Tag: lawsuit

Another “Winn” for Educational Freedom in New Hampshire

In ACSTO v. Winn (2011), the U.S. Supreme Court upheld Arizona’s scholarship donation tax credit program on the grounds that plaintiffs did not have standing to sue in the first place, because they could not show any specific injury to themselves caused by the voluntary program. Today, the New Hampshire Supreme Court reached the same conclusion in a case involving that state’s new scholarship program. Importantly, this preserves the perfect legal record of modern education tax credit school choice programs.

Under these programs, individuals or businesses can donate money to a non-profit Scholarship Granting Organization that then uses the money to make private education affordable to lower income families. The donor’s taxes are cut in proportion to the size of the donation they make (100% in AZ, 85% in NH). No one is compelled to make a donation, and those who do not donate have their taxes collected as they always were. Those who choose to make donations can pick the organization that receives their money, just as they would pick any other charitable organization.

To have standing to sue over the constitutionality of a law, it is generally required to show that the law has personally and concretely harmed you in some way. Though this may seem arbitrary, it has a very important purpose, which the NH ruling explains in detail: without the harm requirement, courts would have sweeping power to override the will of voters and their elected representatives. If anyone could sue to overturn any law for any reason, innumerable cases would be filed and courts could simply agree to hear the ones pertaining to whatever laws they happened not to like.

But there is another reason why it is important that both the U.S. and NH Supreme Courts rejected challenges to education tax credits due to lack of standing: freedom of conscience. The plaintiffs lacked standing in these cases because the programs are voluntary. No one has to donate to a scholarship organization. Those who do not donate see their taxes collected as they’d always been. As a result, no one is compelled to pay for religious instruction, which would violate many state constitutions.

In fact, education tax credits offer a meaningful improvement for freedom of conscience over the public schooling status quo. Under the current system, everyone is forced to pay for a single official system of education that cannot possibly reflect the values of such a diverse nation. The result, as my colleague Neal McCluskey has shown, is an endless battle over the content of public schooling. Education tax credits avoid that compulsion, allowing people to choose the organization that receives their education donations. In a mature program like the one in Pennsylvania, there are over a hundred different scholarship organizations to choose from. It is thus possible to ensure funding to a diverse range of educational choices without forcing any taxpayer to support a particular sort of instruction that might violate his or her most deeply held convictions.

As I wrote three years ago, in the wake of the U.S. Supreme Court ruling, education tax credits are A “Winn” for Education and Freedom of Conscience.

Live Free and Learn: NH Supreme Court Upholds School Choice

Low- and middle-income children in New Hampshire will now be able to use tax-credit scholarships at any school they choose, whether secular or religious.

This morning, the New Hampshire Supreme Court (NHSC) followed the precedent of the U.S. Supreme Court in unanimously ruling that the petitioners challenging the “Live Free or Die” state’s scholarship tax credit law lack standing because they could not demonstrate any harm. The law grants tax credits to corporations worth 85 percent of their donations to nonprofit scholarship organizations that help low- and middle-income parents send their children to the schools of their choice.

When two anti-school choice organizations challenged the law, the Institute for Justice intervened, representing several low-income families who had applied for the scholarships. The Cato Institute filed an amicus brief defending the law’s constitutionality.

The NHSC overturned a lower court’s flawed and unprecedented decision, which had forbidden scholarship recipients from using the funds at religiously-affiliated private schools. The lower court held that the scholarship funds constituted “money raised by taxation” and therefore violated the state’s historically anti-Catholic Blaine Amendment, which states:

[No] money raised by taxation shall ever be granted or applied for the use of the schools of institutions of any religious sect or denomination. (New Hampshire Constitution, Part II, Article 83)

The NHSC did not address the merits of the lower court’s decision because it held the petitioners were unable to demonstrate that “their personal rights have been impaired or prejudiced.” Similarly, the U.S. Supreme Court, in rejecting the petitioners’ standing in ACSTO v. Winn, held that the tax-credit funds did not constitute public money because they had not “come into the tax collector’s hands.”

This is great news for the tens of thousands of students who qualify for tax-credit scholarships—parents like Melissa Cogan, who used the program to cover homeschooling expenses for her two children, Hope and Hunter.

