In Major First Amendment Ruling, Arizona Supreme Court Upholds School Choice Tax Credit

John Kramer
John Kramer · January 27, 1999

Washington, D.C.—In a major triumph for champions of parental school choice, the Arizona Supreme Court on Tuesday (January 26, 1999) upheld the state’s income tax credit for contributions for private school scholarships funds.

“This decision is a triumph not only for Arizona schoolchildren, but for the school choice movement nationwide,” declared Clint Bolick, the litigation director for the Washington, D.C.-based Institute for Justice, which argued the case in the Arizona Supreme Court on behalf of Superintendent of Public Schools Lisa Graham Keegan, taxpayers, and families. “The decision will resonate widely as a major First Amendment precedent,” Bolick added.

Coming only seven months after the Wisconsin Supreme Court ruling upholding the Milwaukee Parental Choice Program, the decision fuels efforts to expand parental school choice to include all private schools, including those that are religiously affiliated. Both decisions upheld such programs against state constitutional claims as well as First Amendment religious establishment clause challenges. The U.S. Supreme Court declined review of the Milwaukee decision, but it may have another opportunity to address this issue if the plaintiffs in this case decide to appeal.

“We are confident that the U.S. Supreme Court will uphold parental autonomy and expanded educational opportunities whenever a school choice case reaches the Court,” Bolick said. Other cases raising similar issues are pending before state supreme courts in Ohio, Vermont, and Maine. The Institute for Justice represents parties in all the school choice cases and also helped defend the Milwaukee program.

School choice proposals are pending in the Texas, Pennsylvania, and Florida legislatures, backed by the governors of those states. A tuition tax credit initiative is expected to be on the Michigan ballot in 2000.

The Arizona program provides tax credits of up to $500 for taxpayers who contribute to programs that provide scholarships to students to attend private schools at the K-12 level. It also provides $200 credits for contributions to public schools for extracurricular activities. Arizona already has the nation’s largest charter school program, and its legislature will consider adding school vouchers to the range of educational options this year.

The tax credit was challenged by the Arizona Education Association, People for the American Way, Americans United for Separation of Church and State, and others. In a 3-2 decision by Chief Justice Thomas A. Zlaket, the Court ruled that the program’s “primary effect” is not to aid religion, but to “encourage the development of educational settings that would invigorate learning, improve academic achievement, and provide additional choices to parents and children.”

“The tax credit victory boosts growing efforts, such as those by CEO America, that provide scholarships to low-income children across America to attend private schools,” said Institute for Justice President Chip Mellor.

The decision, Kotterman v. Killian, is available on the Court’s website at