• Heritage Action
  • More

Parental Choice in Education and Whether Tax Credits Serve to Establish a Religion

Berkeley Law School Federalist Society
November 22, 2010
Becky Norton Dunlop

Our topic today is parental choice in education and whether tax credits, particularly in Arizona, serve to establish a religion.

I am going to offer some comments on the Arizona Tax-Credit program and on the broader question of parental choice in education – coming to these thoughts from – as you might suspect – a conservative view point.

Arizona Christian School Tuition Organization v. [Kathleen M.] Winn asks “[Whether or not] the [Ninth circuit] court of appeals err[ed] in holding that if most taxpayers who contribute to school tuition organizations contribute to organizations that award scholarships to students attending religious schools, that the [Arizona “Scholarship Tax Credit Program”] has the purpose and effect of advancing religion in violation of the Establishment Clause.”1 In other words, Arizona taxpayers can donate to an organization that provides scholarship funding for students to attend private schools, which may or may not be religious, and then claim that donation as a credit on their taxes.

The argument from the respondent, Kathleen Winn’s, side of the case is that because most of these scholarships assist students in attending an explicitly religious institution, the tax credit program effectively uses public funds, intentionally constrains private choice, and therefore violates the Establishment Claus of the first amendment. Before confronting this assertion however, let’s take a closer look at the program itself:

“Arizona’s Scholarship Tax Credit Program began in 1997, and…allows taxpayers to claim a dollar-for-dollar credit of up to $1,000 for married couples [($500 for individuals)] off their state income taxes for contributions to non-profits known as school-tuition organizations. By law, these organizations, or STO’s must spend at least 90 percent of contributions on scholarships and must offer them to students at more than one school. …The program has grown steadily and was [eventually] expanded to include corporate-tax credits. There are now [between 50 and 55] STO’s [in the state taking] in more than $399 million through 2009.

[In 2009, Arizona’s]…program provided 27,000 scholarships to 373 secular and religious private schools, overwhelmingly for children who could not otherwise afford to attend. Until recently, [as a matter of fact], scholarship eligibility was not means-tested, but according a study by the Pacific Research Institute, 67% of all scholarship recipients would qualify under a similar program that did measure families’ financial situations.

The only evidence plaintiffs presented to show the claimed disadvantage of secular parents was that most of the scholarship funds have been distributed by religious organizations. That is not dispositive. To prove that secular parents were at a disadvantage…, plaintiffs would have to show that secular parents were being rejected by scholarship programs at a higher rate than religious parents, or…at the very least, the share of religious-only scholarship funds was higher than the share of parents seeking religious schooling. That, as it turns out, was not the case in the 1998-1999 school year (the first year of the program), for which plaintiffs provided data, and it is not true today.

In 1998-99, about 75.5 percent of private school children were in religious schools, but only 75 percent of (the very tiny amount of) scholarship funds distributed in that year were reserved for religious schooling.

In 2007-08 (the most recent year for which data are available), 81.4 percent of private school students were in religious schools, but only 65 percent of the donated scholarship funds in 2008 were reserved for religious schooling.

There is thus no evidence that secular parents are any more likely to be turned away for a scholarship than are religious families, because the share of scholarship funds available for use at secular schools is now nearly twice as large as the share of children being enrolled in secular schools.” If anything, the religious schools have a more legitimate claim to being treated unfairly by the distribution.

Tim Keller from the Institute for Justice, for example, notes that “Arizona leads the nation in offering parents educational choice. It has more charter schools per capita than any other state. It operates magnet schools, runs an online ‘virtual’ public school, offers open public-school enrollment and gives wide latitude to families that home school. Many school districts have opened ‘back-to-basics’ traditional academics. Moreover, because tax-credit-funded scholarships do not cover the entire cost of tuition, the financial incentives tip sharply in favor of public schools. Given all of the available nonreligious options, including nearly 100 nonreligious private schools, it is ridiculous to suggest that families are coerced by the state into choosing religious schools.”

The lack of evidence supporting the idea that secular parents are at a disadvantage also highlights another important questions related to this case: that of “stand.” In other words, can the plaintiffs legitimately claim to have been injured by the law itself? Have their rights and liberties somehow been violated by giving tax credits for donations to STOs? In fact, Adam Liptak in the New York Times points out that, “Whether or not the challengers to the Arizona Law have standing could be the most significant impact of the ruling in this case – ‘As a general matter, plaintiffs who merely object to how the government spends their taxes do not have standing. But the Supreme Court made an exception for religious spending in 1968 in Flast v. Cohen.”

