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Symposium: Justices to consider dispute over tax credits for scholarships

Two years ago, the Supreme Court ruled that Missouri’s policy of excluding churches from a program to provide grants to resurface playgrounds violated the Constitution. In a footnote in their opinion in Trinity Lutheran Church v. Comer, the justices emphasized that their decision was limited to the facts before them and did “not address religious uses of funding or other forms of discrimination.” This winter, the justices will return to the question that they left open in Trinity Lutheran, when they review a decision by the Montana Supreme Court invalidating a tax-credit program because the scholarships created by the program could be used at religious schools. The impact of the justices’ eventual ruling could be significant: According to one “friend of the court” brief supporting Espinoza’s petition for review, 18 other states have similar tax-credit scholarship programs.

The Montana legislature created the scholarship program at the heart of the dispute in 2015. The program provides a dollar-for-dollar tax credit of up to $150 for individuals and businesses who donate to private scholarship organizations. The money donated to the scholarship organizations is used to provide scholarships for children to attend private schools – the vast majority of which, in Montana, are religious.

Soon after the tax-credit program was created, the Montana Department of Revenue issued a rule that bars families from using the scholarships at religious schools. The department indicated that the rule was necessary to comply with the state constitution’s ban on aid for churches and religious schools.

Three low-income mothers who say they were “counting on” on the scholarship money to be able to keep their children in a Christian school in Kalispell, Montana, went to state court in 2015. They argued that barring religious schools from the scholarship program would violate the federal constitution. The trial court agreed with them, but the Montana Supreme Court reversed.

The Montana Supreme Court concluded that the tax-credit program violated the state constitution because it allowed families to use scholarships at religious schools. The state court reasoned that because “[r]eligious education is a rock on which the whole church rests,” giving a tax benefit to a religious school is no different from giving the church itself a benefit, and it rejected the plaintiffs’ suggestion that its interpretation of the state constitution would violate the federal constitution. The plaintiffs went to the U.S. Supreme Court, which agreed in June to hear their case.

In their brief on the merits, the plaintiffs again argue that banning the use of scholarship money for religious schools violates the federal constitution. As a general matter, they contend, the Constitution’s free exercise clause (which protects the right to practice one’s religion), establishment clause (which bars the government from favoring one religion over another), and equal protection clause (which prohibits the government from treating similarly situated individuals differently) “all demand that the government show neutrality—not hostility—toward religion in student-aid programs.” But barring scholarship funds from being used for religious schools “in otherwise generally available student-aid programs rejects that neutrality and shows inherent hostility toward religion.”

The plaintiffs add that the state constitutional provision on which the Montana Supreme Court relied to invalidate the tax-credit program also “raises serious” federal constitutional concerns. The provision is what is known as a “Blaine Amendment,” they explain, one of many adopted around the country in the 19th century to restrict funding for Catholic schools and funnel students to public schools. The U.S. Supreme Court does not need to strike down the provision to rule for them, the plaintiffs assure the justices, but the justices should not allow the Montana Supreme Court to hide behind the provision to invalidate the scholarship program.

In its brief opposing review, the state stressed that there is “room for play in the joints” between the free exercise clause and the establishment clause: The Supreme Court has made clear that a state can choose not to fund religious groups without violating the free exercise clause. And this case goes beyond Trinity Lutheran and playground resurfacing, the state added, because the plaintiffs in this case would use the scholarship money for religious education. But in any event, the state pointed out, there is no violation of the free exercise clause because the Montana Supreme Court struck down the entire tax-credit program, so that scholarships will not be available for students to attend any private schools – religious or secular. Similarly, the state continued, the tax-credit program cannot violate the equal protection clause if no one can use it.

The vote in Trinity Lutheran was not a particularly close one: Justice Elena Kagan joined Chief Justice John Roberts’ majority opinion in full, while another of the court’s more liberal justices, Stephen Breyer, agreed with the result in the case. If, as many believe, the decision reflected the chief justice’s penchant for a narrow ruling with broad support, it may be harder for him to achieve consensus this time around, particularly when more is arguably at stake.

This post was originally published at Howe on the Court.

Recommended Citation: Amy Howe, Symposium: Justices to consider dispute over tax credits for scholarships, SCOTUSblog (Sep. 16, 2019, 10:14 AM),