Tax Credit Tangle: Supreme Court Considers Legality Of Ariz. Religious School Aid

The Arizona tax-credit scheme is nothing but a boondoggle for funding religious schools on the taxpayers’ dime.

The Supreme Court heard oral arguments this morning in an important case dealing with government aid to religion.

Two issues are at stake in Arizona Christian School Tuition Organization v. Winn. The high court will decide whether an Arizona program that gives taxpayers a 100 percent credit for money they donate to private organizations that provide private school vouchers is constitutional.

The justices will also determine whether taxpayers have the right to challenge the program – a legal doctrine known as “standing.”

As I sat in the Supreme Court press gallery, I couldn’t help but feel overwhelmed by a barrage of talk about tax credits, deductions and charitable donations. Several of the conservative justices seemed intent on arguing that the money given to these groups is akin to a charitable contribution, asserting that it’s not really government funds.

[caption id="attachment_3060" align="alignleft" width="300" caption="AU staffers (l to r) Sandhya Bathija, Alex Luchenitser and Rob Boston in front of the Supreme Court after the Arizona Christian School Tuition Organization v. Winn argument."][/caption]

Paul Bender, the attorney arguing on behalf of the taxpayers who want to challenge the program, pointed out that Arizona residents have two choices: Pay the money as part of their taxes or contribute it to a voucher group.

It seems pretty clear: The state is losing funds that would otherwise end up in the general coffers. Almost all of that cash is instead being used to pay for tuition at religious schools.

There was a time when a scheme like this would have been struck down by the Supreme Court in a heartbeat. But unfortunately, those days are behind us. Appointees made to the bench during the tenures of President George H.W. Bush and his son George W. Bush have a crabbed view of church-state separation – especially when it applies to tax funding of religion.

As Church & State reported in September, the Arizona scheme is nothing but a boondoggle for funding religious schools on the taxpayers’ dime. In 2009, 91.5 percent of the $52 million collected went to religious institutions. Worse yet, although the program was pitched as a way to help low-income children, it contains no income test. Most of the people taking advantage of it are middle and upper class.

Remarkably, Acting Solicitor General Neal K. Katyal appeared before the justices to argue on behalf of the program. For some reason, the Obama administration thought it would be a good idea to join groups like TV preacher Pat Robertson’s American Center for Law and Justice, Jerry Falwell Jr.’s Liberty Counsel, the U.S. Conference of Catholic Bishops, the Christian Legal Society, the Alliance Defense Fund and others supporting this ill-conceived plan. (I was pleased to hear Katyal’s old boss, new Justice Elena Kagan, subject him to some grilling.)

Bender argued that the government is using private entities to do something the state cannot legally do: funnel students into religious schools that discriminate on the basis of religion.

Justice Stephen Breyer, who seems to enjoy playing devil’s advocate, asked Bender if the government could set up a program to aid Catholic, Jewish and secular hospitals to help cancer patients. He asked how this would differ from the Arizona program.

Bender’s answer was spot on: He said a program like that would be acceptable – unless, for example, the Catholic hospital announced it would only help Catholic cancer patients. That’s just what many of the religious schools in Arizona do: If you’re not willing to conform to the “right” religion, you don’t get a true choice of schools.

I don’t know how this case is going to shake out. The usual suspects (Chief Justice John Roberts, Justice Antonin Scalia and Justice Samuel Alito) were hostile to Bender in their questioning. Justices Ruth Bader Ginsburg, Sonia Sotomayor and Kagan seemed to lean in the separationist direction.

Justice Clarence Thomas hardly ever asks questions during oral arguments but always sides with the conservatives on church-state issues. That leaves Justices Anthony M. Kennedy and Breyer sitting somewhere in the middle. Their votes will probably determine the case.

A split decision is also possible. The court could uphold the right of taxpayers to sue but still rule in favor of the program. Or they could deny taxpayers’ right to sue and dismiss the case without even considering the church-state issues.

The decision will come by the end of June. And when it does, AU will have a full analysis.