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Posted by on Apr 4, 2011 in Law, Religion, Society | 0 comments

Tax Payers Cannot Sue Over Religious Tax Credits

A “School Tuition Organization” is an entity that collects donations which are then distributed to private schools. In Arizona, such contributions receive a state tax credit. So far, those tax credits have cost the state in excess of $350 million in revenue. The vast majority of the schools benefiting from such funding in Arizona are religiously affiliated. Today in the case of Arizona Christian School Tuition Organization v. Winn, the U. S. Supreme Court ruled that taxpayers do not have standing to sue government bodies on First Amendment establishment of religion grounds in religious school tax credit cases.

Standing, in lay terms, is simply the right to sue. Having once done a 58 page federal court brief on the subject, I can tell you it’s not that simple, but that’s what it boils down to. The legal ramification is also simple. If you don’t have standing, the case gets dismissed without the merits of your claim ever being heard. And that is now the law of the land for any taxpayer who wants to try to enjoin the government from providing tax credits for religious purposes. No standing. Case dismissed.

The principle is not new. It has generally been held that taxpayers cannot sue the government over the use of tax monies. The rationale has been that an individual taxpayer’s contribution to a particular expenditure is not calculable, and if it were would be de minimus. Like all general rules, however, there are exceptions. For the past 43 years such an exception has existed by which taxpayers can bring action to prevent government subsidies for religious purposes. Flast v. Cohen (1968).

Today’s decision does not overrule the Flast decision, though Justice Scalia, in a concurrence joined by Justice Thomas, believes that the Court should have overruled Flast. Instead the majority opinion written by Justice Kennedy distinguished today’s decision from Flast. The basis of the distinction was that Flast involved collecting tax dollars and expending those dollars to purchase books for religious institutions whereas today’s case involved a tax credit, where revenues were not collected in the first place, to the detriment of government revenues.

This was a 5-4 decision with the usual suspects on each side. Justice Kagan wrote the dissent arguing that a claim of unconstitutionally subsidizing religious schools should be sufficient under the Flast rule to grant standing and allow the case to go forward.

There will likely be a partisan divide on the outcome of this case. Historically, though, it’s not earth shattering in its impact on this particular issue. Property tax exemptions for religious institutions, including religious schools, have long been recognized as constitutional. Tax credits for donations to a religious school organization aren’t much different. What is different now is that citizens who object to such tax policies will be precluded from raising the subject in court.