Arizona Corporate Tax Credit Scholarships - Release: 10-12-2006
Arizona Parents and Institute for Justice Ask Court to Dismiss Third Lawsuit Against School Choice
WEB RELEASE: October 12, 2006
Lisa Knepper: (703) 682-9320
Tim Keller: (480) 557-8300
Phoenix—Arizona parents represented by the Institute for Justice and its Arizona Chapter moved aggressively today to defend school choice in the Grand Canyon State, asking the Maricopa County Superior Court to dismiss outright a new legal challenge filed against the state’s corporate tax credit scholarship program.
“This frivolous lawsuit flies in the face of settled law embracing school choice and should be dismissed immediately,” said Tim Keller, executive director of the Institute for Justice Arizona Chapter. “The legal antics of school choice opponents should not be allowed to thwart the promise of expanded educational opportunities for Arizona families.”
Three special interest groups opposed to school choice, the Arizona School Boards Association, ACLU of Arizona and Arizona Center for Law in the Public Interest, filed a lawsuit on September 19 challenging the expansion of the state’s successful scholarship tax credit program to include corporate donations to non-profit organizations that provide private-school scholarships for low- and middle-income families. The program went into effect on September 21 and is continuing during the litigation.
The Arizona Supreme Court already upheld the scholarship tax credits for individual donations against a nearly identical legal challenge under the Arizona and U.S. constitutions in 1999 in the landmark Kotterman v. Killian case, and a federal district court upheld the same program in 2005. In 2002, the U.S. Supreme Court upheld Cleveland’s school choice program under the federal Constitution.
The Honorable Thomas A. Zlaket, former Chief Justice of the Arizona Supreme Court and author of Kotterman, joined the Institute for Justice as Of Counsel in defense of corporate tax credit scholarships.
IJ represents four Phoenix-area families who believe that their current public schools are not providing the services and individual attention their children need to succeed. Each of these families has picked a private school that will better suit their children, but none can afford the tuition without help from the expanded scholarship program.
“Without a good education, my children won’t be able to achieve their American Dream—to become in life what they want to become,” said Stefanie Ortega, a single mother with two daughters. Stefanie applied for scholarships last year through the individual tax credit program, but there were not enough funds, so she was put on a waiting list. “Expanding school choice is so important for parents like me who want a better school, but can’t afford it. These scholarships are our only way.”
Not only is this latest attack against school choice wrong on the law, but two new reports released today by the Institute for Justice directly undercut other claims by school choice opponents.
Arizona has a well-established history of offering tax credits to promote social welfare, including more than two-dozen programs that offer incentives for resource conservation, economic investment and charitable contributions. At $10 million in its first year, the scholarship program represents only 4.5 percent of total tax credits claimed by Arizonans, and just one-third of one percent of state revenue—in contrast to a public education budget that grew by $480 million in the last legislative session.
Moreover, a new fiscal analysis of the corporate tax credit scholarships projects that the program will likely save the State of Arizona an estimated $57.2 million. That fiscal analysis and a review of state tax credit data are available online at www.ij.org/schoolchoice/az_taxcredits3/index.html.
“This program is a win-win-win—for parents, taxpayers and public schools that have more incentive than ever to improve,” added Keller.
State data also undercut the claim tax credit scholarships violate Arizona’s Blaine Amendment—an argument already rejected by the Arizona Supreme Court. Arizona taxpayers claimed deductions for charitable contributions amounting to more than $11 billion from 1998 to 2003, and at least 20 organizations eligible for such donations are faith-based.
“The Arizona Supreme Court made clear that scholarship tax credits benefit parents and children—not schools, religious or non-religious,” said Keller. “Opponents of school choice are asking the courts to unravel years of precedent and practice to halt a policy they don’t like.”
Opponents also claim the program violates a separate provision of the state Constitution providing for the maintenance of public schools. But this provision says nothing about prohibiting additional educational programs that help parents who choose private schools. In fact, the Arizona Supreme Court noted that school choice programs “further the objective of making quality education available to all children within a state.”
“Opponents of school choice are proving that they will go to any length to prevent parents of modest means from choosing the school that best serves their children’s needs,” said Chip Mellor, IJ president and general counsel. “We hope the courts will move quickly to dismiss this challenge and vindicate the rights of parents to choose the school that’s best for their children.”
The Institute for Justice successfully defended Arizona’s scholarship tax credits before the Arizona Supreme Court and is currently defending the program in federal court. IJ also helped win a victory in the U.S. Supreme Court for school choice, representing parents in Cleveland’s school choice program, and successfully defended vouchers in Milwaukee and tax credits in Illinois. IJ is also working to open Maine’s century-old school choice program to both religious and non-religious schools.