According to an article by Adam Liptak in yesterday’s New York Times, the Supreme Court has just heard arguments relating to an Arizona law that gives a tax credit for contributions to private “tuition organizations.” Mr. Liptak puts it succinctly:
The program at issue on Wednesday gives Arizona taxpayers a dollar-for-dollar state tax credit of up to $500 for donations to private “student tuition organizations.” The contributors may not designate their dependents as beneficiaries. The organizations are permitted to limit the scholarships they offer to schools of a given religion, and many do [over 90 %, according to a press release from Americans United].
The program was challenged by Arizona taxpayers who said it effectively used state money to finance religious education and so violated the First Amendment’s prohibition on the official establishment of religion.
Mr. Liptak does not mention that, according to Americans United, parents are donating to each other’s children, and much of the tax expenditure goes to prosperous families even though the program was supposedly designed for poor or minority students.
At any rate, these “tuition organizations” remind me of nothing more than the segregation academies that sprang up the southern states of the US in response to school desegregation. These academies were private schools operated with public funds (where have we heard that before?). According to the redoubtable Wikipedia, parents sued the IRS for granting tax exemptions, but the Supreme Court in 1984 ruled that they did not have standing to sue.
Mr. Liptak notes that in general taxpayers do not have standing to sue just because they object to the way tax money is being spent. He adds, however, that the Court also granted a religious exemption to this general rule. Hence, the major issue before the Court is whether the Arizona taxpayers have standing to sue.
Arizona, supported by the Obama administration, argues that the religious exemption does not apply because the law grants a tax credit, rather than a direct expenditure by the government. Talk about a distinction without a difference, but the case may hinge on just that distinction.
I know the old saw about prediction being difficult, but in this case it may be easy: If the case is thrown out, then we may expect to see more bills granting tax breaks to tuition organizations in more states in the future.