When former Arizona state legislator Mark Anderson sponsored a tuition tax-credit law benefitting religious and other private schools in 1997, he claimed it would help the state’s poorest kids get into “a better situation.”

The program was touted by its supporters, including its chief promoter Trent Franks, as a tool to make private education less expensive for parents who could not otherwise afford it. Franks, now a member of the U.S. House of Representatives, drafted the bill while working as a conservative activist. (Franks was the founder of the now-defunct Arizona Family Research Institute, a non-profit associated with James Dobson’s Focus on the Family.)

“Even the poorest child now becomes royalty in the system,” Franks wrote in a 1999 column in a local newspaper. “In the past, only wealthy parents could afford their children such an opportunity.”

Franks looked to Anderson, a Republican House member from Mesa, to push his measure through the legislature. Anderson’s legislative goals often dovetailed with the anti-church-state separation political agenda of the Rev. Sun Myung Moon’s Unification Church, of which he is a member.

The Franks-Anderson tuition tax-credit drive was successful – not in helping the state’s poor families – but in creating a backdoor voucher scheme that has allowed upper- and middle-class families in Arizona to send their children to religious and other private schools with help from the government, even when they could have afforded it on their own.

Nearly 14 years have passed since Franks concocted this program, and now the fate of his plan is in the hands of the U.S. Supreme Court. The justices, in Arizona Christian School Tuition Organization v. Winn, will determine whether the program is constitutional. The case will also test whether taxpayers have standing – the right to sue – to challenge such measures.

The Arizona tuition-tax credit program allows taxpayers to contribute to so-called school-tuition organizations (STOs), which use the “donations” to pay for tuition for students at religious and other private schools. Those who donate to the STOs receive a 100 percent dollar-for-dollar tax credit in return, up to a maximum of $1,000.

The program has primarily benefited religious schools. In 2009, 91.5 percent of the $52 million collected went to religious schools. Since the law passed in 1997, $349 million in taxes has been diverted from the state’s General Fund to the “scholarship” program – money that could have gone for improvements to the public school system.

For years, civil liberties activists and public school advocates opposed the scheme, trying to expose its creators’ real intent: to funnel public resources to religious schools and defund the state’s public schools.

According to David Berliner, a retired education professor from Arizona State University, the state constitution’s no-aid provision made it difficult for traditional voucher programs to succeed in the state.

“[Religious Right groups] knew vouchers weren’t getting anywhere in Arizona,” said Berliner, who serves as a member of the Americans United Board of Trustees. “A tuition tax-credit bill was their way around vouchers – another way for Christian fundamentalists to send kids to religious schools with taxpayer funds.”

The Supreme Court has not heard a case regarding public funding of religious schools since 2002, when it ruled 5-4 in Zelman v. Simmons-Harris that a Cleveland school voucher plan was constitutional.

But unlike in the Zelman case, the Arizona program is set up to favor primarily religious schools and leaves parents with little choice, which is what the 9th U.S. Circuit Court of Appeals said when it struck down the subsidy in April 2009. (The lawsuit was brought by the Arizona ACLU.)

Judge Raymond Fisher wrote that the Arizona tuition tax-credit scheme favors religious schools and that “the program’s operation may, in some instances, reveal its ostensible purpose to be a sham.”

He pointed out that the program’s largest recipient is the Catholic Tuition Organization of the Diocese of Phoenix, which requires that its tuition expenditures only go to Catholic schools.

The second largest recipient is the Arizona Christian School Tuition Organization, which restricts its payouts to “evangelical” Christian schools. 

The third largest group to receive donations is the Brophy Community Foundation, which only allows for scholarships at two Catholic schools.

The 9th Circuit decision dismayed sectarian school lobbyists, Religious Right groups and others who are eager to see tax aid to religious schools continue. They appealed the ruling to the high court, and now, the Arizona-based Religious Right legal outfit, the Alliance Defense Fund (ADF), and the Institute for Justice, the most prominent legal arm of the pro-voucher movement, are defending the Arizona program – claiming once again that it’s for the good of the state’s low-income families.

The ADF and the Institute for Justice are part of a strong pro-voucher movement, which seeks to squash the public school system and use public funds to support religious schools. (See “Sneak Attack,” September 2010 Church & State.)

Americans United is opposing these forces and will file a friend-of-the-court brief at the Supreme Court in the Winn case. AU attorneys and lawyers for other groups that support church-state separation and public schools will ask the court to strike down the Arizona scheme and protect taxpayer standing.

The high court will analyze the case from a legal standpoint, but the problems with the Arizona program extend far past the constitutional issues. For years, clever parents and STOs have been able to exploit the tax benefit since the law was written with few specific guidelines.

In 2009, The Arizona Republic and the East Valley Tribune (Mesa, Ariz.) exposed the misuse of the tuition tax- credit program since its inception. The majority of the STOs have no family income requirement – meaning the money can go to any student – regardless of need.

According to the Republic, two out of every three scholarships in 2007 went to middle- and upper-class students who would have already been able to attend private schools without the tax-credit aid.

In addition, families have learned to beat the system. Many parents want to earmark donations for their own children. Since the law specifically bars parents from donating to an STO to pay for their own child’s tuition, parents have been able to donate for a friend’s child and vice-versa.

For example, Frank Miller, an Arizona father of two middle-school students at Bethany Christian School in Tempe, told the Republic that he recruits his friends to donate to the school to cover one-third of the tuition for his sons, even though Miller and his wife earn about $100,000 a year.

“I’m not entitled to this money, but it’s a matter of empowerment,” he told the newspaper last fall. “I want to be empowered to spend money as I deem necessary, and my few friends that help my kids with the tax credits, they’re the same way.”

Despite Arizona lawmakers’ supposed intentions, the tuition tax-credit program has not made much difference for low-income families. Hispanic children in the state disproportionately come from poor families, and the Tribune study showed little change in their enrollment in private schools.

The newspapers’ reports also exposed that executives at two of the largest STOs have used tax-credit donations to buy luxury cars and real estate and fund their own for-profit businesses. And two-thirds of the STOs failed to spend at least 90 percent of their taxpayer donations on “scholarships” – as required by law – instead saving the money for a later time.

After the newspapers revealed the glaring abuses of the program, the legislature made some tweaks in an attempt to improve the program, said Anne Mardick, president of the Greater Phoenix Chapter of Americans United.

“While some of the changes were much needed,” she said, “The program itself is just another flavor of funneling money to religious schools. The last session’s program changes were like putting lipstick on a pig. At the end of the day, it’s still a pig.”

The Supreme Court’s decision in the Winn case could impact several other programs in states that also have similar “neo-voucher” programs.

Americans United Executive Director Barry W. Lynn said he hopes the high court will put a stop to these misguided schemes once and for all.