fbpx

Montana School Choice

Montana Moms Sue to Restore School Choice

On December 12, 2018, the Montana Supreme Court struck down that state’s new scholarship tax-credit program—solely because some of the children receiving scholarships attend religious schools. The Institute for Justice (IJ) petitioned the U.S. Supreme Court for certiorari in this case on March 12, 2019, arguing that the Montana Supreme Court’s decision violates the federal Constitution’s protections for religious liberty. On June 28, the U.S. Supreme Court granted cert. The case is expected to be argued in the winter of 2020 and a decision is expected in the summer of 2020.

Montana’s Tax Credit Scholarship Program

The controversy began in May 2015, when the Montana legislature passed its first school choice program. The program provides a modest tax credit (up to $150 annually) to individuals and businesses who donate to private scholarship organizations. Those scholarship organizations (SOs) then use the donations to give scholarships to families who want to send their children to private schools, whether those schools are religious or nonreligious.

The Department of Revenue Tried to Exclude Students Attending Religious Schools

The Montana Department of Revenue, however, refused to implement the program as the legislature intended. Instead, the Department passed an administrative rule that limited scholarships to only those who wish to attend nonreligious private schools, and excludes those who wish to attend religious private schools. As most of the private schools in the state are religious, this rule denies genuine choice to the participating families.

Not only was the rule unfair, but it was also invalid and unconstitutional. The rule went against the will of the Legislature and also discriminated against religious liberty in violation of the federal Constitutions’ Religion and Equal Protection Clauses.

Families Bring a Lawsuit Against the Department

On December 16, 2015, three Montana families joined with the Institute for Justice in filing a constitutional lawsuit against the Department of Revenue. The lawsuit asked the Court to strike the down the rule and restore Montana’s school choice program.

The Montana trial court ruled for families in two separate decisions in March 2016 and June 2017. The Department of Revenue, however, appealed to the state supreme court, which reversed.

The Montana Supreme Court Rules Against Families and Struck Down the Program

According to the Montana Supreme Court, the program’s inclusion of religious schools violated Montana’s Blaine Amendment in the Montana Constitution, which prohibits public funds from aiding religious schools. The Court further found that the fact that the program included religious schools made the entire program invalid, and so the Court struck down the program in its entirety—for both students attending religious and nonreligious schools. In doing so, the Montana Supreme Court became the first in the country to invalidate a tax-credit scholarship program.

Families and IJ Appeal to the U.S. Supreme Court

Families and IJ appealed to the U.S. Supreme Court on March 12, 2019. They argued that the Montana Supreme Court’s decision violated the Federal Free Exercise Clause, Establishment Clause, and Equal Protection Clause by discriminating against religious schools and the religious families who attend them.

On June 28, 2019 the U.S. Supreme Court announced that it would hear the case in the coming term.

Current Status of the Tax-Credit Scholarship Program

Families can continue receiving scholarships for the 2019-2020 school year. However, no one is currently allowed to receive tax credits for their donations to the scholarship program. Donations are still tax-deductible and can be made here: https://www.bigskyscholarships.org/donate

Montana School Choice

Kendra Espinoza

Date Filed

December 16, 2015

Original Court

Flathead County Court

Current Court

U.S. Supreme Court

Case Status

Open

Attorneys

Media Contact

Scroll To

Case Team

Timeline and Case Documents

In The News

Introduction

In 2015, Montana followed the lead of 27 other states and the District of Columbia and enacted a private school choice program. The program is designed to give tuition scholarships to families so that they can send their children to the school that best fits their individual needs, whether that school is secular or religious. The Montana Supreme Court, however, struck down the program in December 2018—simply because the program allowed families to use scholarships at religious schools.

This decision violates the U.S. Constitution’s protections for religious liberty and equal protection under the laws, found in the Establishment, Free Exercise and Equal Protection Clauses.  On March 12, 2019, families relying on the scholarships asked the U.S. Supreme Court to take the case. The Court is expected to decide whether to take the case (“grant certiorari”) this summer.

