(Editor's Note: The following article appeared in School Law News, V. 2, Issue 4, December, 1998, published by the State Bar of Montana. Reprinted with permission.)
The 1990's have witnessed numerous political initiatives designed to increase freedom of choice in elementary and secondary education. These initiatives, which include school voucher programs, charter schools, and tuition tax credit proposals, have also generated complex legal issues presently working their way through the courts. This paper briefly describes some of the more significant legal developments to date in these areas, along with an assessment of their potential impact in Montana.
Vouchers, in their simplest form, are generally viewed as a method to introduce competition into educational institutions by allowing parents to choose which schools to send their children at state expense. The specifics of a voucher system can take a variety of forms. A voucher system can specify what schools qualify, limit the students who are eligible, and set standards or procedures with which the qualifying schools must comply. In the 1950's, voucher proponents advocated that a free market system could help reform public education. The proponents, including Milton and Rose Friedman, believed that public schools did not adequately educate children because the public school system was unresponsive to students' needs. They thought that if parents could shop for schools, public schools would have to improve to gain student dollars.
Subject to certain federal constitutional limits noted below, voucher programs can generally include private sectarian and religious schools. It has been suggested that meaningful choice in public education can only occur when both are included. There are separate legal problems with either. Each form of choice triggers its own legal problems.
The U.S. Constitution does not prohibit state funded private non-religious schools. No single tradition in public education is more deeply rooted than local control over the operation of schools; local autonomy has long been thought essential both to the maintenance of community concern and support for public schools and to quality of the educational process." Milliken v. Bradley, 418 U.S. 717 (1974). Education is generally a matter of state law as long as the law does not violate a U.S. Constitutional provision.
The U.S. Constitutional religious school cases have been less clear. In Lemon v. Kurtzman, 403 U.S. 602 (1971), the Supreme Court struck down Rhode Island and Pennsylvania laws that provided salary supplements for teachers in private religious schools. In doing so, the Court created the now famous 3-part Lemon Test to evaluate whether the First Amendment's Establishment Clause has been violated by a state law. First, the law must have a secular legislative purpose. Second, the law's principal effect must neither advance nor inhibit religion. Third, the statute must not foster excessive government entanglement with religion.
In Aguilar v. Felton, 473 U.S. 402 (1985), the Court, using the Lemon test, held that the Establishment Clause barred the New York City Board of Education from sending public school teachers into religious schools to provide remedial education to disadvantaged children.
In Board of Educ. of Kiryas Joel v. Grumet, 512 U.S. 683 (1994), the New York Legislature enacted a statute that created a special school district for the Satmar Hasidim religious sect. The Supreme Court held that the statute violated the federal Establishment Clause because it only included Satmar Hasidim members in the special school district. Thus, it was not neutral as to religion.
The Supreme Court overruled Aguilar in Agostini v. Felton, II 7 S.Ct. 1997 (1997). The Court found that the Establishment Clause did not bar the New York City Board of Education from sending public school teachers into religious schools to provide remedial education for disadvantaged children. The Court made a significant change in federal Establishment Clause law. The Court still used the Lemon Test, but changed the criteria used to assess whether aid to religion has an impermissible effect through excessive government entanglement. The Court determined that any aid must not result in governmental indoctrination; define its recipients by reference to religion; or create an excessive entanglement (version of the Lemon Test).
Using prong one of the Lemon test, the Court concluded that Aguilar had already acknowledged the program's purely secular purpose. Under prong two, the Court held that government inculcation of religious beliefs has the impermissible effect of advancing religion, but there is no longer a "presumption of inculcation." The Court also departed from the rule that all government aid for educational function of religious schools is invalid. The Court noted that grants disbursed directly to students, who then use the money to pay for tuition at a school of their choice, are no different from a state issuing employee paychecks knowing the employees will donate funds from the checks to religious institutions. Such action does not impermissibly advance religion. Under prong three of the Lemon test, the Court overruled its prior Aguilar presumption that public employees would inculcate religion when working in a sectarian environment and found no "excessive entanglements" in this program.
Wisconsin started experimenting with vouchers in private secular schools. These voucher programs were challenged in Davis v. Grover, 480 N.W.2d 460 (Wis. 1992). The Wisconsin Legislature passed a bill that allowed students to attend any nonsectarian private school located in the city if the students met certain requirements, most notably low income status. The Wisconsin Supreme Court upheld the voucher program because it was limited to private nonsectarian schools and therefore did not raise federal nor state establishment clause issues. The Wisconsin Legislature used this experiment as a stepping stone to an expanded voucher system following the case by expanding the program to include religious schools. The program was unsuccessfully challenged in court before implementation in the Jackson v. Benson case discussed below.
