Arizona may be a leader in the school choice movement, but that hasn’t stopped opponents from continuing to mount legal challenges against the state’s tax credit programs.
The latest confrontation came on September 17, when the Arizona School Boards Association (ASBA), ACLU of Arizona, and Arizona Center for Law in the Public Interest argued against the constitutionality of the state’s tuition tax credit programs before the state’s Court of Appeals.
The Arizona chapter of the Institute for Justice (IJ), which represents parents and Arizona School Choice Trust, one of the state’s scholarship-granting organizations, defended the tax credit programs. The state has one each for corporations and individuals.
Trying to Thwart Choice
School choice opponents were appealing a March 2007 decision by the Maricopa County Superior Court throwing out the group’s third lawsuit against scholarship tax credits in the state.
The latest suit was filed in September 2006 after Arizona lawmakers approved expanding the state’s successful individual tax credit program to include donations by corporations, which were capped last year at $14.4 million.
In a statement following the filing of the appeal, Tim Keller, executive director of IJ’s Arizona chapter, called it “the most frivolous lawsuit ever filed against a parental choice program.”
Neither side would speculate on when the appeals court might render its decision.
Constitutionality Questioned
Christopher Thomas, general counsel for ASBA, who is representing his group in the lawsuit, argues the law violates the state constitution because it allows public funds to end up in private, particularly religious, schools.
“It certainly violates, if not the letter, then the spirit of the law,” Thomas said.
Article 9, Section 10 of the Arizona state constitution states, “No tax shall be laid or appropriation of public money made in aid of any church, or private or sectarian schools, or any public service corporation.”
Calls Credit a Tax
That, says Thomas, is “more distinct and more direct in terms of separation of church and state” than the U.S. Constitution. He also claims the provision means what had been thought to be precedent rulings in other school choice cases don’t fully apply here.
For example, Thomas said that while he “agreed with” the U.S. Supreme Court’s decision upholding the constitutionality of Cleveland’s voucher program in Zelman v. Simmons-Harris, a “constitutional provision” would need to be approved by voters before Arizona’s school choice programs are “on firm legal ground.”
Proponents are trying to establish similar legal precedent for “a more-expansive [school choice] program” in Arizona, Thomas said.
“Where you have a separate state constitution that is distinct, it still has to pass our state constitution,” Thomas said. “Look at the plain text of our constitution. It says ‘no tax in the aid of private or sectarian schools.'”
‘Irrelevant’ Arguments
IJ attorneys said opponents’ arguments are irrelevant when it comes to tax credits.
“Giving tax credits is not the same as appropriating funds for public schools,” IJ attorney Dick Komer explained. “The money gets to schools in a removed manner. First, the individual or corporation makes their donation, then the scholarship is awarded to the family, and finally the money is received by private schools to pay for tuition.”
Komer said opponents’ arguments are the same ones rejected by several courts in the past.
“They want to get the earlier ruling overturned,” Komer said.
In October 1999, the U.S. Supreme Court turned down an appeal of a decision by the Arizona Supreme Court, which had upheld the program under both the state and federal constitutions earlier that year. However, the U.S. Supreme Court later ruled the case could be challenged in the federal courts.
In 2005 the Arizona Civil Liberties Union appealed a U.S. District Court judge’s ruling upholding tax credits as constitutional and granting IJ’s motion to dismiss. The case is pending in the Ninth U.S. Circuit Court of Appeals.
Scholarships = State Savings
In a new survey of 14 of Arizona’s 19 school tuition organizations (STOs), education researcher Vicki Murray estimates combined state tax credits for the scholarship programs saved taxpayers around $5 million last year alone, and could reap savings of $57 million during the programs’ first five years.
According to the survey, released in October, nearly $12 million in combined state tax credits for scholarship donations last year made it possible for nearly 2,000 children from low- and moderate-income families to attend private school. Without scholarships, those students, who came from households with an average annual income of $35,533 during the 2007-08 school year, would likely have been forced to return to their previous schools at a combined cost of more than $17 million.
Choice Bills Defeated
During this year’s legislative session, Thomas’s group opposed school choice bills in both the House and Senate, including HB 2098, which would have made the corporate tuition tax credit to private schools permanent. A 29-29 vote caused the measure to fail.
The groups also vigorously opposed expanding the state’s voucher program for disabled children. SB 1025 would have allowed the Arizona Department of Education to grant scholarships to students who did not meet the current requirement of having spent the prior year in an Arizona public school due to a medical crisis requiring hospitalization.
Accountability Dispute
Thomas claims his group does not reject outright all forms of educational choice.
“We lead the country in choice,” Thomas said. “We have the most expansive charter school system in the country. But these are public schools that still have to adhere to public accountability; they still have to be accountable for how they spend their money and have to administer the state-required tests just like all the other public schools.”
But Komer said that’s a policy debate, not a valid legal argument.
“The law didn’t say if a school’s not accountable, it can’t be done,” Komer said.
“Still, the only reasons we have accountability measures in the public schools is that without them, there would be no accountability,” Komer continued. “Parents, on the other hand, hold private schools accountable. That’s the best kind of accountability possible.”
Jim Waters ([email protected]) is director of policy and communications at the Bluegrass Institute for Public Policy Solutions in Bowling Green, Kentucky.
For more information …
“Arizona School Tuition Organization Association Survey of Corporate Tuition Tax-Credit Scholarship Recipients’ Family Income: School Years 2006-07 and 2007-08,” by Vicki Murray, Pacific Research Institute, October 2008: http://astoa.com/index.php
