Tax credit said to promote religion

By Erika DeLeo
Staff Writer

In Arizona, private schools will continue to benefit from a controversial tax credit that some say allows the government to endorse religion on the taxpayers’ dime.

The credit allows people to donate to School Tuition Organizations (STOs), which then give the money to students for private school tuition. The following year, these contributors receive a dollar-for-dollar break on their income taxes.

“Private school was a dream,” Glenn Dennard told PBS in November 2010. The Dennards, a disadvantaged family in Phoenix, were able to send all of their five children to private school because of the credit. Three of them have gone on to college.

Supporters of the program say it saves the state money and provides more options for low-income families. Opponents say the tax credit promotes religious education and even limits school choice for parents. Officials maintain that the goals of the credit are purely secular.

On Nov. 3, 2010, a group of Arizona taxpayers brought Arizona Christian School Tuition Organization v. Winn before the U.S. Supreme Court. They claimed the Arizona Tuition Tax Credit violated the First Amendment’s Establishment Clause, which states: “Congress shall make no law respecting an establishment of religion.”

On April 4, 2011, the court ruled to dismiss the case. The decision left the tax credit, which has been in effect since 1997, unchallenged. The ethics behind the program were not fully explored in court.

David A. Cortman, attorney for Arizona’s largest STO, delivered his reasoning for why the taxpayers do not have standing to sue, and why the credit does not violate the clause. In order to make a charge that the clause is being violated, the plaintiffs must prove that the state is purposely favoring religion. “There must be no secular purpose,” according to the law. The group of judges who heard the case found that the state aims to increase access to all private schools, and that they have no system in place favoring religious schools.

The second qualification for violation is that the government must be the one who endorses religion. According to Cortman, the case does not violate the clause. “It allows private citizens, in fact, all taxpayers, then private STOs, and then parents to make the decisions.” He commented further that private choice to favor religion does not undo the government’s original secular intent.

Francisco M. Negrón, general counsel for the National School Boards Association, spoke on behalf of the plaintiffs. He stated of the Tuition Tax Credit, “The program lacks such notable features of true reform-minded choice programs,” that is, ones that aim to serve disadvantaged students. He said it does not give parents a real choice; if they want their child to receive a scholarship, they may have to go to a religious school because that is where most of the funding lies.

Negrón said, “Its primary purpose is to provide public resources to private, mostly religious schools and the students already attending them.” He calls the program unconstitutional for this reason. “This bad education policy deprives public schools of scarce school funds.” He cites that since 1997, about $350 million dollars have been kept from the State Treasury due to this program.

The plaintiffs claimed the credit resulted in a “reduction in the state revenue.” Indeed, one Jewish STO in Phoenix advertises, “With Arizona’s scholarship tax credit you can send children to our community’s Jewish day schools and it won’t cost you a dime!”

Aaron Long, principal of the Prescott Adventist Christian School, said donations account for six to eight percent of the school’s budget, and most of these funds come from those who are associated with the church.

Dr. Charles M. North, economics professor at Baylor University in Texas, conducted research on the tax credit in 2009. He conservatively estimated that almost 12,000 students could attend private schools in Arizona only because of the scholarships, and to educate them in the public system would cost the state $99.8 million per year, almost twice as much as would pass through private hands in the program.

Opponents of the program disagree with this financial argument. Rep. David Schapira, D-Tempe, spoke out against the tuition tax credit in December 2009. He said tax money is wrongfully going to STOs, some of which are hoarding funds. He said some organizations told him they had millions of dollars in the bank that they could not spend because there were not enough children to distribute it to. “That’s millions of dollars that should be in the state general fund paying for some of vital services that we’ve been cutting for the last two years.”

Cortman responded that the economic argument is “speculative.” Conversely, the tax credits could increase state revenue. The state saves money on public school expenses, and “it increases other economic activity in the private school: ordering books, hiring teachers, expanding facilities …”

State Senator Kyrsten Sinema, D-Phoenix, recalled that when Congressman Trent Franks introduced this legislation, his goals were to help ethnic minorities and those with low income. “Unfortunately, the legislature hasn’t actually done that, and when we’ve tried to do amendments to make that happen, we’ve been rebuffed.

This article appeared in the May 2011 print edition of The Raven Review.

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