WILL Blog | Hudson: The First Amendment and School Choice – To Fund, or Not to Fund?

Published on: February 1, 2016

“I just don’t feel comfortable with the idea of taxpayers’ dollars going to pay for a student to go to a religious school where students receive a religious education,” declares Joe*, who works in Milwaukee. “That doesn’t seem like a separation of church and state to me.”

Joe’s sentiments are shared by many opponents of government school voucher programs which give parents the ability to send their children to religious private schools.  Many feel such programs violate the First Amendment’s Establishment Clause. Years ago, however, the United States Supreme Court held that this is not the case as long as the choice to use a voucher at a religious school is made by families and there are secular alternatives. In addition, nearly 40 states have “Blaine” Amendments to their state constitutions , enacted in the wake of late nineteenth century hostility toward Catholic immigrants and  prohibiting public funding to be given to religious schools. Fortunately, the Wisconsin Supreme Court has held that the Milwaukee Parental Choice Program does not violate our Blaine Amendment (Jackson v. Benson).

But the Blaine Amendments remain a major hurdle to education reform elsewhere.  Consider the recent debate in Nevada.  The Nevada State Supreme Court ordered an injunction, or temporary embargo, of the state’s Education Savings Account (ESA) bill. This bill would allow almost every student in Nevada to receive state funds deposited into a private bank account to pay for educational services, such as  private school education, tutoring, language lessons, or therapies and treatments tailored to their unique and special needs. Opponents of the bill claim it could violate Nevada’s Blaine Amendments if parents used their ESA dollars at a religious private school.

The argument strikes us as weak for the very reasons recognized by the Supreme Court. The neutral provision of benefits does not favor one religion over another or religion over irreligion. Because the state does not compel the use of these benefits at religious schools, neither it – nor the state’s taxpayers – are endorsing a religious use.

But any particular state Supreme Court could get it wrong. What should states do if an adversarial supreme court prevents education reform?

In a recent policy paper published by the Cato Institute, a think-tank based in Washington DC, authors Jason Bedrick, Jonathan Butcher, and Clint Bolick explore an innovative answer to this: tax-credit funded ESAs.

Their paper, Taking Credit for Education: How to Fund Education Savings Accounts through Tax Credits, examines established ESA programs in Florida and Arizona, surveys a tax credit funded choice program in New Hampshire, and explains what a hybrid of the three models would and could look like in other states.

A tax-credit funded ESA would not need public funds, but would be funded through voluntary contributions from individuals.

Because the scholarships are funded through donations made by individuals, tax-credit scholarships have an impeccable record at all state Supreme Courts. The largest school choice program in America is the Florida Tax Credit Scholarship Program, which was initially the subject of a lawsuit challenging the program’s alleged aid to religious institutions in violation of the state’s constitution. The suit was dismissed in December 2014 due to the plaintiff’s lack of standing. Florida is one example of how tax-credit ESAs could be advantageous to students in states with heavy Blaine Amendment provisions.

To be sure, the approach is not ideal. The fact that these tax credit vouchers are voluntary presents a potential challenge to this proposal. If a program is reliant on voluntary contributions to continue, a downturn in the economy could mean students are not guaranteed a voucher for tuition from one year to the next.

In addition, depending on the wording of any particular state constitution, a proper understanding of notions of nonestablishment and neutrality would make such an indirect approach to reform unnecessary. But for states with aggressively worded or interpreted Blaine amendments, they may be necessary. The notion of tax credit funded ESAs are useful because they are needed.  There are 40 states with Blaine Amendments that, when coupled with a hostile supreme court, prevent a major roadblock to parental choice.  A tax credit ESA, as proposed by Bedrick, Butcher, and Bolick, may be a way to maximize parental choice while avoiding litigation.

*Subject’s name changed for privacy

Alexandra Hudson is Lead Education Analyst at the Wisconsin Institute for Law & Liberty.