1. Religious Schools.
As discussed above, funding private secular schools does not violate the federal establishment clause. State financial participation in religious schools is a different story. In Grumet v. Cuomo, 681 N.E. 2d 340 (N.Y. Ct. App. 1997), New York's highest court invalidated a statute that allowed municipalities meeting very stringent criteria to form their own school districts. The Court found the law so narrowly drawn that only one village, whose boundaries included only members of the Satmar Hasidic sect, could or would qualify under the law. The statute violated the Lemon Test because it did not have a secular purpose; could be perceived as an act of governmental favor for the sole benefit of the Satmar sect; and caused excessive governmental entanglement.
In an attempt to remedy the constitutional flaw of the above statute, the New York Legislature passed another statute to broaden the number of municipalities that could create their own school districts. In Grumet v. Pataki, 675 N.Y.S.2d 662 (1998), a New York intermediate appellate court found the statute unconstitutional because it only applied to two of the state's 1,545 municipalities, the Satmar Hasidic sect and one other; and therefore it was not neutral towards religion.
The Wisconsin Legislature directly attempted to allow students to use vouchers in sectarian and nonsectarian schools by amending the statute at issue in Davis to allow children to attend private sectarian schools. The Wisconsin Legislature also amended the statute so that the money was paid to the parents of the children instead of going directly to the public school. Most likely, the Legislature did this to take advantage of the dicta in Agostini, allowing such payment methods. In Jackson v. Benson, 578 N.W. 2d 602 (Wis.), cert. denied, 67 U.S.L.W. 3322 (1998), the Wisconsin Supreme Court held that the amended statute did not violate either the federal or Wisconsin Establishment Clause. The Court analyzed the facts using the Lemon test as modified by Agostini, and concluded that the law's purpose was secular. The law's primary effect was not to advance religion because it requires neutral criteria that neither favors nor disfavors religion. Furthermore, the public funds flow to the parents and not to any one secular or non-secular school. Finally, although the law may cause some entanglement between Church and State, the entanglement is not excessive because it does not involve the state in any way in the daily affairs of participating private religious schools.
Recently, a Maine federal district court held that Maine's state statutory ban against sectarian schools receiving any public funds for tuition purposes violated no federal constitutional right, although the Court declined to rule on whether a statute permitting sectarian school receipt of public funds for tuition would pass federal constitutional muster. Strout v. Commissioner, 13 F.Supp. 2d 112 (D.Me. 1998). The Court cited Bagley v. Maine Dept. of Education, No. CV97-484 (Me. Super. Ct., Apr. 20, 1998), which reached a similar result under a state constitutional analysis. See Strout, n. 2.
In Simmons-Harris v. Behr, 1997 Oh. App. LEXIS 1766 (1997), the court invalidated Cleveland's Pilot Program that awarded scholarships to parents for use in public or private schools after finding that almost all of the funds were used to benefit parochial school programs despite the Program's facial neutrality, suggesting (but not actually holding) that the Ohio Constitution establishment clause requires more church-state separation than its federal counterpart. The Ohio Supreme Court stayed this intermediate appellate court ruling, has heard oral argument on appeal and is expected to rule soon on its merits.
Although other states may be free to fund private non-religious schools without violating their own respective constitutions to the extent they follow the reasoning in Jackson v. Benson above, Montana and perhaps some other states have constitutional provisions which may preclude such funding.
Montana's Constitution provides that "[t]he legislature, counties, cities, towns, school districts, and public corporations shall not make any direct or indirect appropriation or payment from any public fund or monies, or any grant of lands or other property for any sectarian purpose or to aid any church, school, academy, seminary, college, university, or other literary or scientific institution, controlled in whole or in part by any church, sect or denomination." Mont. Const. Art. X 6.
Illinois has a very similar provision in its Constitution, but the Illinois Supreme Court ruled that the restrictions of the clause are identical to those of the federal First Amendment so the Lemon Test should be used. Klinger v. Howlett, 305 N.E.2d 129 (111. 1973).
The Puerto Rico Supreme Court subsequently rejected Klinger, finding that Article 11, 5 of its Constitution prohibited all vouchers. Associacíon De Maestros De Puerto Rico v. Torres, 1994 WL 780744 (1994). Puerto Rico's Constitution states, "No public property or public funds shall be used for the support of schools or educational institutions other than those of the state." This Article prohibits vouchers for both private non-religious schools and religious schools.
Montana has an additional Constitutional provision that vouchers could be challenged under. The Article states that "No appropriation shall be made for religious, charitable, industrial, educational, or benevolent purpose to any private individual, private association or private corporation not under control of the state." Mont. Const. Art. V I 1(5).
It is difficult to say how broadly this provision will be read by a Montana court, although the 1972 Montana Constitutional Convention transcript (used by Montana courts to construe the Constitution) expressly states: "...we do not feel that a...appropriation...should be made for the definite benefit of a private sector...whether it be individual, an association or a corporation."
This particular Constitutional Article was based on Article V 35 of the old Montana Constitution. Any older case law may therefore help-interpret this provision.
