NCPA - National Center for Policy Analysis

Supreme Court Allows Education Tax Credit To Stand

October 5, 1999

The U.S. Supreme Court has refused to hear a challenge to Arizona's tax credit program, which permits funds to go to religious schools. Proponents of school choice are elated by the development, which constitutes a serious setback for defenders of the status quo in public schools.

While Arizona's plan is not a voucher program, per se, the court's action in letting the plan stand may signal its willingness to recognize religious schools for voucher purposes at some later date.

The high court's refusal to review the decision by the Arizona Supreme Court, which approved the plan, means that it is legal only in that state. While the 3-2 Arizona decision may be cited before other state courts, it is not a precedent for other states.

  • Arizona allows a taxpayer -- who does not need to have a child in school -- to contribute up to $500 a year to a School Tuition Organization, which makes scholarship grants to children attending private schools, whether church-affiliated or not.
  • Ten such organizations have been established and about $75 million has been made available for private tuitions -- with the contributing taxpayers taking their individual contributions as a credit against state income taxes.
  • In addition, taxpayers can make direct gifts of up to $200 for extracurricular activities -- and also take a tax credit.
  • In Arizona, 72 percent of private schools are religious, enrolling about 84 percent of private school pupils.

In November, the justices also refused to review a Wisconsin program that provides vouchers for up to $5,000 a year per child from impoverished Milwaukee families to attend private schools -- most of which are religious.

Sources: Linda Greenhouse, "Justices Again Avoid Church School Aid Issue," New York Times; and Frank J. Murray, "Supreme Court for Second Time Allows Vouchers," Washington Times, both October 5, 1999.


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