Supreme Court Rules Arizona Taxpayers Lack Standing To Challenge Tax Credit System Used To Award Religious-Based Scholarships
(Updated)
FOR IMMEDIATE RELEASE
CONTACT: (212) 549-2666; media@aclu.org
WASHINGTON – In a 5-4 decision, the U.S. Supreme Court ruled today that Arizona taxpayers represented by the American Civil Liberties Union and the ACLU of Arizona lack standing to challenge a state tax program that uses state funds generated by tax revenues to award scholarships on the basis of religion.
The majority decision rests almost entirely on the distinction between tax credits and direct government expenditures. But, as Justice Kagan pointed out in a lengthy and vigorous dissent, “cash grants and targeted tax breaks are means of accomplishing the same government objective – to provide financial support to select individuals or organizations.”
“Today’s decision ignores precedent, defies logic and undermines the role of the courts in preserving the core constitutional principle that government may not subsidize religion,” said Steven R. Shapiro, Legal Director of the ACLU.
Under the challenged program, Arizona scholarships are awarded by School Tuition Organizations (STOs). These organizations are certified and closely supervised by the state and financed exclusively by state income tax revenues. Individuals can contribute up to $500 to a STO, and couples can contribute up to $1,000, and receive a tax credit for their entire contribution. As a result, the cost of the contribution is borne entirely by the state's general fund. As one of the STOs describes the program, “Imagine giving [charity] with someone else’s money…stop imagining. Thanks to Arizona tax laws you can.”
“Unfortunately, today’s decision may encourage state legislatures seeking to subsidize religion without judicial review,” said Paul Bender, a law professor at Arizona State University’s law school and former U.S. Deputy Solicitor General who served as lead counsel for the plaintiffs and argued the case in the Supreme Court.
Since its passage in 1997, the tuition tax credit scheme has been dominated by religious discrimination. More than half of the over $50 million awarded by STOs in 2009, for example, was awarded by STOs that required students to attend religious schools in order to receive scholarships. The Arizona Christian School Tuition Organization, a petitioner in this case, states that its goal is “to further Christian education by effectively implementing the provisions of [the program] for the benefit of Christian school students and their families.”
“The majority decision relies on a distinction between tax credits and direct government spending,” said Daniel Mach, Director of the ACLU’s Program on Freedom of Religion and Belief. “In fact, they are merely two sides of the same coin, as both politicians and economists have long understood.”
“By elevating form over substance, today’s decision diminishes the protections of the Establishment Clause,” said Dan Pochoda, Legal Director of the ACLU of Arizona.
Attorneys on the case, Arizona Christian School Tuition Organization vs. Winn, include Bender; Shapiro and Mach of the ACLU; Pochoda of the ACLU of Arizona; and Isabel M. Humphrey of the Phoenix law firm Hunter, Humphrey and Yavitz, PLC.
For the Supreme Court’s opinion in this case, please visit:
For more information on this case, please visit:
Update - The headline and first paragraph were slightly changed after release: The original headline was "Supreme Court Rules Arizona Taxpayers Lack Standing To Challenge Tax Credit System Used To Fund Religious-Based Scholarships" and the last sentence of the first paragraph read "…tax revenues to fund scholarships on the basis of religion."