Another Brick Shorn From the Church-State Wall

April 4, 2011

By Alex J. Luchenitser, Senior Litigation Counsel for Americans United for Separation of Church and State


This morning, in Arizona Christian School Tuition Organization v. Winn, the U.S. Supreme Court held by a 5-4 vote that taxpayers have no right to challenge tax credits, exemptions, or deductions that support religious organizations. This ruling is the latest in a series of Supreme Court decisions that have progressively made it more difficult for taxpayers to enforce constitutional restrictions on public funding of religion.

The Supreme Court concluded today that even when the government uses its tax system to subsidize religious activity, taxpayers cannot complain in court if the subsidy is not in the form of money taken directly out of taxpayers’ wallets. One need not have a very active imagination to see how easily this ruling will allow government bodies to circumvent the constitutional principle that the government should not provide financial support to religious institutions.

For example, instead of directly appropriating a sum of money to a group of churches for improvements to their sanctuaries, Congress could enact a tax credit for contributions to the same churches. The end result would be the same under either approach. But under today’s ruling, no taxpayer could challenge the latter scheme.

Illustrating the current Supreme Court’s determination to close the courthouse door on taxpayers who wish to defend the separation of church and state, today’s decision effectively overrules at least five prior Supreme Court cases that had assumed that taxpayers do have the right to challenge tax credits and deductions that aid religious groups. Indeed, the Supreme Court even abandoned today a prior decision that had concluded that taxpayers have the right to challenge the provision of tax-exempt bonds to religious organizations.

Another quite troubling aspect of today’s ruling is that it was wholeheartedly supported by the Obama Justice Department. When the case was argued last November, the Justice Department asked the Supreme Court to do exactly what it did this morning.

All is not lost, for today’s ruling contains two silver linings. First, the Supreme Court confirmed that persons other than taxpayers may still be able to challenge at least some tax credits and exemptions that promote religion. If the government, for instance, creates a tax exemption that only benefits religious organizations, non-religious non-profit groups could sue to challenge the law. But it seems that an exemption that can benefit both religious and secular groups cannot be challenged by anyone now, even if religious groups in fact receive the vast majority of the aid.

Second, language in today’s ruling appears to limit the negative impact that a 2007 Supreme Court decision, Hein v. Freedom From Religion Foundation, had on the rights of taxpayers. In Hein, the Court ruled that taxpayers did not have the right to challenge internal executive-branch activity that promoted religion. Some lower courts have interpreted Hein in a manner that makes it very difficult for taxpayers to challenge government grants to religious institutions, by requiring taxpayers to show that a legislature directly appropriated public funds to a particular religious organization, and throwing out lawsuits when executive-branch officials were the ones who decided to fund specific religious groups. Today’s decision appears to reject that approach, suggesting that Hein hinged on the fact that the public funds there were spent on internal governmental activity instead of being paid out to a religious organization.

Those things are of small solace, however. Today’s ruling leaves one wondering what will be left of taxpayers’ rights to sue over public funding of religion the next time that the Supreme Court receives an opportunity to chip away at them.

[Photo courtesy of TheFemGeek]