Clarification to This Article
This article about the Supreme Court's review of an Arizona tax-credit program to assist private schools contained a description of the program that could be misleading. As the story said, student tuition organizations are allowed to give scholarships exclusively to private religious schools if they wish. But student tuition organizations can also be established to benefit secular private schools.
Justices debate whether tax law that benefits private schools violates clause

By Robert Barnes
Washington Post Staff Writer
Wednesday, November 3, 2010; 9:50 PM

Deciphering the Constitution's command that government "shall make no law respecting an establishment of religion" is almost always a guarantee of a divided Supreme Court.

And so it was again Wednesday as the justices reviewed an Arizona program that lets taxpayers send part of their state taxes to organizations that provide millions of dollars in scholarships to private religious schools.

The court's liberal members sharply questioned whether the program is just a way for the state to provide tax money to religious schools and noted that it almost certainly would be unconstitutional if the contributions came directly from the state.

Conservatives indicated that the program offers just a different version of the widely accepted practice of providing tax breaks for people who make charitable contributions.

The Obama administration weighed in on the side of Arizona, and argued that the taxpayers challenging the program do not even have the right to bring the lawsuit. So absolute was the government about the latter point that it seemed to take the nation's former top appellate lawyer - now Justice Elena Kagan - by surprise.

Kagan told her former deputy, Acting Solicitor General Neal K. Katyal, that he was advancing a "silly and fictional" interpretation of the court's past decisions on what taxpayers must prove before they can challenge a government spending decision.

For 13 years, Arizona has allowed a resident to send up to $500 of the money he owes the state in income taxes - $1,000 for a married couple - to a private "student tuition organization." In other words, if a couple owed the state $2,000, they could send half the money to the state treasury and half to one of the tuition organizations.

The organizations, which receive about $55 million a year, provide scholarships to private schools. Although they are not allowed to discriminate on the basis of "race, color, handicap, familial status or national origin," the organizations are allowed to provide scholarships only to private religious schools. The largest one benefits Catholic schools in the Phoenix area.

Some taxpayers sued, saying the structure effectively forces parents who want the scholarships to send their children to religious schools.

Katyal told the justices that lower courts should not have let the taxpayer suit go forward. Because they did not participate in the program, he said, "not a cent, not a fraction of a cent" of their money went into any religious school's coffers.

Taxpayers generally are not allowed to sue over government spending decisions. But the court in Flast v. Cohen in 1968 made an exception for spending alleged to violate the Establishment Clause.

"Isn't the underlying premise of Flast v. Cohen that the Establishment Clause will be unenforceable unless we recognize taxpayer standing?" Justice Ruth Bader Ginsburg asked.

Katyal said no, adding that he does not think that any taxpayer had the right to challenge the Arizona program. But whether the money involved is even state money is at the heart of the argument.

Paul Bender, who represented residents challenging the program, said it is different from a more traditional charitable donation, where the donor receives a tax deduction.

"When a taxpayer makes a charitable deduction, that charitable deduction is made from the taxpayer's money," he said. But the money at stake here is raised by the state income tax and owed to the state.

Some justices said they were not sure about such a distinction. "I must say, I have some difficulty that any money that the government doesn't take from me is still the government's money," Justice Anthony M. Kennedy said.

Justice Antonin Scalia said it boils down to whether the credit came on one line of the tax form or another. "This is a major lawsuit?" he asked.

The court already has ruled that parents may use government vouchers to send children to private secular and religious schools, and some conservative justices argued that Arizona's program is no different.

But Bender said the difference is that with vouchers, the state gives money to parents, and they make the choice. In Arizona, he said, the money goes to the tuition organizations, some of which make it available to parents only if they send their children to religious schools.

The combined cases are Arizona Christian School Tuition Organization v. Winn and Garriott v. Winn.

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