Justices to Review Tuition Tax Credits in Arizona

(CN) - The Supreme Court on Monday agreed to consider the constitutionality of an Arizona scholarship program funded by tax credits. Taxpayers said the program funnels public money into religious schools in violation of the Constitution's separation of church and state.

The 9th Circuit has vigorously defended its April 2009 decision to reinstate the taxpayer challenge, despite an eight-judge dissent urging further review.

"Parents who are unwilling to send their child to a religious school may be denied access to program benefits," Judge D.W. Nelson wrote.

Established by the Arizona Legislature in 1997, the program gives taxpayers a dollar-for-dollar tax credit for donations to school tuition organizations, or private nonprofit groups that allocate at least 90 percent of their funds to tuition grants and scholarships.

Taxpayers said some of these organizations, including the three largest, force parents to use the scholarships at religious schools.

The 9th Circuit turned down three petitions to rehear the case en banc.

The judges who would have reviewed the panel's decision argued that the program involves private choice, not state action advancing religion. Judge Diarmuid O'Scannlain said the money reaches religious schools based solely on the decisions made by parents, not the state.

"I must confess that I am at a loss to understand how a reasonable observer ... could conclude that the 'government itself' has endorsed religion in this case," O'Scannlain wrote (original emphasis).

Judge Nelson pointed out that the program, though seemingly neutral, creates an "overwhelming disparity" in the number of scholarships available at religious schools versus secular schools, because it lets tuition groups favor religious schools.

Without comment, the Supreme Court agreed to take up the case.

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