HELENA — Three Montana women have filed a legal challenge to the state’s exclusion of religious schools from a program that will provide scholarships for private-school students, leaving the state Department of Justice to defend a rule that it previously called indefensible.
The Legislature this year passed a law allowing tax credits for individual donations of up to $150 to private school scholarships or to innovative public school programs. The tax-credit program is capped at $3 million for the first year.
The Montana Department of Revenue adopted a rule Wednesday that bars religious schools from benefiting, citing the Montana Constitution’s prohibition on appropriations to religious institutions.
Kendra Espinoza, Jeri Anderson and Jaime Schaefer argue in their lawsuit that tax credits are not state appropriations, and the revenue department did not have the authority to adopt the rule because it contradicts the Legislature’s intention of benefiting all school children.
The women’s children go to Stillwater Christian School in Kalispell, and their lawsuit says they would apply for scholarships if they were available. The program could be a boon for families who can’t afford to send their children to a school of their choice, but the revenue department’s rule undermines it because most private schools in the state are religious, the lawsuit argued.
The women are represented by the Institute for Justice, a Virginia-based group that has defended school-choice programs in lawsuits in 24 states.
“It should be up to parents, not government bureaucrats, to decide what’s best for a child,” said Institute for Justice attorney Erica Smith. “The state’s own Department of Justice has come out saying this is unconstitutional, yet the Department of Revenue went ahead and did it, anyway.”
Montana Solicitor General Dale Schowengerdt submitted comments while the rule was still in draft form that said a judge would likely decide it is unconstitutional to categorically exclude religious entities from a neutral benefits program without reason.
“The Attorney General believes that it would not be defensible,” Schowengerdt wrote of Montana Attorney General Tim Fox.
But Fox will have to defend the rule in the lawsuit and another expected to be filed in federal court. The Department of Justice is the attorney for the state when an agency is sued.
Spokesman John Barnes declined to say how state attorneys will effectively defend the rule after publicly opposing it.
“It’s premature to discuss litigation we haven’t even seen, much less had time to review and analyze,” he said.
Revenue department officials have said these tax credits are different from others because they are limited by the Montana Constitution’s provisions that prevent the state from making appropriations to religious groups. They also disputed Schowengerdt in a written response to his comments.
“The rule does not exclude religious entities from neutral benefits, but limits the donations based on the language of the Montana Constitution,” department officials wrote.