Montana High Court Weighs Ban on Religious School Tax Credit

It will consider whether a tax credit program discriminates against religious schools in a school choice dispute

By Mat Volz, Associated Press

HELENA – The Montana Supreme Court will consider Friday whether a tax credit program discriminates against religious schools in a school choice dispute that has drawn attention from educational groups across the U.S.

The program, approved by the Republican-led Legislature in 2015 as an alternative to a school voucher program, gives up to $150 in tax credits for donations made to scholarship programs for private schools.

The state Department of Revenue wrote rules that said religious schools could not participate in the program because the Montana Constitution prohibits direct or indirect state spending on religious schools.

The rules prompted claims of discrimination from religious groups and a lawsuit by three women whose children go to religious schools. A judge in Kalispell agreed with the women last May and struck down the revenue department’s religious school exclusion.

The department appealed to the state Supreme Court, which was scheduled to hear arguments in the case at the University of Montana.

“We have clear separation of church and state that public appropriations cannot be used for religious institutions,” department spokeswoman Mary Ann Dunwell said.

Richard Komer, an attorney for the Institute for Justice representing the parents who sued, said tax credits are not state money and that private donations are being given to students as scholarships, not directly to the religious schools.

“Excluding parents who choose religious schools is a violation of the equal protection of the laws,” he said.

The case has generated national interest, with 10 educational and civil liberties groups weighing in with the court. That includes the U.S. government, which wrote in a court filing that Montana’s religious school exclusion violates the First Amendment by denying students participation in the program for religious reasons.

For all the attention, the program has not generated much money. People claiming the tax credits donated $32,129 to private school scholarship groups in 2016 and pledged $7,300 through the first 11 months of 2017, according to the Department of Revenue.

The 2015 law also allowed $150 tax credits for donations to innovative educational programs in public schools. That resulted in $7,851 in donations in 2016 and $3,150 pledged through the first 11 months in 2017.

State lawmakers had set $3 million caps for the private school scholarship program and the public school innovation program.

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