Education

U.S. Supreme Court Rejects Ban on Tax-Credit Scholarships for Religious Schools

By Mark Walsh — June 30, 2020 3 min read
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A sharply divided U.S. Supreme Court on Tuesday ruled that a Montana state constitutional provision barring aid to religion discriminated against religious schools and families seeking to benefit from a tax credit for donations for scholarships.

“Montana’s no-aid provision bars religious schools from public benefits solely because of the religious character of the schools,” Chief Justice John G. Roberts Jr. wrote for the court in a 5-4 decision. “The provision also bars parents who wish to send their children to a religious school from those same benefits, again solely because of the religious character of the school.”

The decision came in Espinoza v. Montana Department of Revenue (Case No. 18-1195), which involves a $150 state tax credit for contributions to funds that provide scholarships for students to attend private schools, including religious schools.

The chief justice’s opinion was joined by Justices Clarence Thomas, Samuel A. Alito Jr., Neil M. Gorsuch, and Brett M. Kavanaugh, with Thomas, Alito, and Gorsuch filing concurring opinions.

The court’s more liberal members issued or joined three separate dissents, offering different grounds.

Justice Ruth Bader Ginsburg, in a dissent joined by Justice Elena Kagan, said there was no burden put on the First Amendment free exercise of religion rights of the parents or religious schools in the case.

Justice Stephen G. Breyer wrote a dissent, joined by Kagan in part.

Justice Sonia Sotomayor, in a dissent for herself, said the majority was wrong to decide the merits of the case because the tax credit program was struck down by the Montana Supreme Court in its entirety.

“Today’s ruling is perverse,” Sotomayor said. “Without any need or power to do so, the Court appears to require a State to reinstate a tax-credit program that the Constitution did not demand in the first place.”

Montana’s Prohibition

Montana’s revenue department, which administers the tax credit, issued an administrative rule that barred the scholarships from being used at religious schools. It cited a state constitutional provision that says the state “shall not make any direct or indirect appropriation or payment from any public fund or monies ... for any sectarian purpose or to aid any church, school, academy, seminary, college, university, or other literary or scientific institution, controlled in whole or in part by any church, sect, or denomination.”

Montana is among 38 states that have state constitutional provisions that bar aid to religion. Some call these measures “baby Blaine” amendments after the federal Blaine amendment, introduced in Congress in 1875 by James G. Blaine, then a member of the House of Representatives from Maine.

The amendment would have made the U.S. Constitution’s bar on government establishment of religion applicable to the states and declared that no state tax money “shall ever be under the control of any religious sect.”

Although the federal measure failed, more than 20 states subsequently adopted state constitutional measures that in some form or other bar government aid to religious denominations and religious schools.

Montana’s rule limiting the scholarships to secular private schools was challenged as a violation of the free-exercise clause of the U.S. Constitution by parents who sought to use the scholarship aid at religious schools.

The Montana supreme court in 2018 invalidated the entire tax-credit program, for both religious and nonreligious schools, based on the state constitutional provision. But it stayed its decision, and money from scholarship contributors claiming the tax credit in the 2018 tax year was used by a private organization to give $500 scholarships to about 40 families during the 2019-20 school year.

Education Week will update its coverage of this decision later today.

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