Institute for Justice · December 17, 2015

Yesterday afternoon, three Montana mothers sued the State Department of Revenue in Flathead County District Court after it adopted a rule that denies educational choice to the overwhelming majority of eligible families under the state’s new scholarship program. Although the legislature intended the scholarship program to allow recipients to attend any private school of their choice, the Department’s new rule excludes those who wish to attend religious private schools. As most of the private schools in the state are religious, the rule threatens to cripple the program.

The scholarship program was enacted in May 2015 after the legislature decided that all parents should have the opportunity to choose their children’s schools, regardless of the size of their bank account. 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) will then use the donations to give scholarships to families who want to send their children to private schools.

“These scholarships were meant to help parents choose the best education for their children,” said Kendra, a single mom with two daughters who is one of the parents suing the Department. “Now, the Department of Revenue is trying to take that choice away.”

Last year, Kendra fundraised and took on a second job cleaning houses in order to afford to send her two daughters to Stillwater Christian School, after they were bullied and struggled in their public school. Now both girls are thriving at Stillwater. The program scholarships would bring a tremendous financial relief to the family.

“The Department of Revenue does not have the authority to exclude families who want to send their children to religious school under the program,” said Dick Komer, Senior Attorney at the Institute for Justice, who is representing Kendra and the other Montana mothers suing the Department.

As Mr. Komer explained, the rule exceeds the Department’s authority by defying the intent of the legislature to make scholarships available for students to attend all private schools. This intent is clear from the text of the statute, as well as from a poll the legislature conducted in November that shows that the majority of legislators think the rule goes against the intent of the scholarship program.

The Department claims it has the authority to enact the rule under the Montana Constitution’s Article X, Section 6(1) and Article V, Section 11(5)—but this is incorrect. These provisions merely prohibit the state from giving grants to religious entities, which the program does not do for two reasons. First, the program does not give grants to schools, but instead generates scholarships for families. Second, courts across the country, including Montana’s own courts, have been clear that tax credits are not public grants. Instead, tax credits merely allow taxpayers to keep more of their own money.

Worse still, Article X, Section 6(1) is a state “Blaine Amendment,” adopted in 1889 to discriminate against Catholics at a time of widespread Catholic bigotry. Today, the Department uses a provision designed to discriminate against Catholics to discriminate against all religions.

“The rule also violates both the state and federal Constitutions because it allows scholarship recipients to attend any private school except religious ones,” said Institute for Justice Attorney, Erica Smith, who is also representing the mothers suing the program. “That’s discrimination against religion.”

The State Attorney General’s Office agrees. On November 17, it submitted written comments to the Department urging it not to adopt the rule. The comments stated the rule “would not be defensible” in court and that there is a “substantial likelihood that [the rule] would be declared unconstitutional” because it “categorically excludes religious entities from an otherwise neutral benefits program.” Meanwhile, Eric Feaver, President of the Montana Education Association-Montana Federation of Teachers (MEA-MFT) submitted comments in support of the rule.

The Institute for Justice has represented parents 24 times in defense of school choice programs, alongside state attorney general’s offices. This is the first time parents have had to sue to get a state agency to administer a scholarship program as written. “The Department of Revenue appears to be playing politics with children’s education,” said Dick Komer.

“A program scholarship could make a big difference for me and my daughter,” said Jeri Anderson, another plaintiff who is also a single mom that sacrifices to send her daughter, Emma, to Stillwater Christian School. “I know my daughter best and it should be up to me, not government bureaucrats, to decide what school is right for her.”

The Institute for Justice is a nonprofit civil rights organization and the nation’s law firm for protecting school choice programs. Since its founding 25 years ago, the Institute has successfully defended school-choice programs in numerous courts, including twice in the U.S. Supreme Court. It currently has four other school choice cases pending in Colorado, Georgia, Florida and Nevada.

The plaintiffs are also represented by Bill Mercer of Holland & Hart LLP in Billings, who is serving as local counsel in the case.