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InsiderOnline Blog: April 2011

School Choice Tax Credit Program Constitutional

School choice tax credit programs that allow religious organizations to participate are constitutional, said the Supreme Court earlier this week. The American Civil Liberties Union had sued Arizona, claiming the state’s scholarship tax credit program, by allowing taxpayers to get a tax credit for donating to religiously affiliated nonprofits, violates the Constitution’s prohibition against government establishment of religion. The Court disagreed—making it five times the ACLU has lost a challenge to this particular Arizona law.

Writing for the Court, Justice Anthony Kennedy explained that the plaintiffs had failed to identify an injury from the law that would have given them standing to sue in the first place:

When Arizona taxpayers choose to contribute to STOs [school tuition organizations], they spend their own money, not money the State has collected from respondents or from other taxpayers. Arizona’s [scholarship tax credit law] does not “extrac[t] and spen[d]” a conscientious dissenter’s funds in service of an establishment, or “‘force a citizen to contribute three pence only of his property’” to a sectarian organization. … Like contributions that lead to charitable tax deductions, contributions yielding STO tax credits are not owed to the State and, in fact, pass directly from taxpayers to private organizations. Respondents’ contrary position assumes that income should be treated as if it were government property even if it has not come into the tax collector’s hands. That premise finds no basis in standing jurisprudence. Private bank accounts cannot be equated with the Arizona State Treasury.

The typical family receiving a scholarship through the Arizona program has an annual income that’s almost $5,000 lower than that of the typical family statewide, according to research by Vicki Murray of the Pacific Research Institute. [“An Analysis of Arizona Individual Income Tax-credit Scholarship Recipients’ Family Income, 2009-10 School Year,” Program on Education Policy and Governance, Harvard Kennedy School, 2010.]

Posted on 04/06/11 05:37 PM by Alex Adrianson

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