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The Supreme Court of the United States has upheld an Arizona program which grants tax credits for contributions to scholarship programs that provide tuition support to students attending K-12 private schools.

“We are extremely pleased with the Court’s ruling,” said Ned Dolejsi, executive director of the California Catholic Conference.  

“Parents have the right to direct their children’s education—meaning that they ought to be able to choose a school that supports their values, meets their child's academic challenges and needs, and cultivates their child's natural talents and interests,” said Dolejsi.  “With this decision, the U.S. Supreme Court has upheld a vital parental right.”

Arizona’s education tax credit legislation, enacted in 1997, has withstood multiple prior legal challenges—including the 2010 Ninth Circuit Court ruling which brought this case to the U.S. Supreme Court. The High Court overturned the Ninth Circuit’s ruling in a 5-4 decision.  

Arizona’s law provides a dollar-for-dollar credit against state income tax liability for contribution to school tuition organizations (STOs).  Each STO must allot at least 90 percent of the contributions it receives in the form of scholarships to be used at a non-public school. The tax credit is capped for Arizonans at $500 for individual filers and $1,000 for married couples.  In 2009, $52.1 million paid by STOs offered 27,582 scholarships averaging nearly $1,900 each.  

Writing for the majority, Justice Anthony Kennedy said that the contributions were not a direct state appropriation but “resulted from the decisions of private taxpayers regarding their own funds.”

"Like contributions that lead to charitable tax deductions,” wrote Kennedy, “contributions yielding STO tax credits are not owned by the State, and in fact pass directly from taxpayers to private organizations."

In its decision, the Court accepted the argument that the education scholarship program could provide "immediate and permanent cost savings" for overburdened state budgets and asserted that by helping students obtain scholarships to attend both independent and faith-based schools, an STO program can relieve burdens placed upon public schools.

In addition to the STO tax credit, Arizona’s program also allows individuals to claim up to $200 ($400 for married couples) for contributing to a public school for extracurricular activities or character education programs.

“For our own state, we believe that any similar educational tax relief program should be designed for the benefit of all California school children attending our public, independent, and faith-based schools. This is for the child's good, the family's good, and the common good,” added Dolejsi.

For More Information contact: This e-mail address is being protected from spambots. You need JavaScript enabled to view it. ?subject=Arizona%20Scholarship%20Program">Raymond Burnell, education specialist.