Ep. 43: An Update on Montana’s Tax-Credit Scholarship Case

April 3, 2018

In today’s episode of EdChoice Chats, Vice President of Communications Jennifer Wagner interviews Vice President of Legal Affairs Leslie Hiner about Montana’s Espinoza v. Department of Revenue case, which involves the state’s tax-credit scholarship program. Leslie talks about why this case is so important and what it could mean for school choice programs around the country.

Jennifer Wagner: Welcome to another episode of EdChoice Chats. I’m Jennifer Wagner, our vice president of communications, and I am joined today by Leslie Hiner, our vice president of legal affairs and the head of our newly-launched Legal Defense and Education Center. We are here today to talk about Montana. So welcome, Leslie.

Leslie Hiner: Well, hello. Thank you.

Jennifer Wagner: Well, what’s going on in Big Sky Country? Talk to us about this April sixth hearing and this ongoing litigation that’s been going on there for more than two years.

Leslie Hiner: Montana has a very important litigation going forward. But first, let me tell you what first started the litigation. In Montana, the legislature adopted a tax credit scholarship program. Now it wasn’t a huge program, but every child in the State of Montana is eligible, and every person in Montana could give $150 to a scholarship organization, and would receive a tax credit as a result of making that contribution. And then that money then would be given in scholarships to children.

Now the law, as it was written, also said that all schools could apply and participate, including religious schools. However, the Department of Revenue was tasked with implementing that law and the Department of Revenue, when putting together rules for the program, put together a rule that said that no religious schools could participate.

Well, that was a big problem in two ways. First, it was a problem to the legislators, who were very quick to respond, “No. You got that wrong. The law actually says religious schools can participate. That’s exactly what we wanted. That’s exactly what the statute says. That’s exactly what you need to implement.”

And the second thing is that there were some parents who stepped up, who desperately needed these scholarships, and they were very upset about the idea that first, suddenly, they were getting some help for their kids.

And then, just as suddenly, that help was disappearing as a result of some crazy rule made by a department, a state agency, in Helena, very far away from where they live. This is what gave rise to the litigation.

Jennifer Wagner: Well, that’s really interesting, Leslie, and it sounds like this could have much, much bigger implications beyond this April 6th hearing for the School Choice Movement. Tell us a little bit about how that looks, regardless of what happens on April sixth.

Leslie Hiner: The larger implications for the School Choice Movement go back to the Trinity Lutheran case decided by U. S. Supreme Court last year, where the court ruled then in a widely-available public benefit program, that you can’t exclude a religious entity just because they’re religious, just because it’s a church, just because it’s a church school. That is a violation of the First Amendment of the Constitution. However, there were two different cases that we thought would be test cases of that ruling, that the court sent back to both Colorado and New Mexico, but those have not proven to be cases that are perfect to test Trinity Lutheran.

This case in Montana, which by the way, is called Espinoza v The Department of Revenue. This case is a very clear cut case. The only issue here is whether or not these religious schools can be included in this tax-credit scholarship program. So it’s truly, well, let me put it this way. I really hope we win this case at the Montana Supreme Court. But in the event that we would not, this case would certainly have the possibility to be appealed up to the U. S. Supreme Court, should they choose to take it.

Jennifer Wagner: Well, we’ll see what happens on that front. Now you’ve talked about and made a very rational case for parents, legislators, the intent of the program, the will of the people being on the side of allowing all schools to participate. Could you talk for a minute about who is opposing us on this litigation.

Leslie Hiner: Well, I don’t often like to say the usual suspects, but in this case, it’s the usual suspects. So one of the lead groups is the Montana Teachers Union, which is part of a coalition, and the coalition includes 90 different school districts, and school district associations that comprise the school boards, and administrators. And also, I think it’s important to note that the Montana Teachers Union has also recently merged with the Montana Federation of Public Employees. Now I’m not sure that the public employees have signed up on this, but now they become part of this, as well, apparently.

Additionally, it’s the ACLU, the National ACLU, plus the ACLU of Montana, Americans United for Separation of Church and State, and the Anti-Defamation League. Again, these are the same groups, the teachers unions, the ACLU, Americans United for Separation of Church and State. We see them as opponents in almost all of the school choice litigation.

