U.S. Supreme Court

Supreme Court Tosses Religious School Tax Credit Case on Standing Grounds


The U.S. Supreme Court has dismissed an establishment clause challenge to a tax credit program that helps fund scholarships at religious schools, ruling that the taxpayers who sued don’t have standing to pursue the case.

Justice Anthony M. Kennedy wrote the majority opinion (PDF) in the 5-4 case. The plaintiffs’ mere status as taxpayers was insufficient to create standing, Kennedy said. His opinion sees a difference between direct governmental expenditures and tax credits. In the latter instance, he wrote, “any financial injury remains speculative.”

The Arizona program provided individual tax credits of up to $500 for contributions to groups that in turn funded private school scholarships, including scholarships to religious schools.

Kennedy concluded his opinion with a cautionary note about activist courts. “Few exercises of the judicial power are more likely to undermine public confidence in the neutrality and integrity of the judiciary than one which casts the court in the role of a Council of Revision, conferring on itself the power to invalidate laws at the behest of anyone who disagrees with them,” he wrote.

“In an era of frequent litigation, class actions, sweeping injunctions with prospective effect, and continuing jurisdiction to enforce judicial remedies, courts must be more careful to insist on the formal rules of standing, not less so.”

In a concurring opinion, Justice Antonin Scalia argued that the Supreme Court’s 1968 taxpayer standing decision Flast v. Cohen should be overruled. He was joined by Justice Clarence Thomas. The majority and dissenters are arguing whether the Arizona taxpayers fall within Flast’s narrow exception allowing taxpayer standing in establishment cases, Scalia said. Flast “is an anomaly in our jurisprudence,” Scalia said, and he would repudiate the decision.

Justice Elena Kagan dissented. She was joined by Justices Ruth Bader Ginsburg, Justice Stephen G. Breyer and Justice Sonia Sotomayor.

The tax credit program has cost Arizona $350 million in diverted revenue, Kagan said. The majority’s “novel distinction in standing law between appropriations and tax expenditures has as little basis in principle as it has in our precedent,” she wrote.

The combined cases are Arizona Christian School Tuition Organization v. Winn and Garriott v. Winn.

Prior coverage:

ABAJournal.com: “Kagan Hits Acting SG’s ‘Silly and Fictional’ Interpretation of Taxpayer Standing”

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