The Impact of Mueller: New Options for Policymakers

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Earlier this summer, in Mueller v. Allen, the U.S. Supreme Court mustered a five-member majority to uphold Minnesota's allowance of income-tax deductions for the cost of tuition and related education expenses. Under Minnesota law, education expenses are deductible regardless of whether a child attends a public school, a nonpublic parochial school, or a nonpublic secular school.

The Court applied the three-part test it traditionally uses for cases involving a possible unconstitutional establishment of religion. The test was passed: The law was untainted by a purpose of aiding religion, the law did not have a primary effect of aiding religion, and the law did not promote excessive entanglement between church and state. Minnesota convinced the Court that its purpose was to ensure a well-educated citizenry and to relieve the burden on the public schools.

The "effects" element of the test is usually the downfall of most state programs to assist nonpublic schools, but in Mueller the Court did not find that the Minnesota law resulted in direct financial benefits to private schools. Rather, the Court said, it produced only "attenuated financial benefits" for parochial schools from the neutrally available tax benefits granted to all individuals in the state.

And although some laws challenged as violations of the prohibition against the establishment of religion have failed the "entanglement" test, the only aspect of the Minnesota system that could plausibly raise a problem of entanglement was that the state reviewed textbooks eligible for the tax deduction and disallowed deductions for religious books. This was not sufficient to create excessive church-state entanglement, the Court's judgment indicates.

The Minnesota tax-deduction plan also removes barriers to the implementation of other financial means of supporting parents who want to send their children to nonpublic schools, such as education tax credits or direct grants to low-income families. But in Mueller, the Court distinguished Minnesota's method from other, invalid forms of government assistance to nonpublic schools on the basis of the universal availability of the Minnesota tax benefits; parents of public and nonpublic schoolchildren alike were entitled to deduct costs of tuition and textbooks.

The Court's decision does not say anything about the wisdom of such tuition tax-deduction plans, but only removes constitutional barriers to them. And it will, therefore, free other states and the federal government, if they wish, to pursue tax benefits as a vehicle for assisting private education. It is likely that we will see other similar initiatives at the state and federal levels. Many people in those states that have historically sought ways to aid nonpublic schools, such as Ohio, New York, Pennsylvania, and Connecticut, are probably already considering the Minnesota law with a mind to replicating it.

One can conclude that, after Mueller, the Court would accept a system of direct cash grants to parents for tuition costs, if available to both public- and nonpublic-school families. The fact that those attending public school pay tuition in rare cases, such as when a child in one district attends school in another, seems not to be a barrier. Also, there is no difference between credits and deductions under the Court's three-part constitutionality test.

The impact of the Mueller decision on racial equity in education may be quite favorable. Many private schools have excellent records in admitting minority students, and Minnesota's law, which may well become a model for other states, expressly prohibits tax benefits for institutions that discriminate racially. The Minnesota case and another decided this term against Bob Jones University (Bob Jones University v. United States) strongly suggest that even indirect forms of public aid to private schools come with strings, the most important of which will be requirements that racial minorities be treated fairly. Another requirement may be that female students be treated fairly.

But there is another concern--the needs of children whose parents have no income and pay no income tax. These parents have no use for tax deductions or tax credits, so the Minnesota scheme and others like it will do them little good. Instead of tax benefits, the poor need direct cash grants if they are to benefit from the increased educational choice for which tuition tax-credit advocates yearn.

Because public schools do not charge tuition, such cash grants for parents with children in public schools would have to be applied to other educational expenses, such as compensatory education, and this may be expensive.

But if the states and the federal government are sincere about wanting to improve the quality of education in America through expansion of educational choice, then they should design programs that help everybody, not just the rich. Now that the Court has ruled on the constitutionality of government financial aid to parents of students attending nonpublic schools, it is up to policymakers to decide who will benefit from such support.

Vol. 02, Issue 41, Page 24

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