Tuition Tax Credits Are Challenged in Iowa

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A group of Iowa taxpayers has asked a federal district court to strike down a new state law that allows parents to claim income-tax credits and deductions for tuition and other expenses at public and private schools.

In papers filed in U.S. District Court in Des Moines on Oct. 21, the taxpayers, who are being represented by Americans United for Separa4tion of Church and State, contend that the law violates both the First and 14th Amendments to the U.S. Constitution.

State lawmakers passed the measure in May in a move that escaped national attention at the time. Passage of the act made Iowa only the second state to adopt such a program. (See Education Week, May 20, 1987.)

The measure was patterned on Minnesota's program of tax deductions for tuition and other expenses at private and public schools. The U.S. Supreme Court upheld the constitutionality of that program in a landmark ruling in 1983.

Under the Iowa program, parents will be allowed to claim an income-tax credit of 5 percent on the first $1,000 spent, per child, for tuition and textbook fees in a private or public school--in effect, up to $50 per child.

Or, if the parents itemize their tax deductions, they could deduct from their tax liability up to $1,000 per child for such expenses. Families with adjusted gross incomes above $45,000 would not be eligible for the tax breaks.

The Iowa Planning Agency has estimated that the program will cost the state a total of $3.2 million in the current fiscal year. As in Minnesota, the credits and deductions are expected to disproportionately benefit families with children in private schools, which account for approximately 10 percent of the state's total enrollment of 529,000.

Group's Charges

In their suit, the Iowa taxpayers argue that the law violates the First Amendment's ban on state establishment of religion because its purpose and primary effect are to subsidize schools in which "religion permeates the total school curriculum."

They also claim that the law results in impermissible endorsement of "certain, but not all, religious education ministries," resulting in "political divisiveness."

In addition, they contend that although the law permits credits and deductions only for those expenses that "do not relate to the teaching of religious tenets, doctrines, or worship," it would be impossible to enforce that provision without creating excessive and unconstitutional entanglement between church and state.

The group also notes that families with children enrolled in church-affiliated schools that refuse to be licensed by the state on religious grounds would be prohibited from claiming the deductions or credits. "Thus, a substantial number of parents sending their children to nonpublic schools will be denied public benefits ... because of their religious beliefs," they argue.

The taxpayers claim that the law also violates the 14th Amendment because many of the church-affiliated schools that would benefit from the tax breaks restrict admission on religious grounds, charge greater tuition for non-adherents, and discriminate in hiring on the basis of religion. To that extent, the group claims, the law denies persons affected by such policies equal protection under the law.

A spokesman for Gerald D. Bair, director of the state department of revenue and finance and the named defendant in the case, said the agency had no comment because it had not received a copy of the complaint as of late last week.

Vol. 07, Issue 08

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