The Kentucky Supreme Court heard arguments Wednesday in a case that will decide whether a tax credit program supporting private schools is constitutional.
The initiative, called the Education Opportunity Accounts program, allows donors to contribute to a scholarship fund instead of paying state taxes. The initiative’s tight passage through the state legislature last year was a major victory for proponents of K-12 privatization. Opponents, however, fear the $125 million program will drain needed resources from already underfunded public schools.
A lower court judge struck down the EOA program last year, ruling it violates a provision of the Kentucky Constitution that prohibits spending public funds on private schools without first having a referendum.
The attorneys appealed to the state’s highest court. Boone County mother Akia McNeary is a plaintiff in the appeal and said she hopes the EOA program will help her continue to pay for her children to attend Zion Christian Academy in Florence.
“More wealthier families, they have the choices that low to middle income families don’t have,” McNeary told WFPL News. “So why can’t we just level the playing field and have the same choices as them?”
McNeary said Zion Christian Academy was a better fit for two of her children and she liked the school’s faith-based curriculum. She has a third child who attends public school.
The six judges present heard approximately one hour of arguments for and against the EOA program. Their decision will come down to whether or not the program spends public money on private schools.
Lawyers for the state attorney general’s office, who defend the law, say no.
“Bill 563 [the EOA program] does not actually spend public money. It just lowers taxes for Kentuckians,” attorney Matthew Kuhn said.
Kuhn and his colleagues argued that the funds came from donors, not the Kentucky state treasury.
Under the EOA program, individuals and businesses could donate to the fund and receive a tax credit of up to 97% in return. Families could then apply to use the funds for education costs. In counties with more than 90,000 residents, families could use the funds for private school tuition.
Questions posed by several judges suggested skepticism of the state’s argument.
“Mr. Kuhn, I agree that in the strictest sense of the word, this does not ‘spend’ public money,” Judge Michelle Keller said. that might otherwise be public money because of the tax credits that are given.I don’t know of many other tax credits for individual taxpayers that are almost dollar for dollar.
Judge Lisabeth Hughes, a former tax attorney, noted that Kentuckians’ taxes are withheld throughout the year, meaning funds enter state coffers before donors are reimbursed with the tax credit.
Attorney Ben Field, of the Institute for Justice, a libertarian think tank, rebutted.
“The way the tax refund should be conceptualized is that the government never had a legitimate claim to that money,” Field said. “I just overpaid for it, and I’m being reimbursed because it never belonged to the government.”
Lawyers for the Institute for Justice have won several major court decisions upholding government support for private schools, including the landmark Espinoza 2020 US Supreme Court ruling.
Opponents of the law are represented by lawyers from the public education advocacy group Council for Better Education. The group won its own historic lawsuit in 1989: the Pink decision, in which the Kentucky Supreme Court ruled that lawmakers must adequately fund the state’s public education system.
Council for Better Education lawyer Byron Leet said that despite the mechanics of the EOA program, the funds are public money.
“It was done in a smarter way to try to get around that obvious [constitutional] prohibition. But the effect is absolutely the same. The effect is that the state of Kentucky bears the financial burden — not the individual taxpayer when you offer someone dollar-for-dollar credit,” Leet said.
The judges did not say when they expected to make a decision.