U.S. Supreme Court Dismisses Legal Challenge to Arizona School Choice Program

John Kramer
John Kramer · April 4, 2011

Arlington, Va.—The U.S. Supreme Court today reversed the Ninth Circuit’s decision in Arizona Christian School Tuition Organization v. Winn, a legal challenge aimed at halting Arizona’s highly successful and popular private school scholarship tax credit program. Today’s landmark decision declared that the plaintiffs in the case lack standing to bring the challenge in the first instance because the program is funded by private contributions, not government funds.

“Today’s decision marks the fifth time in recent years that the Supreme Court has rebuffed efforts by school choice opponents to use the courts to halt programs that empower families to choose a private school education if that is where their child’s needs will best be served,” said Tim Keller, executive director of the Institute for Justice Arizona Chapter. “It is now crystal clear that only those individuals who have a direct stake in the outcome of a case have standing to challenge a school choice program in federal court.”

In 1997, Arizona adopted the nation’s first statewide scholarship tax credit program. Under that program, individuals who donate to nonprofit organizations (known as School Tuition Organizations) may take a dollar-for-dollar tax credit against their state income taxes, up to a maximum of $500 per taxpayer. The program requires that the School Tuition Organizations use 90 percent of the donations received to award tuition scholarships, thus enabling low- and middle-income parents to send their children to private schools.

The ACLU of Arizona challenged Arizona’s tax credit program on behalf of several state taxpayers alleging that by giving other taxpayers the ability to donate to religiously affiliated nonprofit organizations that the state was effectively advancing religion. A federal district court originally dismissed the ACLU’s lawsuit, citing Zelman v. Simmons-Harris, but the U.S. Court of Appeals for the Ninth Circuit reinstated the suit because most taxpayers to date have donated to religiously affiliated charities. The Institute for Justice joined the Alliance Defense Fund’s Petition for Review of the Ninth Circuit’s decision, which argued that the plaintiffs lacked standing.

“When Arizona taxpayers choose to contribute to [School Tuition Organizations], they spend their own money, not money the State has collected from respondents or from other taxpayers,” wrote Justice Anthony M. Kennedy, for the 5-4 majority. “While the State, at the outset, affords the opportunity to create and contribute to [a School Tuition Organization], the tax credit system is implemented by private action and with no state intervention. Objecting taxpayers know that their fellow citizens, not the State, decide to contribute and in fact make the contribution.”

“Like contributions that lead to charitable tax deductions, contributions yielding [School Tuition Organization] tax credits are not owed to the State and, in fact, pass directly from taxpayers to private organizations. Respondents’ contrary position assumes that income should be treated as if it were government property even if it has not come into the tax collector’s hands. That premise finds no basis in standing jurisprudence,” continued Kennedy.

“School choice is not only constitutional; it is also good public policy,” Keller continued. “Empirical evidence shows that school choice programs improve outcomes for both children participating in the program and for children who attend public schools.”

Indeed, a recent study by Dr. Vicki Murray, a senior policy fellow at the Pacific Research Institute, demonstrates that Arizona’s scholarship program helps tens of thousands of low- and middle-income families attend private schools that would otherwise be foreclosed to them. Dr. Murray’s paper is available from Harvard University’s Program on Education Policy and Governance here: http://www.hks.harvard.edu/pepg/PDF/Papers/PEPG10-18_Murray.pdf.

“Given the success of school choice programs in improving educational outcomes, many states are right now considering innovative education reforms, including scholarship tax credit programs modeled on the Arizona program at issue in today’s Supreme Court decision,” said Richard D. Komer, senior attorney with the Institute for Justice. “Today’s decision should embolden state legislators to move aggressively ahead with reforms that expand parental choice and empower parents to choose from among a wide array of public, and private and religious schools.”

“The tens of thousands of Arizona families relying on the tax credit scholarship program can now breathe a sigh of relief and rest assured that Arizona’s school choice programs are on sound constitutional footing,” said Chip Mellor, president and general counsel of the Institute for Justice. “And while those who oppose school choice must abandon their efforts to challenge school choice programs under the First Amendment, they will no doubt continue to employ state constitutional provisions in an effort to thwart parental choice. They too can rest assured that the Institute for Justice will be there to defend school choice programs both in the courts of law and in the court of public opinion.”

The Institute for Justice recently successfully defended Arizona’s Corporate Scholarship Tax Credit Program in state court in Green v. Garriott, which helps several thousand low-income families attend private schools, as well as the Arizona Supreme Court’s 1999 decision in Kotterman v. Killian, which also upheld the individual tax credit against a nearly identical legal challenge to Winn. IJ was also instrumental in securing the U.S. Supreme Court’s 2002 decision in Zelman v. Simmons-Harris that upheld Cleveland’s school voucher program.