August 21, 2013

#Back2SchoolChoice — What are tax credits?

By Joshua P. Thompson Senior Attorney

When most people hear about school choice, they typically think about vouchers.  Vouchers are basically a check that parents receive from the state that they can use to send their children to private schools.  The check, or “voucher,” can be used by parents to send their children to either sectarian or secular schools.  The anti-choice education establishment — teachers’ unions, ACLU, etc. — tried to stop the spread of vouchers by arguing that they violate the Establishment Clause of the First Amendment to the Constitution.  But, in Zelman v. Simmons-Harris, a case that PLF participated in, vouchers were held to be constitutional.  The Supreme Court correctly held that because parents were making independent choices on where to send their child, there was no endorsement of religion in violation of the First Amendment.

Undaunted, the anti-choice education establishment began challenging voucher programs under state constitutions — arguing that giving parents choices violate any given state’s constitution.  Many state Supreme Courts rejected this argument — most recently Indiana — but some state supreme courts bought into this argument.  Enter tax credits.  Tax credits are the choice community’s response to these state constitutional challenges.  Tax credits avoid the Establishment Clause problem by preventing the money that is used by parents from ever entering state coffers.  Instead of parents receiving a “voucher” from the state, parents receive scholarships from private organizations.  Those private organizations receive the money for the scholarships from private donors — individuals and/or businesses — who can donate to the organizations and then claim a corresponding tax credit on their tax bill.  By preventing the money from ever entering state coffers, it is implausible for the anti-choice groups to argue that the state is impermissibly endorsing religion.  And that is exactly what the Supreme Court held in Arizona Christian Sch. Tuition Org. v. Winn, another case that PLF participated in.  The “contrary position assumes that income should be treated as government property even if it has not come into the tax collector’s hands.”

Tax credits are now being promoted by choice groups across the country as the best way to ensure that competition is injected into K-12 education.  States like New Hampshire and Alabama have both recently passed tax credit programs.  But, of course, the anti-choice education establishment is not taking this new infusion of choice in education sitting down.  In New Hampshire, for example, a lawsuit has been filed arguing that the state’s tax credit program violates a number of more obscure state constitutional provisions.  One of the more absurd arguments made by the anti-choice groups is that the New Hampshire General Court — the name for the New Hampshire legislature — passed the tax credit bill with the purpose of benefitting religion.  That claim is of course absurd, testimony in the General Court, and the purpose of the bill, demonstrate that the program is clearly designed to benefit New Hampshire children.   To that end, PLF is representing the leading members of the General Court that worked to pass the state’s tax credit program.  That case is headed to the state’s Supreme Court, and PLF is confident that our defense of the program will end up benefitting New Hampshire families.

Tax credits are an exciting new opportunity for parents and children who are too-often required to attend one-size-fits-all government schools.  Tax credit programs are an important tool in the fight for choice in education, and PLF is excited to defend these plans in courts across the country.

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