Supreme Court Upholds Arizona Tuition Tax Credit Program Arizona school children and their parents won a major victory in the United States Supreme Court. In a 5-4 decision, the court upheld Arizona’s Scholarship Tax Credit Program that enables thousands of families to send their children to the school of their choice.
The program allows Arizonans to receive a dollar-for-dollar tax credit for donations to School Tuition Organizations (STO), which then allocate scholarships to deserving students. The more than 50 nonprofit STOs in Arizona award scholarships annually to about 27,000 students.
“The Arizona Scholarship Tax Credit Program works. Now, it’s constitutionally has been affirmed. Parents should be able to choose the school best meeting their children’s education needs, and this program empowers them to make that choice,” said Deborah Sheasby, Legal Counsel for Center for Arizona Policy.
The Supreme Court ruled on April 4, 2011 in the Arizona Christian School Tuition Organization v. Winn case that the opponents of the program, represented by the American Civil Liberties Union, lacked standing to challenge the 14-year-old program. The Court also ruled that the tax credits which Arizonans receive for donations to STOs are private dollars, not state money. In the majority opinion, Justice Anthony Kennedy said:
“Like contributions that lead to charitable tax deductions, contributions yielding STO tax credits are not owed to the State and, in fact, pass directly from taxpayers to private organizations. Respondents’ contrary position assumes that income should be treated as if it were government property even if it has not come into the tax collector’s hands. That premise finds no basis in standing jurisprudence. Private bank accounts cannot be equated with the Arizona State Treasury.”
The tuition tax credit program saves the state millions of dollars annually. The average scholarship is just a fraction of the amount the state spends to educate each child. Dr. Charles North of Baylor University found that the state saves anywhere between $44 million to $186 million. Read his report here.
“Everybody wins with scholarship tax credits – parents are able to educate their children in the schools they believe are the best fit, and the state saves money,” said Sheasby.