“Without the scholarship from (the Network for Educational Opportunity), homeschool would not have been an option for us,” Melissa said. “We are a large family with very limited resources for supplies, books, workbooks, and electronic technology. The generosity of the Network for Educational Opportunity has made it possible for us to purchase everything we needed to become a successful homeschooling family.”

Such stories should make it unsurprising then that, last year, nearly 97 percent of scholarship families reported being satisfied with the learning environments they chose for their children.

NH tax-credit scholarship, parental satisfaction.

The decision’s import reaches far beyond New Hampshire’s borders. The NHSC’s ruling today takes some wind out of the sails of the Florida School Boards Association (FSBA), which is inexplicably suing the Sunshine State over its more-than-decade-old scholarship tax credit law, in a complaint that mirrors the legal reasoning of the NH petitioners.  It is likely that the Florida Supreme Court’s reasoning will mirror that of the New Hampshire Supreme Court and U.S. Supreme Court.

Certainly there are families in Florida, and elsewhere nationwide, similar to the Cogans who are craving an educational environment that works best for them. Today, the New Hampshire Supreme Court handed them a much-needed victory and, thus, the ability to live free and learn.

School Choice Lawsuit Explained

Last week, the New Hampshire Supreme Court heard oral arguments in Duncan v. New Hampshire, concerning the constitutionality of the “Live Free or Die” state’s trailblazing scholarship tax credit program. The Cato Institute filed an amicus brief in support of the program. Over at the Friedman Foundation’s blog, I summarize the law’s history and the primary legal arguments on each side, including legal standing, public versus private money, and the use of public funds at religious schools. I conclude by outlining four possible outcomes:

1. The court rules that the plaintiffs lack standing. In this case, the trial court’s opinion would be overturned and scholarship students would be able to attend the school of their choice, religious or secular.

2. The court rules in favor of the program on the merits. That would mean either the court holds that tax credits are private money or that public money may be spent at a religious school so long as it reaches the schools in a manner that is indirect and incidental to the choices of parents. As in the first scenario, scholarship students would be able to attend the school of their choice, religious or secular.

3. The court upholds the trial court’s decision. In this case, the tax-credit scholarship program would continue as it has in the last year. The trial court forbid the use of scholarships at religious schools but allowed their use at secular private schools, out-of-district public schools, and homeschool environments. In this scenario, the Institute for Justice likely would challenge the decision in federal court for violating the Free Exercise clause of the First Amendment since such a decision would require legislative hostility toward religion rather than neutrality.

4. The court rules against the program and rejects the severability clause. The trial court found that the severability clause that the legislature had added was valid, therefore the program could continue for parents selecting secular schools or homeschooling. The state supreme court could reach the same conclusion on the merits, but reject the severability clause. This would be the most devastating outcome for educational choice in New Hampshire, as it would completely obliterate the tax-credit scholarship program.

Ideally, New Hampshire’s Supreme Court will follow the precedent of the U.S. Supreme Court and the Arizona Supreme Court by holding that taxpayers’ money is their own until it reaches the tax collector’s hand.

A Governor’s Warped Priorities

The governor of New Hampshire just submitted an amicus brief in the lawsuit against the “Live Free or Die” state’s scholarship tax credit program. Last year, Governor Maggie Hassan unsuccessfully sought its repeal. The brief offers nothing new in the way of legal arguments. As with the ACLU and, unfortunately, the trial court judge, the governor’s brief tries to imagine a constitutional difference between tax credits and tax deductions and absurdly assumes that money that a private corporation donated to a private nonprofit that financially assists private citizens sending their children to private schools is somehow “public” money because the state could have collected it in taxes had the legislature so decided. This claim contradicts both logic and the U.S. Supreme Court’s holding in ACSTO v. Winn:

Like contributions that lead to charitable tax deductions, contributions yielding [scholarship] tax credits are not owed to the State and, in fact, pass directly from taxpayers to private organizations. Respondents’ contrary position assumes that income should be treated as if it were government property even if it has not come into the tax collector’s hands. That premise finds no basis in standing jurisprudence. Private bank accounts cannot be equated with the … State Treasury.

The Cato Institute submitted an amicus brief defending the constitutionality of the program back in November.

