Arizona Tax-Credit Scholarship Case Appealed to Supreme Court

Published March 15, 2010

School choice activists in Arizona are asking the U.S. Supreme Court to reverse a lower court ruling that found the state’s 13-year-old tax credit scholarship program unconstitutional.

Attorneys for the Arizona chapter of the Institute for Justice, a nonprofit civil liberties law firm based in Washington DC, filed a writ of certiorari in February asking the court to overturn a Ninth U.S. Circuit Court of Appeals decision handed down last April. The Ninth Circuit denied an en banc hearing of the case in October.

The case is Winn v. Arizona Christian School Tuition Organization.

Arizona’s tax credit scholarship program lets individuals take a dollar-for-dollar tax credit for making donations to qualifying organizations in the state. Those organizations grant scholarships for children to attend private schools, which currently serve more than 28,000 students under the program.

The American Civil Liberties Union (ACLU) challenged the program’s constitutionality in 2000, and a Ninth Circuit panel last year held the tax credit unconstitutionally advances religion because most taxpayers donate to religious schools.

‘Clearly Erroneous’

Tim Keller, executive director of the Institute for Justice’s Arizona office and lead counsel in the case, says the Supreme Court should grant a summary reversal. That would mean neither side would submit briefs or participate in oral arguments.

“The U.S. Supreme Court exercises its authority to summarily reverse a lower court when the lower court’s decision is clearly erroneous or is in direct conflict with Supreme Court precedent,” Keller explained. “Here, the Ninth Circuit’s decision in Winn satisfies both criteria.”

Keller says Arizona’s scholarship program is neutral with respect to religion.

“Neither taxpayers nor parents have any financial incentive to donate to a religiously affiliated scholarship organization over a nonreligious organization or to select religious over nonreligious private schools,” Keller said. “The program is based entirely on private choice.”

Precedent Favors Program

Keller also says the Ninth Circuit’s ruling conflicts with Supreme Court precedent. “It’s in direct conflict with decades of Supreme Court precedent upholding educational aid programs like the scholarship tax credit at issue in this case, as well as in direct conflict with the Arizona Supreme Court’s 1999 decision upholding the program,” Keller said. “In other words, what this case is most notable for is what it does not involve: State action advancing religion.”

Keller points to the Supreme Court’s 2002 ruling in Zelman v. Simmons-Harris, where the court held Ohio’s school voucher program did not violate the establishment clause of the First Amendment. Keller says the same reasoning should apply to Arizona’s tax credit program.

Court Claimed ‘Imprimatur’

But the three-judge Ninth Circuit panel last year claimed in its 2-1 ruling Arizona’s program most likely conflicts with the Zelman case.

“Although scholarship aid is allocated partially through the individual choices of Arizona taxpayers, overall the program in practice ‘carries with it the imprimatur of government endorsement,” wrote Judge Raymond Fisher, citing language from Zelman. That means program would violate the First Amendment, the court ruled.

Keller strongly disputes the Ninth Circuit’s reading of the law.

“The panel asserted that the Arizona scholarship tax credit did not provide parents ‘true private choice’ because taxpayers to date have directed most of their donations to school tuition organizations that provide scholarships only to religious schools,” Keller explained.

“But the program is one of true private choice,” he continued. “Private choice governs every level of Arizona’s tax credit scholarship program. Without any government direction or influence, taxpayers decide which privately operated scholarship organizations receive charitable donations.”

Decision ‘Absurd on Its Face’

Matthew Ladner, vice president of research for the Goldwater Institute in Phoenix, agrees there is no establishment of religion problem in Winn.

“The issue involved is whether the state of Arizona is compelling anyone to send their child to a religious school,” Ladner said. “The assertion is absurd on its face.”

“Taxpayers lavish around $9,500 on every child attending a public school, and around $7,800 on children attending one of our 500 charter schools,” Ladner noted. “The notion that a system providing for a limited number of private scholarships worth less than $2,000 apiece on average to attend both religious and nonreligious schools compels anyone to attend a religious school is simply absurd.”
 
Despite the Ninth Circuit’s unfavorable ruling, which remanded the ACLU’s lawsuit to a lower court judge last year, the tax credit scholarship program continues to operate. As a result, Keller says, a “cloud of unconstitutionality now hangs over the program” and has “almost certainly chilled donations” to scholarship organizations.

If the case proceeds in the lower court, Keller said, “thousands of children could be uprooted from their current private schools.”

Far-Reaching Implications

A Supreme Court decision would have far-reaching implications for school choice policy across the nation. At least six other states — Florida, Georgia, Indiana, Iowa, Pennsylvania, and Rhode Island — have educational tax credit programs similar to Arizona’s. Florida and Georgia also have limited voucher programs.

“School choice is not only constitutional; it is also good public policy,” said Keller. “Empowering parents to choose the school that best suits their child’s individual needs places competitive pressure on public schools to find innovative ways to improve and attract students.”

The Supreme Court is expected to rule on Keller’s summary reversal motion by April 30.

Sarah McIntosh ([email protected]) teaches constitutional law and American politics at Wichita State University in Kansas.

Internet Info:

Ninth Circuit decision in Winn v. Arizona Christian School Tuition Organization: http://www.heartland.org/policybot/results/27285/Winn_v_Arizona_Christian_School_Tuition_Organization_2009.html

Zelman v. Simmons-Harris decision: http://www.schoolreform-news.org/article/9459