Judge Upholds Iowa Tax Breaks for Private-School Parents

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Iowa's program of tax deductions and credits for parents who send their children to private schools does not violate the U.S. Constitution's ban on government establishment of religion, a federal judge has ruled.

A 1987 state law authorizing the tax breaks had been challenged in a federal lawsuit by a group of taxpayers with the backing of Americans United for Separation of Church and State, a national advocacy group.

The plaintiffs charged that the tax deductions and credits for private-school tuition and textbooks violated the Establishment Clause of the First Amendment, since the program mostly benefits parents of students in religious schools.

U.S. District Judge Harold D. Vietor of Des Moines ruled March 17, however, that the Iowa program was "substantially similar'' to a Minnesota tax-deduction plan for private-school parents that was upheld by the U.S. Supreme Court in 1983.

"The Iowa deduction/credit law does not create any kind of direct aid to parochial schools, nor does it create any kind of relationship between the state government and the parochial schools,'' Judge Vietor wrote in his opinion in Luthens v. Bair. "The sole relationship involved is between the state and its taxpayers.''

Under the Iowa statute, parents may claim a deduction of up to $1,000 per child for private-school tuition and textbooks. Taxpayers who do not itemize their returns may take the benefit in the form of a tax credit.

Religious Instruction at Issue

One wrinkle of the Iowa law is that it requires taxpayers to figure out how much of their children's private-school tuition goes to support religious instruction or extracurricular activities. The tax deduction does not cover those activities, so taxpayers must prorate their tax benefits accordingly.

The plaintiffs argued that this provision would require state authorities to closely monitor the classroom activities of religious schools to verify the claims made by taxpayers. That would create an excessive entanglement between government and the church schools in violation of the Supreme Court's legal test for analyzing church-state issues, they argued.

Furthermore, most religious private schools in Iowa are associated with the Roman Catholic Church, which incorporates religious values throughout the curriculum, the plaintiffs contended.

But Judge Vietor said the Iowa Department of Revenue and Finance, the defendant in the case, does not need to monitor or inspect private-school classrooms to enforce the law's proration provision.

The taxpayer, not the school, must answer any questions about the deduction, he noted. The likelihood that church records would be reviewed to substantiate such claims is no greater than for cases in which a taxpayer claims a deduction for a charitable contribution to a church, he said.

Moreover, the fact that church-affiliated schools incorporate religious values "into the teaching of a subject does not change the subject into a religious indoctrination subject,'' Judge Vietor maintained.

Some 35,000 Iowa taxpayers out of a total of 1.2 million claimed either the deduction or tax credit in 1987, the judge said.

Rob Boston, a spokesman for Americans United, said the decision may be appealed.

Vol. 11, Issue 28, Page 18

Published in Print: April 1, 1992, as Judge Upholds Iowa Tax Breaks for Private-School Parents
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