Education Funding

Court Takes Ariz. Tax-Credit Case

By Caroline Hendrie — October 08, 2003 2 min read
  • Save to favorites
  • Print

In a move of potential significance in the national debate over public funding for religious education, the U.S. Supreme Court agreed last week to accept an appeal arising from a constitutional challenge to an Arizona law that offers tax credits for donations to scholarship funds for private schools.

Four Arizona taxpayers sued the state over the 1997 law, which lets individuals claim state income-tax credits of up to $500 a year by contributing to organizations that provide tuition scholarships for religious and other private K-12 schools. The suit contends that the law violates the First Amendment’s prohibition against a government establishment of religion.

A U.S. District Court judge in Phoenix threw out the case on jurisdictional grounds, determining that state court systems are the proper place for such fights over state taxes. That ruling was overturned on appeal, however, and now the question before the nation’s highest court in Hibbs v. Winn (Case No. 02-1809) is not whether the tax-credit law is itself constitutional, but whether the opponents can properly challenge it in federal court.

Joining Arizona in arguing that the plaintiffs should be shown the door are 25 other states, which filed a friend-of-the-court brief urging the high court to overturn an October 2002 ruling of the U.S. Court of Appeals for the 9th Circuit, in San Francisco.

“We think that the case is very important to all the states because it is a states-rights issue involving challenges to state taxes,” said Joseph Kanefield, a special assistant attorney general who is handling the case for Arizona. “We think it’s good policy for those challenges to be heard in state courts, not in the federal courts.”

But a lawyer representing the law’s challengers said the state is trying to protect itself by twisting the meaning of a Depression-era federal law known as the Tax Injunction Act. At the heart of the appeal before the high court is how to interpret that 1937 law, which says federal courts cannot “enjoin, suspend, or restrain the assessment, levy, or collection of any tax under state law,” as long as “a plain, speedy, and efficient remedy may be had” in that state’s courts.

“Congress did not intend the Tax Injunction Act to apply to a situation like this, where the issue is the establishment clause [of the First Amendment] and giving tax credits that benefit religious institutions,” said Marvin S. Cohen, the plaintiffs’ lawyer, who is based in Scottsdale, Ariz.

In an earlier challenge to the program, the Arizona Supreme Court ruled in 1999 that it did not violate state or federal constitutional provisions against government aid to religion.

Advocates of the tax credits are hopeful that the Supreme Court will put an end to the protracted litigation, and thus encourage lawmakers elsewhere to replicate the program. The justices agreed on Sept. 30 to accept the case, and arguments are expected early next year.

Arizona is among three states that offer some form of tax breaks for donations to groups that provide tuition scholarships for K-12 students. State records show that 50,191 Arizona taxpayers claimed credits totaling more than $25 million last year, with donations going to dozens of scholarship organizations.

The leading recipient was the Catholic Tuition Organization of the Roman Catholic Diocese of Phoenix, which was the beneficiary of tax credits worth more than $7.2 million, records show.

Events

This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Law & Courts Webinar
Future of the First Amendment:Exploring Trends in High School Students’ Views of Free Speech
Learn how educators are navigating student free speech issues and addressing controversial topics like gender and race in the classroom.
Content provided by The John S. and James L. Knight Foundation
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Student Well-Being Webinar
Start Strong With Solid SEL Implementation: Success Strategies for the New School Year
Join Satchel Pulse to learn why implementing a solid SEL program at the beginning of the year will deliver maximum impact to your students.
Content provided by Satchel Pulse
Jobs Virtual Career Fair for Teachers and K-12 Staff
Find teaching jobs and other jobs in K-12 education at the EdWeek Top School Jobs virtual career fair.

EdWeek Top School Jobs

Teacher Jobs
Search over ten thousand teaching jobs nationwide — elementary, middle, high school and more.
View Jobs
Principal Jobs
Find hundreds of jobs for principals, assistant principals, and other school leadership roles.
View Jobs
Administrator Jobs
Over a thousand district-level jobs: superintendents, directors, more.
View Jobs
Support Staff Jobs
Search thousands of jobs, from paraprofessionals to counselors and more.
View Jobs

Read Next

Education Funding What America Spends on K-12: The Latest Federal Snapshot
About 93 percent of K-12 spending came from state and local sources in 2019-20—but more-recent year totals will reflect federal relief aid.
2 min read
Education Funding Opinion How You Can Avoid Missing Out on COVID Relief Money
We’re losing the race against the clock to spend ESSER funds, but there are solutions.
Erin Covington
3 min read
Illustration of cash dangling from line and hand trying to grasp it.
F.Sheehan/Education Week (Images: Getty)
Education Funding K-12 Infrastructure Is Broken. Here's Biden's Newest Plan to Help Fix It
School districts will, among other things, be able to apply for $500 million in U.S. Department of Energy grants for HVAC improvements.
2 min read
Image of an excavator in front of a school building.
iStock/Getty
Education Funding Less Funding, Less Representation: What a Historic Undercount of Latinos Means for Schools
Experts point to wide-ranging implications, including how much federal funding schools with large Latino populations will get.
3 min read
Classroom with Latino boy.
Prostock-Studio/Getty