School Business Affairs September 2020

34 SEPTEMBER 2020 | SCHOOL BUSINESS AFFAIRS asbointl.org LEGAL ISSUES The Supreme Court weighs in on the constitutionality of tuition tax credit programs. The Supreme Court and Tuition Tax Credits By Charles J. Russo, J.D., Ed.D. T he Supreme Court recently entered the ongoing dispute over school choice in a case about tuition tax credits. In Espinoza v. Montana Department of Revenue (2020), the Court upheld the constitutionality of Montana’s Tax Credit Program (TCP), which allowed taxpay- ers, including parents and corporations, to deduct dollar-for-dollar state income tax credits for contributions toward funding scholarships to pay the tuition of students in nonpublic schools. At issue in Espinoza was language in Montana’s constitution modeled after the Blaine Amendment, a constitutional amend- ment that Congress rejected in 1876. The amendment was designed to prevent aid to “sectarian” schools — code for Roman Catholic schools. Even though Congress rejected the Blaine Amendment, most states, including Montana, which updated its pro- vision in 1972, included language modeled after it in their constitutions. In Espinoza , the Supreme Court invali- dated the Blaine-type language in Montana’s constitution on which its high court relied on in striking down the state’s TCP. Facts/Judicial History The Espinoza v. Montana Department of Revenue (2018) case began when three mothers in Northwestern Montana sued the Montana Department of Revenue, chal- lenging its refusal to classify the Christian school their children attended as a Qualified Education Provider (QEP) under the state’s TCP. The importance of being named a QEP was that under the TCP, taxpayers, includ- ing parents, were entitled to dollar-for-dollar tax credits for contributions of up to $150 per year they made to a Student Scholar- ship Organization (SSO). Parents could then choose the nonpublic schools (QEPs) their children would attend by using the mon- ies they donated to the SSOs to help pay their tuition. A state trial court, in an unreported opinion, granted the mothers’ request for summary judgment, essentially upholding the constitutionality of the TCP without the disputed rule, which excluded faith-based schools from serving as QEPs ( Espinoza 2018, p. 608). On appeal, in Espinoza (2018), the Supreme Court of Montana reversed in favor of the Department of Rev- enue, invalidating the TCP for two reasons. The amendment was designed to prevent aid to “sectarian schools”.... First, the state’s high court struck down the TCP because it violated the provision in Montana’s constitution forbidding state aid to “sectarian schools” ( Espinoza 2018, p. 607) insofar as it indirectly allowed the state to help pay the tuition of students who attended religiously affiliated schools. The court relied on language patterned after the original so-called Blaine Amendment. Second, the court declared that officials in the Department of Revenue exceeded their authority in enacting the disputed rule even though it struck down the TCP provision as unconstitutional. The mothers appealed to the Supreme Court, which agreed to review their case ( Espinoza 2019) based on the constitution- ality of Montana’s TCP. Supreme Court’s Judgment In Espinoza , a divided Supreme Court, in its five-to-four judgment, resulting in seven different opinions among the nine Justices, BBOURDAGES/STOCK.ADOBE.COM

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