Jennifer Wagner: Okay, the usual suspects it is. It’s interesting to me, and this is less of a legal question and more of a philosophical question, that a lot of these groups who do oppose implementation of programs or the writing of programs that allow public dollars to flow to private schools, including religious schools—they don’t ever seem to have any problem with that at other levels of our education system, even though those are also public dollars. Do you think we’re ever going to get to a point where people accept that this is also the norm in K– 12?

Leslie Hiner: Well, I think it’s pretty clear, that parents understand school choice implicitly. Let’s see. The legislature appropriates money for your child to be educated. That money goes to a public school. However, under a school choice program, the parent gets the option of using a portion of that same money to send the child to a private school, if that is in fact what their child needs. That’s real common sense, that parents, they get this very quickly. So truly, the arguments against school choice, they become very academically self-serving by the opponents who have a very real vested interest in the outcome of this.

For us, we’re just trying to help parents. Parents who need help in finding that right education for their kids, to make sure that they have the option to do that, and that it’s not just that we say there’s an option, but that it’s a real option. These parents can, in fact, use a portion of those tax dollars that have been appropriated for their children for education, that the parents actually have the means to make the proper choices for their own children’s education.

Jennifer Wagner: Seems like common sense to me. Now this effort in Montana that you are a part of, is all part of our new Legal Center, which is now … Let’s see, almost four months old. You will be out in Montana for this hearing?

Leslie Hiner: Absolutely. Yes, I will definitely be there. I should note, that the plaintiffs Kendra Espinoza, a mom with a couple daughters from Stillwater, Oklahoma, which is in a very rural … Well, Montana’s a very rural state, but it’s a rural area in a rural state in Northwestern Montana. She will be there, as well. She’s being represented by the Institute for Justice, and Dick Comer, in particular, who’s been a longtime friend of EdChoice, and for me, personally, and is a great lawyer. I don’t envy the lawyers on the other side who will have to argue against him.

Jennifer Wagner: I would not want to go up against Dick Comer, and I think the partnership that we have, that you have with IJ, has been excellent over the years, and is probably only going to get stronger now that you are heading up the LDEC, as we call it around here—the Legal Defense and Education Center—so that’s exciting. So you’ll be out there on April 6th.

Tell our listeners how soon do you expect to have a resolution in this case one way or the other so we know maybe going forward what that strategy is, if we have to wind up going up to the Supreme Court.

Leslie Hiner: The Montana courts, although this case has been lingering now for a couple years, there were a lot of procedural maneuvers that were done in the early years. But since that time though, the trial court was pretty prompt in making its ruling, and I think the Montana Supreme Court has been known to be an efficient court. So at the very least, I might expect that we would see some kind of outcome here by the end of the year.

Jennifer Wagner: Okay, well, we will look forward to that. Is there anything you’d like to add about this case or other things that you are working on right now, as part of the Legal Center?

Leslie Hiner: I would like to note, for those who are interested, under tax-credit scholarship programs, the U. S. Supreme Court has also been very clear in a prior ruling arising out of Arizona, the Winn case, that when an individual gives money for a charitable purpose and gets a tax credit from the state as a result, that is not a legislative appropriation. It can’t be, because the money that is given by an individual actually belongs to the individual and not to the government. The Supreme Court and multiple courts since then have been very clear about this.

And yet, the Department of Revenue in Montana is trying to stand on this idea that, virtually, the state owns all your money, and can decide what it is, and how you use it, and how they’ll treat it. That’s wrong legal precedent. That’s against legal precedent. I don’t know why they’re going down this path, to be real honest with you. For me, it’s just pretty clear, the opinion of Justice Kennedy in the Winn case was fantastic, when he said, “That the money in your bank account is not the same as the state’s bank account.” It’s pretty simple, clear, direct, easy to understand.

So we’re going forward here hoping that the Montana Supreme Court will join state Supreme Courts in other states, many other states, and also the U. S. Supreme Court, in making the proper decision in the case and ruling in favor of these parents so their kids can a decent education.

Jennifer Wagner: Well, it sounds like a clear case of executive overreach, but the good news is, hey, that our founding fathers were wise enough to set up our country so that you’ve got the legislative branch, you’ve got the executive branch, and now we’re going to see what the judicial branch does in this case.

So thank you, as always, Leslie, for joining us for another episode of EdChoice Chats, and we’ll catch you all next time.

Leslie Hiner: Thank you.