What should have been obvious to all has now been confirmed: Georgia’s tax-credit scholarship program is constitutional. It’s a victory for the 13,000-plus students who attend private schools thanks to the program, and for school choice in general.
The state Supreme Court released its opinion in the case known as Gaddy this morning, and the plaintiffs lost on every count — unanimously. That shouldn’t come as a surprise, given that similar lawsuits have failed in states from Florida to Arizona, as well as at the U.S. Supreme Court. But it’s worth noting the specific language used in the opinion written by Justice Robert Benham (who was appointed to the court by Gov. Joe Frank Harris and is hardly a right-wing jurist).
As to whether the plaintiffs had standing to sue as taxpayers:
“The notion that a tax credit from state income tax liability decreases the total revenue pool and increases the tax burden on the remaining taxpayers, however, is purely speculative. … Even assuming an adverse effect on the state’s budget, it requires pure speculation that lawmakers will make up any shortfalls in revenue by increasing the plaintiffs’ tax liability. They could just as easily make up shortfalls by reducing the budget. Further, a tax credit that funds a program that encourages attendance at private schools might, in fact, create a tax savings by relieving public schools of the burden of educating the students who chose to attend private schools.” (emphasis added)
As to whether these private transactions amount to public spending in support of religious organizations, just because tax credits are involved:
“The statutes that govern the Program demonstrate that only private funds, and not public revenue, are used. As demonstrated by HB 1133, the Program sets out a scheme by which (1) donations of private funds by private individuals or entities, (2) made to nongovernmental SSOs to be used for scholarships to private schools, whether secular or religious, (3) may be claimed as tax credits by individual and corporate taxpayers. Individuals and corporations chose the SSOs to which they wish to direct contributions; these private SSOs select the student recipients of the scholarships they award; and the students and their parents decide whether to use their scholarships at religious or other private schools. The State controls none of these decisions. Nor does it control the contributed funds or the educational entities that ultimately receive the funds. … The Program does not involve the distribution of public funds out of the State treasury because none of the money involved in the Program ever becomes the property of the State of Georgia.” (emphasis added)
And as to the silliest argument made against the program, that it amounts to state spending because sometimes the state has to refund money withheld from taxpayers to fulfill the credit:
“This argument was rejected by the Arizona Supreme Court in Kotterman, which noted that ‘under such reasoning all taxpayer income could be viewed as belonging to the state because it is subject to taxation by the legislature.’ We agree with that assessment. When the state refunds money for overpayment of taxes, it is not remitting public funds but is returning the taxpayer’s own money.”
You can read the entire opinion here. If you do, you will see that even in its modesty it undercuts most every objection opponents of the tax-credit scholarship program make against it. They don’t have to like the program, but after this case they’re going to have to live with it.
Now for where this issue goes from here: Legislators who have been reluctant to increase the program’s cap from $58 million have just lost another of the flimsy excuses they have cited for standing pat. A bill to increase the cap died in the Senate as the 2017 legislative session drew to a close. It deserves a second life come 2018.