What’s noteworthy here is not the legal reasoning, but the governor’s chutzpah. First, as the Union Leader noted, “Hassan is pushing state-funded, need-based scholarships for college students while trying to eliminate need-based scholarships for students in grades K-12.” The governor’s amicus brief does not explain why direct public expenditures that students can use at a Catholic college are perfectly constitutional but a low-income student using a tax-credit scholarships at a religious elementary or secondary school would, as her amicus brief melodramatically puts it, “jeopardize both the hallowed underpinnings of religious tolerance and freedom, and the prohibition against entanglement made sacred by [the] New Hampshire Constitution.” 

Second, Hassan is a strong proponent of “research and development” tax credits that pick winners and losers among certain types of businesses and business activities, thereby distorting the market. Moreover, by the governor’s faulty logic, these tax credits constitute direct subsidies of public funds to profit-seeking entities. R&D tax credits clearly reduce state revenue to fund activities that businesses are generally doing anyway for their own financial self-interest.  

By contrast, scholarship tax credits expand the market for private education without distorting it. Parents pick winners and losers among schools rather than the government. The corporations who receive the 85 percent tax credits do not benefit financially – indeed, they’d be better off financially had they not donated at all. Moreover, the Josiah Bartlett Center projected that, if fully utilized, the scholarship tax credits would save New Hampshire taxpayers millions of dollars in the long run by reducing state expenditures by more than they would reduce state tax revenue.

In short, Governor Hassan supports corporate welfare but opposes tax credits that assist low-income families seeking the best education for their children.

New Lawsuit against School Choice Program

A North Carolina teachers union and fellow defenders of the government’s near-monopoly over education filed a lawsuit against the state’s school voucher program for low-income students, joining half a dozen other lawsuits against educational choice programs around the country. Plaintiffs made the same, tired, factually-inaccurate arguments against letting low-income parents choose where to send their children to school that we’ve come to expect. For example:

“Vouchers are bad public policy,” said Mike Ward, former state school superintendent and one of the plaintiffs. “They tear away millions of dollars that are badly needed by the public schools.”

Apparently no one told Mr. Ward that 22 of 23 studies found that public schools improved their performance in response to the competition that school choice programs generate. The last study found no statistically significant impact. NC’s government-run school system is in dire need of competition. As Parents for Educational Freedom in North Carolina point out, the latest report card from the North Carolina Department of Public Instruction reveals that “nearly 70 percent of low income students in North Carolina failed to meet proficiency standards.”

The lawsuit argues that the voucher program violates Article IX, Section 6 of the North Carolina Constitution, which requires that “all moneys, stocks, bonds, and other property belonging to the State for purposes of public education…and not otherwise appropriated by the State… shall be faithfully appropriated and used exclusively for establishing and maintaining a uniform system of free public schools.

DOJ Lawsuit Would Keep Blacks in Failing Schools

In the name of civil rights, the Department of Justice is trying to prevent black families from exercising school choice.

On the heels of the Southern Poverty Law Center’s ridiculous lawsuit against Alabama’s new school choice law, which contends that if a law doesn’t help everyone it can’t help anyone, the U.S. Department of Justice is suing to block the state of Louisiana’s school voucher program for low-income students and students assigned to failing public schools:

The Justice Department’s primary argument is that letting students leave for vouchered private schools can disrupt the racial balance in public school systems that desegregation orders are meant to protect. Those orders almost always set rules for student transfers with the school system.

Federal analysis found that last year’s Louisiana vouchers increased racial imbalance in 34 historically segregated public schools in 13 systems. The Justice Department goes so far as to charge that in some of those schools, “the loss of students through the voucher program reversed much of the progress made toward integration.”

Segregation! That’s a serious charge. What evidence does the Department of Justice cite?

In Tangipahoa Parish, for instance, Independence Elementary School lost five white students to voucher schools, the petition states. The consequent change in the percent of enrolled white students “reinforc(ed) the racial identity of the school as a black school.”

Five students! According to the National Center for Education Statistics (NCES), there were 143 white students out of 482 students at Independence Elementary School in 2010-11 (the most recent year for which data is available). Assuming that recent enrollment and racial composition is the same and that no black students received vouchers as well, that’s a 0.7 percentage point shift from 29.6 percent white to 28.9 percent white. Though the students at Independence almost certainly would not have noticed a difference, the racial bean counters at the DOJ see worsening segregation.

