The Supreme Court has had another opportunity to address the tension between the religion clauses: the Establishment Clause, which prohibits the government from establishing a religion, and the Free Exercise Clause, which requires the government to accommodate individuals to freely follow their religious beliefs or practices. Recently, the tension has surfaced most often concerning education funding and school choice programs. In January, the United States Supreme Court heard oral arguments in Espinoza v. Montana Department of Revenue, a case involving state funding through tax credit scholarships for private schools, including religious schools, and issued its opinion on June 30, 2020.
In Espinoza v. Montana Department of Revenue, three low-income mothers applied for $500 scholarships to help with their children’s tuition at Stillwater Christian School in Montana. In 2015, the Montana legislature enacted a tax-credit scholarship program in which individual and business donors could take a tax credit up to $150 for donations made to scholarship organizations such as Big Sky Scholarships. Big Sky then awards scholarships to families who may then use it at any “qualified education provider.” Once the family designates the school, Big Sky sends the scholarship funds to the school. Currently, the scholarships are for $500. However, the legislature directed that the tax credit comply with the state constitution, which was problematic because the Montana Constitution does not allow for any direct or indirect aid to religious institutions. In complying with the state’s constitution, the Montana Department of Revenue enacted Rule 1 which barred the tax credit for scholarships used at religious schools. The Montana Supreme Court ruled in favor of the Department of Revenue, holding that the use of the tax credit violated the state’s constitution and that Rule 1 was unnecessary to ensure constitutional compliance.
Why did the Supreme Court even hear this case?
The Supreme Court normally does not hear cases where the state supreme court based its decision on the state constitution, which was the case in Espinoza. Yet, the Supreme Court still granted certiorari because it will hear cases decided on state constitutional provisions when the provision in question would deprive an individual of a constitutional right under the United States Constitution.
The no-aid provision in Montana’s constitution, also called a Blaine Amendment, appears to have been an underlying reason for the Court’s decision to hear the case. Blaine Amendments originated from a failed federal constitutional amendment initially introduced by Senator James Blaine. Later, amendments modeled after the original Blaine Amendment were adopted by states in their state constitutions to prevent Catholic schools from obtaining state funding from the largely Protestant public schools, which were largely Protestant-oriented. Today, approximately thirty-seven state constitutions, including Montana’s constitution, have some form of Blaine Amendments.
“This case is just like Trinity Lutheran.”
The Justices asked a number of questions during oral arguments about the case in light of Trinity Lutheran Church of Columbia, Inc. v. Comer. Justices Alito and Kavanaugh seemed to agree with appellants’ argument that this case was “just like Trinity Lutheran.”
In Trinity Lutheran, the state argued that providing public funding to the church would violate the state’s Blaine Amendment. The Court noted that while the Establishment Clause would not prevent the state from including Trinity Lutheran in the program, the real question was whether the Free Exercise Clause was violated when the state excluded the church. The Court, imposing strict scrutiny on “laws that target the religious for special disabilities[,]” held that Missouri violated the Free Exercise Clause when it prevented the church from applying for the grant simply because it was a church.
Despite Trinity Lutheran’s famous footnote 3, which limited the decision to playground resurfacing and declined to “address religious uses of funding or other forms of discrimination[,]” in Espinoza, the Supreme Court built on its decision in Trinity Lutheran, primarily through what the Court has previously explained as the “play in the joints” between the Establishment and Free Exercise Clauses. Daniel Mach, Director of the ACLU Program on Freedom of Religion and Belief, interpreted this to mean that states’ decisions on whether to limit education tax-credit programs to only those that are nonreligious should fall “in the joints” and thus do not violate the Free Exercise Clause.
It turns out that Mr. Mach was wrong. Benjamin Olneck-Brown, a research analyst for the Education Program of the National Conference of State Legislatures, explained that the Espinoza Court not only upheld previous rulings that school choice programs supporting religious schools do not violate the Establishment Clause, but it went further in holding, in line with its decision in Trinity Lutheran, that programs which exclude religious schools solely on the basis of religious nature violate the Free Exercise Clause.
The Espinoza decision may allow states to expand their school choice programs.
Mr. Olneck-Brown believes the Court’s decision seems to clearly indicate it will prohibit most states from excluding religious schools in school choice programs going forward. While Espinoza appears to only apply to Montana’s tax credit program, it likely will provide a precedent for any similar future state actions just as Trinity provided a precedent for Espinoza.
Evie Blad, a reporter for Education Week, believes it will most likely open the door for more states to enact school choice programs even if the state’s constitution contains a no-aid provision. In the Espinoza majority opinion, Chief Justice Roberts wrote, “A State need not subsidize private education. But once a State decides to do so, it cannot disqualify some private schools solely because they are religious.” It will be interesting to see if any states with no-aid provisions in their state constitutions will try to enact school choice programs in the near future.
Espinoza is unlikely to affect school choice in North Carolina.
North Carolina’s Constitution is unlikely to bar proponents seeking to expand the state’s education choice programs to include tax credit options. David Roland, of the Institute for Justice, and Krista Kafer, of the North Carolina Education Alliance, believe that North Carolina is ideally suited to include such options. First, the state constitution does not include a Blaine Amendment. Second, although it does include a uniformity clause, which requires the state to provide a uniform system of free public education, the North Carolina Supreme Court has interpreted the clause to apply to school systems and is satisfied as long as the government provides “public schools of like kind” throughout all sections of the state. Finally, and more importantly, the North Carolina Supreme Court has consistently upheld the General Assembly’s authority to legislate programs designed to improve student education, including school choice options.
School Choice Programs in the US and North Carolina
Here is a brief review of school choice programs:
School choice programs throughout the country generally fall within one of four categories: personal education savings accounts, tax-credit scholarship programs, individual tax credit or deduction programs, and voucher programs.
In personal education savings account programs, funds are deposited into government-authorized savings accounts which are distributed to families through debit cards for students to use for qualified educational and therapeutic uses. Six states, including North Carolina, offer this type of program. Note that five of the six programs, including North Carolina’s Personal Education Savings Account program, are limited to students with special needs.
In tax-credit scholarship programs, the program at issue in Espinoza, taxpayers receive partial tax credits when they donate to nonprofits that provide private school scholarships to students and families. Currently, 18 states offer some form of a tax credit scholarship program. North Carolina currently does not have this type of program.
In programs offering individual tax credits or deductions, families receive state income tax relief for approved educational expenses, either through a tax credit or a tax deduction. Approved expenses typically include tuition, books, supplies, computers, tutors, and transportation. Currently, eight states offer such programs.
In voucher programs, public funds that are allocated for a student’s public schooling are reallocated to the student’s family in a voucher to pay partial or full tuition for the child’s private school. Approved private school choices typically include both secular and parochial school options. As of 2019, 17 states offer some form of voucher program.
North Carolina offers two voucher programs: the Special Education Scholarship Grants for Children with Disabilities program and the Opportunity Scholarships program. The Special Education Scholarship Grant program offers families of children with special needs the opportunity to receive vouchers to attend private schools of the parents’ choosing. Currently, the voucher is limited to $8,000 per year. The Opportunity Scholarships program offers vouchers with an average of $4,000 voucher value per year, based on income. To be eligible, the family income cannot exceed 133% of the guidelines needed to qualify for federal free and reduced lunch. For example, in the academic year 2018-2019, a family of four could not have had income in excess of $61,913 to remain eligible for the program.