The Scholarship Program

The Montana Legislature enacted a tax-credit scholarship program on May 8, 2015. The purpose of the scholarship program “is to provide parental and student choice in education” for K–12 students. It does so by providing a modest tax credit—up to $150 annually—to individuals and businesses who donate to private, nonprofit scholarship organizations. Scholarship organizations then use the donations to give scholarships to families who wish to send their children to private school. Recipients can use the scholarships at any “qualified education provider,” which is broadly defined to include virtually every private school in the state.

So far, one Montana scholarship organization, Big Sky Scholarships, has formed to participate in the scholarship program. Big Sky is a small nonprofit run by part-time and volunteer staff. Big Sky awards scholarships only to families who are low income or who have children with disabilities. Its scholarship recipients attend both religious and nonreligious schools.

The Department of Revenue Decided to Exclude Religious Schools From the Scholarship Program.

Shortly after the program was enacted, however, the Montana Department of Revenue enacted an administrative rule that prohibited scholarship recipients from using their scholarships at religious schools. Specifically, “Rule 1” changed the definition of “qualified education provider” to exclude any organization “owned or controlled in whole or in part by any church, religious sect, or denomination.” Id. According to the Department, Rule 1 was necessary to comply with the Montana Constitution. Article X, Section 6 of the Montana Constitution, also known as Montana’s “Blaine Amendment,” prohibits any public aid to religious schools.

Rule 1 threatened the success of the program. About 69 percent of Montana private schools for K–12 students are religious, and excluding them severely limited the choices of families. Three of these families are Plaintiffs and their children.

The Rule Prevented Plaintiffs and Other Scholarship Recipients From Using Scholarships.

Plaintiffs Kendra Espinoza, Jeri Anderson and Jaime Schaefer are all low-income mothers who were counting on the program scholarships to keep their children in Stillwater Christian School, a nondenominational school in Kalispell, Montana. Although all three receive financial aid from the school, they still struggle to make their monthly tuition payments.

Plaintiff Kendra Espinoza

Plaintiff Kendra Espinoza is a single mom who transferred her two daughters out of public school after her youngest struggled in her classes and her oldest was repeatedly bullied by her classmates. Kendra is a Christian and chose to send her daughters to Stillwater for its values, academics and tight-knit community. Kendra’s daughters, 14 and 11 in the spring of 2019, are flourishing at their current school.

Yet Kendra struggles to pay Stillwater’s tuition. She works nights as a janitor, in addition to her full-time job as an office assistant, just to afford the monthly tuition payments. Kendra has also had to raise tuition money from her community by raffling off donated quilts and holding yard sales, and Kendra’s daughters have chipped in by taking odd jobs. Kendra was counting on receiving the program scholarships this year to ease her family’s burden. Without the scholarships, Kendra may have to pull her children out of Stillwater.

Plaintiff Jeri Anderson     

Like Kendra, Plaintiff Jeri Anderson is a single mom struggling to pay Stillwater’s tuition for her 10-year-old daughter, Emma. Jeri adopted Emma from China, and Emma is academically gifted. Jeri chose to send her to Stillwater for its academics, and Emma thrives on the individualized attention she receives from her teachers, who guide her in advanced studies. Yet even though Stillwater has been generous with its financial aid for Emma, “paying the remaining tuition every month is still a serious struggle,” and Jeri “worr[ies] about it constantly.” Fortunately, Jeri was able to rely on the program scholarships since 2017 to make ends meet. Without the scholarships, Jeri and her daughter would suffer even greater financial hardship.

Plaintiff Jaime Schaefer

Plaintiff Jaime Schaefer also struggles to pay tuition for her son and daughter to attend Stillwater. Jaime and her husband transferred their daughter out of public school after they became disappointed with its academic expectations. For instance, their daughter already knew how to read in kindergarten, but her class was still learning the alphabet. Jaimie now sends both her children to Stillwater, where she has been impressed by its curriculum and music program. Paying the tuition, however, “is like a second mortgage payment,” and “[i]t is a year by year decision” whether the Schaefers can keep their children there. Jaimie was counting on the scholarships for “significant financial and psychological relief.”