But the DOJ is not content merely to prevent white students from exercising school choice. The petition also cites Cecilia Primary School, which in 2012-13 “lost six black students as a result of the voucher program,” thereby “reinforcing the school’s racial identity as a white school in a predominantly black school district.” In the previous school year, the school’s racial composition was 30.1 percent black, which the DOJ notes was 16.4 percentage points lower than the black composition of the district as a whole. According to the NCES, in 2010-11 there were 205 black students out of a total enrollment of 758, so the school was 27 percent black. Assuming a constant total enrollment, the DOJ’s numbers suggest that there were 228 black students in 2011-12. The loss of six black students would mean the school’s racial composition shifted from 30.1 percent black to 29.2 percent black as a result of the voucher program. Again, imperceptible to the untrained eye but a grave threat to racial harmony according to the Obama administration’s Department of Justice.

SPLC: If You Can’t Help Every Child, You Can’t Help Any Child

Most people know the story of the boy who was rescuing sea stars that had washed up on a beach by throwing them back into the ocean. When a man scoffed to the boy that his efforts didn’t make a difference since he couldn’t save all of them, the boy tossed another sea star back into the ocean and replied, “It made a difference to that one.” The little-known ending to the story is that the boy was sued by the Southern Poverty Law Center for violating the Constitution’s Equal Protection clause.

Sadly, this is only a slight exaggeration. Earlier this week, the Southern Poverty Law Center filed a federal lawsuit contending that Alabama’s new scholarship tax credit program violates the Equal Protection clause and harms the low-income students attending failing public schools whom the law is intended to help:

[SPLC] President Richard Cohen said the new Alabama Accountability Act will take millions away from public schools and will make the failing schools worse than they are now. He said the law was promoted by Republican Gov. Robert Bentley as giving students a way out of failing schools. 

“It’s a lie. Our clients do not have a way out of the failing schools that they are in,” he said.

The Montgomery-based law center sued on the opening day of classes for most public schools in Alabama. The suit focuses on a part of the law that allows families with children in Alabama’s 78 failing public schools to move them to a non-failing public school or to a private school that participates in the program. They can get a state tax credit of about $3,500 annually to help cover private school costs.

The lawsuit was filed on behalf of eight plaintiffs who say that they can’t afford to go to private schools and that the non-failing public schools are not accessible. The lawsuit raises equal protection issues.

One of the eight plaintiffs, Mariah Russaw, said she couldn’t afford the transportation costs even if her 12-year-old grandson, J.R., could leave Barbour County Junior High School in Clayton. All junior highs in the Barbour County school system are on the failing list. The nearest non-failing public school is 19 miles away in Pike County. The nearest private school is about 30 miles away, but it is not participating in the program.

The 62-year-old grandmother said it wouldn’t matter if the private school were participating. “I cannot afford to transport him to another school,” she said.

In short, SPLC argues that if the law can’t rescue every child from a failing school, then it shouldn’t be allowed to rescue any child. Not only would this line of reasoning hobble almost every government effort to incrementally address any problem, but the argument also rests on a misunderstanding of the status quo and the law’s likely impact.

The SPLC lawsuit claims that the law “creates two classes of students assigned to failing schools – those who can escape because of their parents’ income or where they live and those, like the Plaintiffs here, who cannot.” In fact, those two classes of students already exist. In our existing education system, low-income families are trapped in failing schools while wealthier families can afford either to live in districts with better public schools or to send their children to private school. The scholarship tax credit program is too limited to solve all the existing inequities, but it moves more students out of the first category and into the second. In other words, by expanding opportunities to low-income families, it makes an already unequal education system more equal.

Moreover, there is no evidence the program does harm to students who remain in public schools. The SPLC claims that the failing public schools are “likely to deteriorate further as their funding is continually diminished” as a result of students fleeing from those schools. But a mere assertion that harm is “likely” doesn’t cut it. Had the SPLC consulted the research literature instead of their fevered imaginations, they would have discovered that 22 of 23 studies of school choice programs found that they have positive impact on public school performance. The last study found no visible impact.

In other words, the increased choice and competition help both the students who participate in the program and those students who remain in their assigned public schools. Striking down the program would thus make matters worse for the litigants and other families like them, not better. Expanding the program would improve outcomes even further. If the SPLC is truly motivated by a desire to help low-income families, it should drop its lawsuit and join the effort to expand educational options. There are lots of sea stars left on the beach and they could use a hand.