Arizona Education Credits Survive

WASHINGTON, DC — The United States Supreme Court has reversed a federal appeals court decision striking down Arizona’s tax credit for contributions to organizations providing private school tuition assistance, ruling that taxpayers challenging the law do not have the authority to maintain the lawsuit. In a 5-4 ruling in Arizona Christian School Tuition Organization v. Winn, the Court held that the plaintiffs in the case do not have legal standing to challenge the law under the Establishment Clause because they cannot show that they sustained any concrete injury as a result of Arizona’s decision to grant a tax credit to persons who donate private funds to Student Tuition Organizations (STOs). The Rutherford Institute filed an amicus brief in the case arguing in support of Arizona’s law, arguing that the lower court’s ruling was hostile to religion and would result in individuals being stigmatized because of their religious beliefs. A copy of the Institute’s brief is available here.

“The Supreme Court’s decision leaves the tuition tax credit program intact,” said John W. Whitehead, president of The Rutherford Institute. “Although this is a good decision, it still leaves it open to challenge by a plaintiff with standing.”

In 1997, Arizona enacted a statute allowing taxpayers to claim an income tax credit in the amount of donations made to STOs, which are charitable organizations which donate at least 90% of their income to children as tuition assistance for attending private schools, whether they be religious schools, secular schools or both. After the statute took effect, several taxpayers challenged the law arguing that, as applied, the law violates the Establishment Clause because it advances religion.

Although a federal district court initially dismissed the lawsuit, the Ninth Circuit Court of Appeals reversed that decision, declaring that it “lacks religious neutrality and true private choice in making scholarships available to parents. 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.'” In its 5-4 decision, the Supreme Court reversed the Ninth Circuit’s judgment because the taxpayers who brought the lawsuit do not have legal standing.

Under Article III of the U.S. Constitution, a plaintiff must show that he has suffered a particularized concrete injury in order to sue for alleged violations of the Constitution. The Court rejected the taxpayers’ claim to standing, pointing out that taxpayer standing to raise an Establishment Clause claim exists only where the government extracts and spends tax money in aid or religion. Because Arizona’s tax credit law does not extract any money and does not spend money in support of religion, the Court held that the taxpayers do not have standing under Article III and their challenge to Arizona’s law had to be dismissed.

In their amicus brief, Rutherford Institute attorneys challenged the substance of the Ninth Circuit’s ruling, pointing out that Arizona’s law affords all Arizona students a broader range of educational opportunities by providing students in low-income districts with the same schooling options as those available to wealthier families.

Nisha N. Mohammed is the press contact for the Rutherford Institute, a nonprofit legal and educational civil liberties organization which provides legal assistance at no charge to individuals whose constitutional rights have been threatened or violated.