In a unanimous decision, the Kentucky Supreme Court ruled that the state’s “Education Opportunity Account Act” (EOA Act) violated the Kentucky Constitution. The court affirmed a lower court ruling that found the measure unconstitutional.
The measure was passed in March 2021, as the Kentucky General Assembly overturned a veto from Governor Andy Beshear to pass House Bill 563.
The EOA Act took effect on June 29, 2021, and was immediately challenged in court with several lawsuits brought by Secretary of Finance Holly Johnson; the Council for Better Education, which represents 168 school districts; and individual school districts and parents.
The act allowed limited school choice, as it:
- Required school districts to create policies to allow students to switch districts and let funding follow them.
- Created an education opportunity account (EOA) program for a variety of education expenses and public school tuition in all counties. Donors received a tax credit for money that they put into the fund.
- Allowed EOAs to be used for private school tuition in Jefferson, Fayette and Kenton counties.
- Funded full-day kindergarten.
It was the EOAs that were under fire from the lawsuits, as those who put their own money into them received tax credits against their income taxes. The challenges said those tax credits actually constituted appropriations from the government.
The Kentucky Supreme Court affirmed a lower court ruling that found the measure unconstitutional. The decision said the act violated a provision in the state constitution that asserts “no sum shall be raised or collected for education other than in common [i.e., public] schools until the question of taxation is submitted to the legal voters.”
The court said that “the income tax credit raises money for nonpublic education and its characterization as a tax credit rather than an appropriation is immaterial.”
The Kentucky Education Association, the state teachers union, applauded the decision, saying,
This is a victory for Kentucky’s public schools and public school students. It’s always been clear to the plaintiffs and their supporters that the Kentucky Constitution prohibits any attempt to divert tax dollars from our public schools and students without putting the question to the voters.”
But school choice proponents disagreed. The Family Foundation of Kentucky (TFF), a Focus on the Family-allied family policy council, said the credits belonged to the individual – not to the government. In a statement, Martin Cothran, spokesman for TFF, said:
The law the Court struck down would have allowed parents to use a tax credit from their state income taxes to apply to tuition expenses at nonpublic schools. The Court said that this amounted to the government funding private schools through tax money.
The Court essentially said that the money you get to exclude from your tax liability is governed by rules governing money you paid in taxes. But a tax credit is money you get to exclude from what you pay in taxes, it’s not money the government gets and then turns around and spends.
For the Court to call tax credits an ‘expenditure’ reflects a basic misunderstanding of what a tax credit is.
He went to explain:
If you buy something from the store at a discount, the money you saved from the discount is not money the store gave you. It is money you didn’t have to give it. That should be pretty obvious. To think anything else would apparently require a long, expensive education and a law degree (TFF’s emphasis).
Not only is this bad reasoning, but it hurts families who can’t afford to send their children to private schools. The irony is that many of the people who oppose school choice send their own kids to private schools.
EdChoice Kentucky, and organization which worked to explain the EOA program to parents and help them act on it, was also dismayed by the loss but vowed to keep on fighting for educational freedom for the state.
EdChoice President Vandiver released a statement saying:
Today, the Kentucky Supreme Court issued a decision that will hold back thousands of Kentucky students from reaching their full potential.
He explained that courts across the country have “universally upheld similar school choice programs as legitimate expressions of parents’ fundamental rights over their children’s education.”
“This effort to empower parents is too important to stop, and we will continue working to give every Kentucky student access to an education as unique as they are,” he added.
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