News

      In a 5-4 decision, the U.S. Supreme Court has rejected a challenge to a controversial state law that permits tax credits for donations to private schools.  The case involves an Arizona statute, but it has implications for the future funding of public education in Texas and elsewhere. 

      The case of Arizona Christian School Tuition Organization v. Winn began when a group of Arizona taxpayers challenged the constitutionality of a state law that allows a dollar-for-dollar tax credit for people who donate to “school tuition organizations” (STOs).  An individual could get a $500 credit, and a married couple $1000.  Thus a married couple who owed $1000 in state income tax could donate that $1000 to an “STO” instead, and owe nothing in income tax.  The constitutional challenge arose because the money went from the taxpayer to the STO and then to a private school, many of which were operated by religious organizations.  The plaintiffs alleged that this was an indirect means of diverting tax money into the hands of religious organizations in violation of the First Amendment.

      The Supreme Court held that the taxpayers lacked “standing” to pursue the suit.  The Court did not reach the merits of the controversy, but simply held that being a taxpayer was not a sufficient basis to support a federal lawsuit.   Much of the argument between the five justices in the majority and the four in the minority involved the application of the “taxpayer standing” rule and its exceptions, based on earlier case law.

       Thus the case addresses technical legal issues more than the constitutional issue of state support for religious organizations. But the result of the case has vast implications for public policy.  If taxpayers cannot challenge tax credit programs like Arizona’s it is difficult to see who could.  This is the essence of the dissenting opinion by Justice Kagan who predicts that the holding of the case “will prevent federal courts from determining whether some subsidies to sectarian organizations comport with our Constitution’s guarantee of religious neutrality.”