“[But] Arizona…said that the exception should not apply where tax credits rather than direct government spending were at issue. ‘If you placed an electronic tag to track and monitor each cent that the respondent plaintiffs pay in tax, not a cent, not a fraction of a cent, would go in any religious school’s coffers,’ said Neal K. Katyal, the acting United States solicitor general. ‘Flast v. Cohen recognized a special solicitude for taxpayers when money is taken out of their pocket and used to fund religion against their conscience,’ Mr. Katyal said. But this is as far as the exception should go…”

The issue of standing then can only be answered after determining whether or not tax-credits are the same as government funding. “Paul Bender, [an Arizona State University professor] representing the [plaintiffs],…said the dollar-for-dollar nature of the tax credit meant that the scholarship money effectively came from the state.”

At least two justices noted this argument. Justice Scalia said: “[It’s] a great leap to say that [donations offset by tax-credits] are government funds, that any money the government doesn’t take from me because it gives me a deduction is government money…[these funds have] never been in the government’s coffers. The government has declined to take this money.”

Justice Alito followed pointing out to Mr. Bender the philosophical importance of his argument asking “[Do] you think that all the money belongs to the government – except to the extent that it deigns to allow private people to keep some of it?’ Bender proceeded to argue that if the government imposes an income tax, and people owe the government says you don’t have to pay it to us, you can pay it to an STO, and that is a payment of government funds.” Scalia immediately recognized the point of this statement, explaining that the whole point of tax-credits is that “[the taxpayers don’t woe [money] to the government if they have made this contribution.”

Saying that money, originating with an individual tax-payer, which the tax-payer then designates as a donation to be offset by a tax-credit is government money subject to Constitutional restrictions is exceptionally problematic, and I for one am thankful that at least two justices seem to recognize this. The government never has possession of the money, never budgets the money…as a matter of fact the program saves the government – and by extension the taxpayers – money. The largest credit allowable to a married couple is $1,000, but for every student in an Arizona public school, it costs the state, local, and federal governments an average of $7196 per student. So every student attending a private school on a scholarship saves the state $6196/person if you accept the argument that tax-credits are somehow public funds, but saves the state the full $7196 on average if you adopt the more reasonable view that tax-credits are private money.

Let me pause here for a moment and summarize my points thus far. First, is the alleged disproportionate tendency for private Arizona tuition scholarships to assist religious schools indicative of a bias against non-religious schools? The answer of course was no. There is no evidence to suggest that the program itself constrains private choice. Instead, it treats equally the donations made to religious and non-religious STOs, and equal treatment is not the same as the establishment of religion. It is also very difficult, if not impossible, to understand how anyone could twist the language of the statute in question to be anything but religiously neutral.

The STOs are private organizations, funded privately by individuals who can choose whatever STO they wish. The government does not interfere in any way with individual choice, other than to encourage the donations themselves through tax credits. The program provides the exact same incentives to donate to religious STOs as non-religious ones. The argument, therefore, that the program violates the establishment clause of the first amendment lacks substance.

Second, we confronted the question as to whether or not the plaintiffs has standing in the first place, which essentially requires on to determine if tax-credits are the same as government funding. I find this argument absurd as well. How can money which never even enters the treasury be considered as public funds? If STOs were public institutions, if tax-payers sent their money to the state and then the state distributed the money itself, then the plaintiffs might have standing. Fortunately, that is not the case.

Another related question is whether or not a citizen who simply objects to a policy or law, but has not been injured by the law or policy, has standing? As Americans we cherish the ability to disagree, debate, and object to policies we take issue with. This is one reason why we have elections, lobbyists, and grassroots organizations. But when these kinds of objections find their way to the courts, the subsequent rulings on these matters frequently result in judicial activism at odds with the constitutional role of the courts. If the taxpayers oppose Arizona’s school choice program, then they have the ability to elect leaders sympathetic to their opposition, but there clearly is no grounds for them to claim they have been “injured.”

Let me talk for a few minutes on whether or not parental-choice program, like Arizona’s, is good policy, good for our nation, and worth defending.

First and foremost, the numbers alone demonstrate that parental choice is better for the children of Arizona. Consider the following:

• “Arizona students are…performing at a college readiness level that exceeds the national average in all SAT subject areas. Scores fir Arizona students during the 2009-2010 school year showed mean Critical Reading scores of 518, compared to 498 nationally; mean Math scores of 526, compared to 511 nationally; and mean Writing scored of 498, compared to 488 nationally.”
• “37% of Arizona students taking the SAT in 2010 were minority students-up from 28.7% in 2005, and 23.5% in 2000. Also, 33.7% of test takers indicated that they are first-generation college goers-an increase of 3% from 2005.”
• “Arizona’s Hispanic and Black students significantly outperformed their national counterparts in all sections of the SAT. Hispanic students outperformed the Hispanic national average in Critical Reading (479 to 454 nationally), and Writing (461 to 448 nationally), Math (485 to 467 nationally), and Writing (461 to 448). Arizona’s Black students [also] far exceeded those of Black students nationally in the same subject areas.

