In the legal battle over educational options for needy students, it’s déjà vu all over again.
Kentucky’s Council for Better Education has filed a lawsuit challenging the commonwealth’s landmark Education Opportunity Accounts (EOAs) that will deliver school choice to thousands of Kentucky parents. Unfortunately for the council, the lawsuit reads as if legislators and courts somehow haven’t been grappling with the details of these kinds of laws for more than a decade.
To be clear, the core complaint in the council’s lawsuit has already been directly addressed by the U.S. Supreme Court in very similar cases, and we suspect the council knows the court didn’t go their way.
Here’s the background. Kentucky lawmakers this year created Education Opportunity Accounts for low-to-middle-income parents that will benefit Kentucky’s most populous counties. EOAs will allow parents to apply for scholarship funds to support a wide range of educational options for their kids.
Private donors will fund account granting organizations, which will in turn direct funds to the educational choices of parents. The donors will receive a tax credit for their donation.
The tax credit has become the sticking point where opponents of school choice have focused their rhetorical and now legal firepower.
Backers of Kentucky’s educational status quo have repeatedly and, as a legal/constitutional matter, falsely claimed that these private donations to private groups are somehow — choose your favorite term — public funds, state revenues, government expenditures, or tax dollars.
Here are some of the false claims made in the council’s lawsuit:
• The new school choice law “redirects state revenues to fund, among other things, private school tuition and expenses …”
• The new school choice law means “state expenditures will impermissibly fund private schools …”
• The new school choice law engages in a “diversion of public revenues to private schools.”
Many of the council’s other complaints rest gingerly upon this core claim, that money given from one private party to another private party, even though the money never touches the public treasury, can be transformed magically into state revenue.
How can we say with such confidence that, as a legal matter, the council’s claims are so baseless? Because, and this may come as a surprise to the council, the U.S. Supreme Court has already said as much.
A decade ago, when a handful of Arizona taxpayers claimed that a strikingly similar tax-credit scholarship school choice program was unconstitutional, their core arguments rested on exactly the same idea, that dollars not given to the state are somehow still property of the state.
In tossing out the taxpayers’ claims, Justice Anthony Kennedy wrote for the majority that the notion that funds not paid in taxes are nonetheless public funds “assumes that all income is government property, even if it has not come into the tax collector’s hands. That premise finds no basis in standing jurisprudence.”
It doesn’t take much to understand why Kennedy’s analysis matters critically. If money not given to the state is still state money, then there would be effectively no limit on the ways in which the state could restrict, direct, and regulate all of our incomes for whatever purpose it wished. If that standard were applied to other tax credits and deductions, every church and every other charitable nonprofit in America could suddenly find itself “state funded.” It’s hard to imagine a greater expansion of government power.
In this context, the difference between a tax-credit program to encourage private support for education and a state-run voucher program couldn’t be more important as a constitutional matter. Nonetheless, the Council for Better Education demonstrates with its complaint that it doesn’t understand or appreciate the difference between vouchers and tax credits, referring throughout its filing to Education Opportunity Accounts as “The Voucher Program.” The difference, of course, matters enormously for Kentucky students.
It should make sense to all of us that Kentucky parents would prefer for their kids not to be trapped in public schools where fewer than ten percent of students are proficient in basic subjects. Opponents claim that school choice damages public schools. The record clearly shows that when school choice arrives, the bureaucracies get a wake-up call, and the schools they run tend to improve markedly.
Let’s hope that Kentucky’s Supreme Court, like Kennedy a decade ago, is able to see that school choice directed by parents and private donors poses no constitutional quandary, and parents deserve this opportunity to decide what’s best for their own kids.
Caleb O. Brown is a parent in Shelbyville and host of the Cato Daily Podcast. Rich Gimmel is the retired owner of Atlas Machine and Supply Inc. and former vice chair of the Kentucky Board of Education. They can be reached at CBrown@cato.org