Montana High Court Considering Ban on Religious Schools Tax Credit


HELENA – The Montana Supreme Court heard arguments on Friday over reinstating a ban on tax credits for donations to scholarships for students attending private religious schools.

Montana revenue officials and public education advocates have urged judges to overturn a judge’s order in Kalispell last year and to prevent religious schools from benefiting from the tax credit program.

However, lawyers for the parents of three religious school students have called on judges to dismiss the ban because it is discriminatory and no public money is used for religious purposes.

The contested program, approved by the Republican-led legislature in 2015 as an alternative to a voucher program, grants up to $ 150 in tax credits for donations made to scholarship programs for private schools.

The state Revenue Department drafted rules to administer the new law that religious schools could not participate in the program because Montana’s constitution prohibits direct or indirect state spending on religious schools.

The rules sparked allegations of discrimination from religious groups and a lawsuit by three women whose children attend religious schools. A Kalispell judge agreed with the women last May and overturned the revenue department’s exclusion from religious schools.

The department appealed to the state Supreme Court, which heard arguments in the case before an audience at the University of Montana.

Revenue Department attorney Dan Whyte said the tax credits are publicly funded and the program violates the state’s constitution ban on indirect state spending for religious purposes .

The no-ban tax credit program almost exclusively benefits religious schools, he said. That’s because more than 90 percent of private schools that have registered with scholarship organizations under the program are religious, Whyte said.

Perhaps this is how state lawmakers circumvented the ban on spending state money on religious schools, said Jonathan McDonald, attorney for the Montana Quality Education Coalition, a group defense of public education.

“The legislature said we can’t donate money to private religious organizations, however, you can, so we’re going to give you back dollar for dollar when you do,” McDonald said.

Lawyers for the parents of the students have argued that the tax credits are not public money, but private money, and that they benefit students, not religious schools.

In addition, a ban on tax credits for students in religious schools is discrimination, said Richard Komer, an Institute for Justice lawyer representing parents.

“Discrimination against families who choose private religious schools in favor of those who choose private secular schools cannot be justified by either the Montana constitution or the federal constitution,” Komer said.

The judges did not render an immediate decision. Their questions included why the state considers tax credits for religious high school students unconstitutional, when tax credits have been allowed for decades for donations to higher education foundations, including affiliated schools. to a religion like Carroll College.

The case has sparked national interest, with 10 education and civil liberties groups weighing in with the court. This includes the US government, which wrote in a court record that the exclusion from Montana’s religious schools violates the First Amendment by denying students participation in the program on religious grounds.

Despite all the attention, the program did not generate much money. People claiming the tax credits donated $ 32,129 to private school scholarship groups in 2016 and pledged $ 7,300 in the first 11 months of 2017, according to the Revenue Department.

The 2015 law also allowed tax credits of $ 150 for donations to innovative educational programs in public schools. This translated into $ 7,851 in donations in 2016 and $ 3,150 pledged in the first 11 months of 2017.

State lawmakers had set caps of $ 3 million for the private schools scholarship program and the public schools innovation program.


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