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Nevada Families Sue to Restore Tax Credits for Scholarship Donations

As students nationwide return to school, some Nevada children are facing a heartbreaking reality: They can’t go back to the schools where they were thriving.

That’s because, earlier this year, the Nevada Legislature significantly altered the state’s Educational Choice Scholarship Program, eliminating a provision that annually increased the amount of tax credits available to businesses that contribute money to scholarship-granting organizations.

Enacted in 2015, Nevada’s scholarship program has empowered thousands of families to choose the schools that best suit their children’s needs. Scholarships are funded through tax-credit-eligible donations, and the 2015 law included a provision that increased the amount of tax credits available to donors by 10% each year.

The Legislature’s de facto cap on these tax credits this year came with devastating consequences for families. With education costs rising, the state’s population growing, and critical tax incentives cut off, scholarship organizations couldn’t serve as many qualified students as they anticipated, and families who had been expecting renewed scholarships instead received rejection letters.

Flor Morency and Bonnie Ybarra are typical of the many financially struggling parents whose children lost their scholarships. Flor is the mother of twins, one of whom was bullied in his public school. After receiving scholarships and enrolling both children at a Catholic school, Flor has seen a marked improvement in her son’s happiness—and his grades. Bonnie’s two oldest daughters struggled academically at their prior public schools, receiving dismal grades. Both girls were awarded scholarships to attend a private school where they have turned their academic careers around. Neither family can afford the cost of tuition without their lost scholarships, putting their children at risk of having to return to schools that previously failed them.

The Nevada Legislature was not only wrong to hamstring this vital choice program—it was acting outside the law. The Nevada Constitution clearly states that measures intended to raise government revenue—including cutting back on tax credits—require a two-thirds vote in both legislative chambers. Advocates of this scholarship-killing measure fell short of that threshold in the Senate but simply decided to ignore this constitutional requirement.

In August, Flor, Bonnie, and several other families harmed by this unconstitutional legislative action, along with a scholarship organization and several business donors, teamed up with IJ to fully restore Nevada’s vital—and only—educational choice program. Our lawsuit will ensure that even more Nevada families are able to choose the best schools for their children and will enforce essential state constitutional limits on government power.

Tim Keller is an IJ senior attorney

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