Of the two political options, tax credits are more legally viable than vouchers, because they are private funds, while vouchers are government funds.
State courts have repeatedly ruled that vouchers are government funds, and the disbursement of government funds to religious schools is expressly prohibited in most states by anti‐Catholic “Blaine” amendments dating back to the turn of the last century. Many states also have “compelled support” clauses, which accomplish the same result through different language. And because the elimination of religious schools from choice programs excludes around 90 percent of current private schools, this renders any such program largely ineffectual.
Religious clauses are the highest‐profile threats to voucher programs, but vouchers are vulnerable to many other constitutional provisions as well. Recent voucher defeats were based upon seemingly innocuous education clauses common in state constitutions. In Colorado vouchers were brought down in 2004 by a clause mandating local control over local revenue, and in Florida they were overturned in 2006 based on a clause mandating a “uniform” system of education. Neither of these rulings had anything to do with religion, but both rested on the fact that vouchers are considered government funds.
In 2002, University of North Texas professor Frank Kemerer reviewed each state’s case law and the state’s judicial climate in order to characterize the likely orientation of the courts if a voucher law were to be challenged. He concluded that 17 states have a restrictive orientation toward vouchers, 19 states have a permissive orientation, and 14 states have an uncertain orientation. So far, voucher laws have been ruled unconstitutional in two out of the four states in which they’ve been challenged: Colorado and Florida. (These cases concluded after Kemerer’s paper, which listed them as “uncertain,” was published.)
The Institute for Justice, a libertarian public interest law firm that has defended many school choice programs in court, comes to a similar, if more optimistic, conclusion in a recently completed comprehensive study of state constitutions and legal precedent. IJ recommends that tax credits, but not vouchers, be pursued in 32 percent of states and that either credits or vouchers be pursued in most of the rest.
IJ’s analysis likely underestimates the legal difficulties vouchers face in states even without restrictive Blaine or “compelled support” amendment precedent. The plight of Florida’s and Colorado’s voucher laws shows that courts disposed against vouchers can find creative ways to overturn them, relying upon their status as government funds and myriad other constitutional provisions.
The general legal difficulties that vouchers face, in other words, can significantly dampen political and legislative support relative to tax credits. Politicians and other political actors consider the disposition of the courts and are much less likely to fight for and pass legislation that has a high probability of being voided by the courts.
States with particularly restrictive clauses, precedents, and conservative courts may face unanticipated difficulties even with conservative courts. Liberal courts are disposed to discover something in state constitutions that will disqualify the law, regardless of whether or not the constitution prohibits vouchers according to a strict constructionist reading. But conservative courts that may be friendlier to school choice will also adhere more closely to a strict reading of the letter and intent of the constitution. If a state constitution contains language meant to stop government funds from going to religious or private institutions for education, conservative judges may feel constrained to rule against vouchers even though the funds go first to families rather than the religious organizations.
Because education tax credits are taxpayer funds rather than government dollars, they attenuate or avoid many legal difficulties and the record of court challenges proves the point. The courts have never overturned modern education tax credits or deductions — these policies have been explicitly upheld in all state and federal legal challenges. School‐choice opponents have thrown everything at education tax credits, to no avail.
People working on the school choice issue also agree that tax credits are more legally viable than vouchers. In 2006, the Mackinac Center for Public Policy published the results of a survey of organizations working on school choice that I conducted; it found that 67 percent of respondents in a think vouchers are more likely to be challenged in court, compared to just three percent who chose tax credits. And by a margin of 53 points, respondents also thought that tax credits were more likely to survive a court challenge.
Even opponents of school choice agree that tax credits are more viable than vouchers. Marc Egan, the director of the Voucher Strategy Center for the National School Boards Association, has written extensively on the best strategy for defeating school choice efforts. The NSBA is as committed in its opposition to school choice as is the National Education Association. Egan describes vouchers as “cash government payments,” but agrees that education tax credits are “technically not government dollars.” This leader in anti‐school‐choice strategy describes tax credits as “bullet‐proof on constitutional issues” because they have survived every legal challenge to date. People on both sides of the school choice issue, and the actual record in court, agree that tax credits are the most likely to put legal fears and problems to rest.
Tax credits are less likely to be challenged and less likely to be overturned by state courts. It’s difficult enough to convince legislators to stand up to the government education industry and support school choice without them worrying that the law will be found unconstitutional. Education tax credits come with little of the legal baggage under which vouchers currently strain.
School‐choice supporters should keep that in mind.