US Supreme Court: Arizona Taxpayers Lack Standing to Challenge State Income Tax Credit for Organizations That Support Religious Schools

I believe Justice Kagan's dissent in this case is correct.  Whether through a tax credit or a tax appropriation, the Arizona taxpayer is directly affected under this program.  Thus, any Arizona taxpayer should have standing to challenge the tax credit.

Adam W. Howell, Esquire

Below is the text of the Wall Street Journal Article discussing the Supreme Court's Opinion.

By Ashby Jones

The Establishment Clause of the U.S. Constitution seemed poised to take center stage on Monday in a case which asked whether an Arizona tax-credit program violates the separation of church and state doctrine.

But by a 5-4 vote that split along the right-left faultline, the Supreme Court on Monday upheld the program without reaching the constitutional issue. Click here for the WSJ story; here for the NYT story; here for the recap over at Scotusblog; here for the opinion itself.

The upshot: the Court upheld an Arizona tax-credit program that offers a dollar-for-dollar reduction of state income tax payments to organizations that support religious schools. The ruling could open the door to the expansion of such programs nationwide.

In an opinion penned by Justice Anthony Kennedy, the justices ruled that Arizona taxpayers have no standing to challenge the state’s tax-credit program on grounds that it violates the First Amendment prohibition of government “establishment of religion.” The decision effectively overruled decades of precedent permitting lawsuits against government programs that subsidize religious institutions through tax incentives.

“Every state that is considering a tax-credit program can rest easy,” said Robert Enlow, president of the Foundation for Educational Choice, a group which favors public subsidies for private schools.

Normally, an individual can sue the government only by alleging a personal injury from its misconduct, not because he believes it simply is overstepping its authority.

But in 1968, the Supreme Court created an exception for religious subsidy cases, observing that otherwise it would be virtually impossible to enforce the Establishment Clause.

Writing for the majority, Justice Anthony Kennedy explained that the exception applied only to government appropriations intended to subsidize religion. “A dissenter whose tax dollars are ‘extracted and spent’ knows that he has in some small measure been made to contribute to an establishment [of religion] in violation of conscience,” Justice Kennedy wrote.

In contrast, a tax credit implicates funds never collected in the first place. “When the government declines to impose a tax,” Justice Kennedy wrote, “there is no such connection between dissenting taxpayer and alleged establishment.”

In her first major dissent, Justice Elena Kagan called the distinction between tax appropriations and credits “arbitrary.” “Either way, the government has financed the religious activity. And so either way, taxpayers should be able to challenge the subsidy,” she wrote.

The Op-Ed writers at the WSJ applauded the ruling, claiming that it was notable “mainly for its insight into the progressive mind.”