko.
Yee has acted and spoken out consistently on her views of unsound policy, usually Democratic.
Back in February, Yee joined state Republican lawmakers’ lawsuit against the Biden administration over its confiscation of nearly one million acres of land in northern Arizona in an attempt to declare the land a monument.
The treasurer has also pushed back on Governor Katie Hobbs. She asserted publicly that the governor’s proposed education funding plan was “dangerous and unsustainable.”
Yee also refused to admit government employees under two agencies during a Board of Investment meeting after the Governor refused to nominate agency directors.
After the Hamas terrorist attack that initiated the ongoing conflict between Israel and Gaza, Yee ramped up support for Israel. The state increased its bond holdings to support Israel.
Yee ensured Arizona was the first state in the country to enforce anti-Boycott, Divestment, and Sanctions laws. The state divested $143 million from Unilever, the parent company of Ben & Jerry’s, in response to the latter company’s ceasing distribution in Israel.
Yee also improved Education Savings Plans (ESPs) under her leadership. The ESPs were up 38 percent: a three-year difference worth $2.25 billion.
Last year, Yee resisted Hobbs’ alleged desire to cancel ESA-related grants enabling children to attend all-day kindergarten.
Assets under Yee’s management grew from $15.4 billion when she took office to $30.4 billion.
AZ Free News is your #1 source for Arizona news and politics. You can send us news tips using this link.