Finally, nationwide, the parental choice programs have given students and parents an escape from underperforming and often dangerous public schools. For example, the federal government’s 2009 Digest of Education Statistics notes that “In 2007-08, about 85 percent of public schools had a criminal incident,…defined as a serious violent crime or a less serious crime such as a fight without weapons, theft, or vandalism…and some 75 percent of schools reported one or more violent incidents, 47 percent reported one or more thefts/larcenies, and 67 percent reported other types of incidents. Overall, there were 4 criminal incidents reported per 100 students [in public schools].” Of course these numbers were significantly higher for students in urban areas, and overwhelmingly lower for students in all kinds of private schools.

Now, it is easy to be conservative and stand behind a program like Arizona’s. But my belief that all children should have access to a quality, safe education transcends my political philosophy. But as a conservative, I do bring a particular set of assumptions and beliefs to the way I answer questions of a case like this and of education in general; not the least of which is a preference for individual freedom and parental choice. How, where, when any why a child receives an education is an extremely important decision, and one that is rightly left in the hands of families. Allowing for more parental choice acknowledges that each child is different, has different needs and motivations, and that those responsible for the child are more adequately equipped to select an appropriate school and environment. There is no one-size-fits-all approach to learning, but schools themselves will never be able to accommodate this diversity as successfully as families can.

Still, the decline of public schools across the United States has presented parents with fewer and fewer quality options at an affordable price. The benefits and safety of private education are out of reach for many of our nation’s children. Yet, a ruling in favor of the respondents in this case would further threaten the freedom of choice and opportunities families already have and would discourage other states from implementing comparable initiatives in the future. Quality, private education would simply be restricted to the rich – something parental choice advocates like myself find unacceptable.

Finally, my conservative values also implicitly inform throughout this conversation a philosophy of education. A conservative does not favor freedom and choice simply for his own sake, but for the opportunity to choose something better, and create new and improved choices when necessary. So what I understand as “better” relative to education will certainly impact the way I evaluate programs like the one in Arizona.

A quote often attributes to Abraham Lincoln, says that “The philosophy of education in one generation will be the philosophy of government in the next.” Posterity requires, therefore, that we give attention to these fundamental concerns:

“In 1790 [Edmund] Burke…said that ‘To make a government requires no great prudence…But to form a free government; that is, to temper together these opposite elements of liberty and restraint in one consistent work, requires much thought, deep reflection, [and] a sagacious, powerful, and combining mind.’”

In other words, a free society requires an educated society. It requires a conscious and deliberate pursuit of truth, an intuition rightly ordered with reality, and a coherent moral philosophy. So we must work to understand not only what is real and what is possible, but also what is right and wrong. Education is a commitment by an individual and those around him or her to pursue knowledge and understanding, not simply for its own sake or even so that one can get job, but to be the very best person you can be. It is not simply a hurdle to be overcome; something for one’s kids to do until they can establish a career. Learning is just as much if not more about one’s character than the ability to pass a test or get an A.

So a quality education recognizes this need in human development to not simply learn equations and the periodic table, but to look to literature, history, philosophy, and the arts for answers about how we ought to live, how to confront difficult moral and philosophical questions, and how to be as fully human as we can be. In sum, a conservative philosophy of education:

• Emphasizes attention to what we can learn from the past
• Encourages a sense of responsibility toward future generations
• And elevates the classroom, wherever it might be, to the role of a partner with families, and with institutions like churches, to a holistic development of the human person, to the preservation of truth, and to maintaining a well-ordered society.

A program which favors parental choice removes the obstacles to an educational environment more conducive to developing the whole person, to an education that makes room not only for questions of math, science, humanities, and the arts, but also questions of character. Of course this need not be an explicitly religious education, or one that imposes a particular moral philosophy across the board, but one that is nonetheless free to ask these questions. Private education has the luxury of being able to more comprehensively engage these questions without political obstacles, and parents have the corresponding opportunity to send their children to an institution sympathetic to their moral preferences. The presence of parental choice, of course, also gives schools the incentive to compete with one another for the best students – thereby encouraging innovation and greater attention to quality.

Public schools may compete as well, but if their goal is greater government funding, then they will be subject to the government’s priorities. While private schools are much more subject to the priorities of the families they serve.

So for the sake of character, safety, and future of America’s children – as well as for the future of our nation and individual liberty as whole – let us hope that the Supreme Court chooses liberty in this case. May their ruling choose freedom for the families to today, and ultimately a better nation for those to come.