After decade-long fight, Supreme Court leaves private school tax break in place
Published: April 4, 2011 at 8:35 am
The U.S. Supreme Court has upheld Arizona’s private school tuition tax credits, ending a contentious fight over the program that has lasted more than a decade.
Tim Keller, of the Institute for Justice, which intervened in the case on behalf of the Arizona School Choice Trust, said the decision lifts a constitutional cloud that has loomed over the program for years.
“Taxpayers should be very confident that they can contribute to school tuition organizations and be able to claim their tax credit on their state income tax return,” he said.
The court’s 5-4 decision held that donations to student tuition organizations, or STOs, are private contributions and not public expenditures, so the taxpayers who filed suit have no claim because they aren’t harmed by the contributions.
“Rather, taxpayers are free to pay their own tax bills without contributing to an STO, to contribute to a religious or secular STO of their choice, or to contribute to other charitable organizations,” wrote Justice Anthony Kennedy.
But the attorney for the losing side said there is still one important legal question surrounding the dollar-for-dollar tax breaks.
ASU law professor Paul Bender, who argued the case on behalf of several taxpayers, said the court never reached the question of whether STOs are constitutional, only whether taxpayers can challenge them.
“One hopes that somebody can challenge the constitutionality of a state program that I think clearly violates the Establishment Clause,” Bender said.
Bender conceded, however, that it would be a long shot to find someone who has standing to challenge the constitutionality.
According to the decision, the state estimates there have been $350 million in tax credits since the inception of the program.
The plaintiffs argued the STOs have the effect of government advancing religion because most of them are religious organizations that award scholarships for students to attend religious schools.
The program has survived legal challenges since February 2000 and been upheld by the Arizona Supreme Court.
In the most recent round of litigation, a federal judge found that the plaintiffs had no standing, but the appeals court overturned that ruling.
The case was argued on Nov. 3 before the U.S. Supreme Court.
Chief Justice John Roberts and justices Antonin Scalia, Clarence Thomas and Samuel Alito joined Kennedy in the April 4 decision.
Justices Stephen Breyer, Elena Kagan, Sonia Sotomayor, and Ruth Bader Ginsburg dissented.
Writing for the minority, Kagan said the majority came up with a novel distinction of standing for taxpayers who want question whether the Establishment Clause of the constitution has been violated.
“Cash grants and targeted tax breaks are means of accomplishing the same government objective – to provide financial support to select individuals or organizations,” Kagan wrote.