Supreme Court to Consider Montana Religious School Tax Credit

By Mark Walsh — June 28, 2019 4 min read
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The U.S. Supreme Court on Friday agreed to review a decision by Montana’s highest court that struck down a tuition tax-credit program which, as enacted by that state’s legislature, allowed tuition scholarships to benefit students at private religious schools as well as secular schools.

The action came June 28 in a final orders list one day after the formal end of the Supreme Court’s term. The justices will hear arguments the new case, Espinoza v. Montana Department of Revenue(No. 18-1195), in the new term that begins in October.

The Montana Supreme Court ruled 5-2 in December 2018 that the program, which provides a tax credit of up to $150 per year to individuals and corporations that donate to tuition scholarship organizations, violates the state constitution’s provision barring government aid to “sectarian schools.” The state high court said that the tax-credit program could not be saved by a rule adopted by the state revenue department that excluded private religious schools from participation.

The state high court said that the Montana Constitution “more broadly prohibits ‘any’ state aid to sectarian schools and draws a more stringent line than that drawn by” the U.S. Constitution’s prohibition against government establishment of religion.

“Therefore, the sole issue in this case is whether the Tax Credit Program runs afoul of Montana’s specific sectarian education no-aid provision, Article X, Section 6,” the majority in the Montana high court said. “The legislature’s enactment of the Tax Credit Program is facially unconstitutional and violates Montana’s constitutional guarantee to all Montanans that their government will not use state funds to aid religious schools.”

The dissent in the state high court said the scholarship funds never truly become public funds because they are donated to private scholarship organizations, and thus the inclusion of religious schools as beneficiaries does not violate the state constitutional bar against indirect aid to religion.

The Institute for Justice, an Arlington, Va.-based legal organization representing religious school families who would have benefited from the tax-credit program appealed the decision the U.S. Supreme Court.

“This case raises the question of whether government may bar religious options from otherwise neutral and generally available student-aid programs,” said the group’s appeal.

“With this decision, the Montana court further deepened the long-standing split on whether barring religious options from student-aid programs violates the federal religion and equal-protection clauses,” the appeal continues. “This split has matured over the last 24 years and now includes 10 federal circuit courts and state courts of last resort.”

The families represented by the institute, in their suit that challenged the revenue department rule that sought to save the tax-credit program by barring religious schools, allege that there was anti-Catholic sentiment behind the inclusion of the no-aid-to-sectarian-schools provision in Montana’s 1889 Constitution.

These provisions are known as Blaine amendments, after James Blaine, a 19th Century U.S. representative and senator from Maine who in the 1870s, introduced a federal constitutional amendment to bar public school funding from being used for the schools of any “religious sect or denomination.”

The federal amendment failed, but 37 states adopted their own Blaine amendments, the Institute for Justice brief says. Montana in 1972 adopted a new constitution, which kept language barring direct and indirect aid to religious institutions.

The U.S. Supreme Court has recently been skeptical of state programs that exclude religious institutions from general aid programs, but it has left open the question of how it would analyze such aid to religious schools.

The Trump administration did not weigh in on the Montana case, but it recently filed a brief in a related case in Maine in support of three families seeking to require the state of Maine to pay tuition for their children to attend religious high schools.

Both the Maine and Montana cases rely heavily on the U.S. Supreme Court’s 2017 decision in Trinity Lutheran Church of Columbia, Mo. v. Comer, in which the justices said Missouri violated the free-exercise clause when it denied the church’s participation in a state playground-improvement program. The Trinity Lutheran decision has been the subject of much debate over how much it bolsters those seeking to require state school choice programs to include religious schools.

The Institute for Justice and its clients received the support of friend-of-the-court briefs from school choice advocates and other groups.

In a brief that had urged the justices not to take up the case, the Montana revenue department said the 1972 state constitution’s language barring state aid to religious schools is meant to support a strong public school system.

“Petitioners claim the United States Constitution requires the state to administer a scholarship program that would aid private education, religious and nonreligious alike, in a manner the court below has held to be beyond the state’s delegated powers,” the state brief said.

Under the U.S. Constitution’s religion clauses, the state said, “Montana may offer generally available subsidies to religious education, or no subsidies at all.”

A version of this news article first appeared in The School Law Blog.