A riddle, attributed to Abraham Lincoln: How many legs does a horse have if you call the tail a leg? Answer: Four. Because a tail is a tail no matter what you call it.
The Supreme Court confronted its own version of this riddle last week (April 4). Does a government subsidy to religious schools possibly violate separation of church and state if you call it a tax credit instead? In a 5-4 decision, the court said no. But the answer is as wrong as calling a horse’s tail a leg.
The court’s conservative majority reached for that wrong answer in an activist move to protect government aid to religion from taxpayer suits despite a 43-year-old precedent permitting them, Flast v. Cohen (1968). As Justice Elena Kagan explained in a powerful dissent, the new ruling “devastates” what is often the most practical legal vehicle for enforcing the Constitution’s guarantee of religious neutrality in government policy.
The ruling in Arizona Christian School Tuition Organization v. Winn turns aside an Establishment Clause challenge to an Arizona tax-credit system that funnels government money to religious schools as surely as if the government wrote the check instead of an individual taxpayer. The Arizona law, enacted in 1997, gives a participating state taxpayer a dollar-for-dollar credit of up to $500 for individuals or $1,000 for married couples for contributions to specially established “school tuition organizations” or STOs.
Those STOs provide tuition grants to students attending qualified private schools in the state. To qualify, schools cannot discriminate on the basis of race, color, national origin, handicap, or familial status. But schools can discriminate on the basis of religion.
The largest STOs, such as the Arizona Christian School Tuition Organization, limit their aid to students attending religious schools. So, much of the $350 million in tax revenue that the state has forgone over the past decade has subsidized schooling for which eligible students were excluded on the basis of religion.
That is not the American way of public education. A group of Arizona taxpayers raised that argument in a federal court suit contending that the tax-credit scheme operates to provide an impermissible government subsidy for religious discrimination. The state disagrees. It contends the program operates as neutrally as a school voucher program of the sort that the Supreme Court upheld, in another 5-4 decision, back in 2000 (Zelman v. Simmons-Harris).
In ruling on that question, a three-judge panel of the Ninth U.S. Circuit Court of Appeals found the program unconstitutionally skewed toward religious schools. The full court refused to rehear the case en banc, with eight judges dissenting.
The Supreme Court chose instead to rule on another issue: standing. Significantly, none of the appeals court judges on either side questioned the taxpayers’ basis for challenging the program. Writing for the Supreme Court’s conservative bloc, however, Justice Anthony M. Kennedy concluded that the plaintiff taxpayers had suffered no injury because none of their money went to religious schools.
The tax credit is “not tantamount to a religious tax,” Kennedy wrote. “When Arizona taxpayers choose to contribute to STOs,” he explained, “they spend their own money, not money the State has collected from respondents or from other taxpayers.”
Kagan ably demonstrates the error in Kennedy’s conclusion. At tax time, Arizonans calculate their tax payment and, if they choose, can then decide to write two checks: one to a student tuition organization and the other, for the balance, to the state.
The tax credit is “costless” to the individual taxpayer, Kagan explains. “It comes out of what she otherwise would be legally obligated to pay the State hence, out of public resources.” In fact, the STO’s “capitalize on this aspect of the tax credit,” Kagan notes. One STO advertises that the tax credit “won’t cost you a dime.”
As an original question, perhaps reasonable people can disagree on how to classify this system. But, as detailed in Kagan’s opinion, the Supreme Court and lower federal courts have ruled on any number of Establishment Clause challenges to tax credits or deductions without ever questioning taxpayers’ standing to bring the suits.
In oral argument, the government which oddly sided with the state on the standing issue conceded as much. In answer to a question from Kagan, Acting Solicitor General Neal Katyal agreed that under the government’s position, the Supreme Court erred in five cases by ruling on the merits instead of dismissing them for lack of standing.
Five precedents is a lot to disapprove at one time, even for the Roberts Court. Kennedy argued that taxpayers in those other cases may have had standing on other grounds and, in any event, standing may not have been questioned. Kagan rightly notes that the court is obliged to consider standing on its own whether or not raised by the parties.
Kennedy says and Kagan agrees that other individuals may have standing to challenge Arizona’s program. Opponents may try to mount a new case. But taxpayer suits are both a practical and a logical means to enforce the rule against government establishment of religion because the right to religious neutrality, as Kagan explains, in fact belongs to all of us.
“State sponsorship of religion sometimes harms individuals only (but this 'only' is no small matter) in their capacity as contributing members of our national community,” Kagan writes. In those cases, she says, “our Constitution’s guarantee of religious neutrality still should be enforced.”