Supreme Court Dismisses Voucher Challenge

April 5, 2011 — In a decision announced today, the Supreme Court permitted Arizona to continue its School Voucher Program. Arizona Christian School Tuition Organization v. Winn, 563 U.S. ___ (2011). The decision did not address any First Amendment (“Establishment Clause”) issue substantively. Instead it focused on what we lawyers call “standing.” Standing is a less-than-fancy term that refers to a party’s ability to bring a lawsuit. When challenging a law, “standing” requires that the party have suffered some form of injury, loss, or harm because of the law.

There is a form of “standing” that attorneys refer to as “taxpayer standing.” In this country, there is a rule generally prohibiting people from using “taxpayer standing” to challenge laws. This has been the general rule since at least the early 1920s. As with most rules, though, there are exceptions. One of these exceptions falls in the area of First Amendment (“Establishment Clause”) violation claims. This exception allows standing where government expenditures violate the First Amendment. This exception is narrow. The person challenging the law must be a taxpayer, the challenged law must involve the government’s authority to “tax and spend,” and the challenged law must allegedly violate the First Amendment.

In the Arizona case, the Plaintiffs challenged the tax credit (“voucher”). By challenging the tax credit, the Plaintiffs had to speculate or estimate the potential damages first to the State of Arizona and then further speculate on how those damages would impact the individual taxpayer in Arizona. In the decision, the Court noted the difference between government expenditures and tax credits. Government expenditures involve the extraction of money from a citizen and the spending of that citizen’s money in various, different areas. On the other hand, a tax credit allows a citizen to spend his money, tax-free, as he sees fit. “When Arizona taxpayers choose to contribute to [School Tuition Organizations], they spend their own money, not money the State has collected from respondents or from other taxpayers.  Arizona’s §43–1089 does not ‘extrac[t] and spen[d]’ a conscientious dissenter’s funds in service of an establishment, or ‘force a citizen to contribute three pence only of his property’ to a sectarian organization.” Arizona Christian School Tuition Organization v. Winn, 563 U.S. ___ (2011).

In other words, one of the Court’s holdings is to recognize that tax credits are not forms of government spending. Instead, tax credits empower individual citizens to spend their own money as they see fit. The decision fits with the Court’s jurisprudence on the issue of “standing” and clarifies the extent to which people can assert “taxpayer standing” to challenge neutral tax credits. The decision will require the lower federal courts to analyze whether a particular law allows citizens to spend their money as they see fit or whether the law results in government spending upon a particular program, which program allegedly violates the First Amendment.

I commend a reading of the decision to anyone interested in the nuances of the Federal Judiciary. It lays out well the history of “taxpayer standing” as well as the general precepts of the Rule Against Taxpayer Standing and its specific, limited exceptions. You can find a link to the decision above, in the first paragraph of this posting.


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