Plaintiffs’ stories are not unique. They echo those of dozens of other families who are relying on the scholarships to make tuition payments, including families living in poverty and those with disabled children.

Plaintiffs Challenged the Rule as Unconstitutional.

Kendra, Jeri and Jaime brought this lawsuit on December 16, 2015, challenging Rule 1 as invalid and unconstitutional. Plaintiffs made three arguments. First, they argued the rule was invalid because the Legislature intended the scholarship program to include both religious and nonreligious schools, which was clear from the plain text of the statute and its legislative history. Second, they argued that Article X, Section 6 of the Montana Constitution did not apply to the program because that section applied only to public funds, and not private donations incentivized by tax credits. Finally, Plaintiffs argued that even if Article X, Section 6 required exclusion of religious schools from the program, this would violate the U.S. Constitution’s protections for religious liberty and equal protection under the law.

The Trial Court Sided With Plaintiffs and Enjoined the Rule.

On March 31, 2016, the trial court issued a preliminary injunction against enforcement of Rule 1, agreeing it was likely both invalid and unconstitutional. On May 26, 2017, the trial court made the injunction permanent and ruled for the Plaintiffs. The Department of Revenue appealed the decision to the Montana Supreme Court.

The Montana Supreme Court Reversed and Struck Down the Entire Scholarship Program.

In a 5–2 decision, the Montana Supreme Court reversed on December 12, 2018. The court’s opinion had three conclusions.

In its first conclusion, the court found that the program’s inclusion of religious schools violated the Montana Constitution. Specifically, the court found that by providing the $150 tax credit to donors of the program, the Legislature “indirectly pa[id] tuition at private, religiously-affiliated schools” and thus aided religious schools in violation of Article X, Section 6 of the Montana Constitution.

Second, the court found that the inclusion of religious schools tainted the entire scholarship program and that even scholarships for children at nonreligious schools could not continue under the program. According to the court, “there is no mechanism within the [program] to identify where [its] secular purpose ends and the sectarian begins” or “when the tax credit is indirectly paying tuition at a secular school and when the tax credit is indirectly paying tuition at a sectarian school.” As a result, the court invalidated Rule 1 and the entire scholarship program.

Finally, the court rejected Plaintiffs’ claim that interpreting the Montana Constitution to prohibit scholarships for children at religious schools violated the U.S. Constitution.

Two justices dissented. Both expressed deep concern that the court’s opinion ran afoul of the First Amendment. As one dissenting justice quoted, “[t]he exclusion of a group ‘from a public benefit for which it is otherwise qualified, solely because it is a church, is odious to our Constitution.’”

The Montana Supreme Court Grants a Partial Stay of the Decision.

On December 24, 2018, Plaintiffs asked the Montana Supreme Court to delay the effective date of its decision pending appeal to the U.S. Supreme Court. As Plaintiffs argued, dozens of families were expecting to apply for scholarships this spring and receive them in the summer; depriving them of these scholarships would be devastating.

On January 24, 2019, the court granted a partial stay of the program, allowing Big Sky to award its current scholarship funds this summer but prohibiting it from doing any further fundraising with the tax credits. Big Sky currently has funds for only 40 students.

Plaintiffs Ask the U.S. Supreme Court to Review the Case

On March 12, 2019, Plaintiffs asked the U.S. Supreme Court to take the case. As Plaintiffs argued, striking down the scholarship program just because it includes religious schools violates the U.S. Constitution’s protections for religious liberty contained in the Free Exercise Clause, the Establishment Clause and the Equal Protection Clause.

The Litigation Team

The litigation team consists of Institute for Justice Attorney Erica Smith and Senior Attorney Tim Keller.

About the Institute for Justice

The Institute for Justice is the national law firm for protecting educational choice. Since its founding 25 years ago, the Institute has successfully defended school choice programs in numerous state supreme courts, intermediate courts of appeal and trial courts, as well as twice before the U.S. Supreme Court.1

    JOIN THE FIGHT!   Sign up for newsletters:

    JOIN THE FIGHT!