Such older case law suggests that vouchers would be found unconstitutional under Mont. Const. Art V I 1(5). In Hollow v. State, 222 Mont. 478, 723 P.2d 227 (1986), Montana enacted a statute permitting tax revenues to be used to guarantee loans or bonds of private individuals or entities. The Montana Supreme Court found the statute unconstitutional under Art. V 11 (5) of the Montana Constitution.
In another case, Montana enacted a statute to encourage scientific and technological development by allowing the state to pledge credit in order to secure bonds for the benefit of private businesses. White v. State, 233 Mont. 81, 759 P.2d 971 (1988). The Montana Supreme Court held that the statute violated Art. V 11 (5) prohibitions against appropriations to private corporations not under the control of the state.
Other case law suggests that the Montana Supreme Court may not be sympathetic to public support for private schools. In Kaptein v. Conrad School Dist., 281 Mont. 152, 931 P.2d 1311 (1997), the Montana Supreme Court held that Conrad School Dist. did not violate the Montana Constitution by barring a private religious school student from participating in public school sports programs. The Court held that the student's claim was subject to a middle-tier constitutional analysis; the School District's classification of students based on their enrollment in the public school system was reasonable; and the School District's interest in developing the full academic potential of each student outweighed a student's right to participate in public school sports programs.
Concurring in the Kaptein result, Justice Nelson joined by Justices Gray and Leaphart, expressly noted the 1972 "Constitutional Convention's strong and continuing belief in the necessity to maintain Montana's public school systems apart from any entanglements with private sectarian schools and to guard against the diversion of public resources to sectarian school purposes." 281 Mont. at 163-64 (emphasis added, citation to 1972 Constitutional Convention transcripts omitted). Justice Nelson also wrote that the Article X, 6 "prohibition against aid to sectarian schools is even stronger than the federal government's. The former expressly prohibits either direct or indirect aid, while the latter prohibits aid which is found to be direct." Id. at 164 (emphasis added).
Charter schools are legislatively created, state-funded schools recognized and encouraged by federal law (20 U.S.C. 8066). Federal law defines charter schools as schools "[e]xempt from significant rules that inhibit flexible public school operation and management; created by a developer as a public school or adapted by a developer from an existing public school, operated under public supervision and direction; and operated in pursuit of a specific set of educational objectives determined by the school's developer and agreed to by the chartering agency." Federal law defines "developer" as an individual or group of individuals (including a public or private nonprofit organization), which may include teachers, parents, administrators or members of the local community.
Federally authorized public chartered schools are eligible for federal funding. They are fully or partially autonomous entities created by charter between the school's organizers and a sponsor, usually the state's department of education, a school district, or a state university. More so than most traditional public schools in a legal sense, charter schools are held accountable for achieving educational results, and if they do so, they are exempt from many restrictions applying to traditional public schools.
Critics of U.S. public education argue that bureaucracy prevents educational reform. President Bush supported this theory and charter schools first emerged in his administration. Since 1995, the federal government has played an integral role in the development and implementation of charter schools nationwide through the Public Charter Schools program. President Clinton continues to support this movement and his 1997 State of the Union Address called for the creation of 3,000 charter schools by the year 2000. Thirty four states and the District of Columbia currently have charter school statutes. 20 U.S.C. 8061-8066 provide the federal guidance on charter schools, including: findings leading to their support and the purpose of the Public Charter Schools Program; authorization for the program and applications procedures; and administration and funding of the program.
Many state constitutions forbid the funding of private schools or limit government educational funding to public schools. This can mean nonsectarian private schools, parochial schools or both, depending on a state's specific constitutional language and history. Some states clearly include both private nonsectarian and sectarian schools; while others do not so specify. It may be necessary to look to the history behind their constitutions to discover the intent. If it is only parochial school, then a legislature can fund non-parochial charter schools. However, if it is both, then a legislature must design a statute with sufficient public control to make the charter schools created under it public.
One difficult issue confronting states is determining when charter schools are public or private under state law. This determination usually turns on the level of state involvement sufficient to become state control. In some states this may mean immediate, exclusive state control. In others, this may mean designation of an agent of the state with control over the school. In others, receipt of public funds without more may be sufficient to make otherwise private schools public.
Some state constitutions and statutes require leadership and supervision of public education to be held in a state board of education, but in Michigan charter schools are considered public and must comply with "all applicable laws," subjecting them to state board supervision. Application denials may also be litigated in an effort to force state board approval. U.S. equal protection discrimination claims have also been litigated to date.
Parochiaid v. Governor, 566 N.W.2d 208 (Mich. 1997), involved a state constitutional challenge to the funding of charter schools in Michigan. A school set up to connect home schooled students to a central school via a computer system was denied funding because it was thought to be a means to teach religion. A group strongly supporting separation of church and state challenged the charter school legislation on the grounds that it violated the state constitution by setting up a system of private schools that received public funding, contrary to the state constitution. Plaintiffs also claimed that the statute illegally divested the state board of education of its constitutional duty to provide "leadership and supervision" over public education. Two lower courts agreed, but the Michigan Supreme Court reversed and found: (1) public schools did not have to be under the immediate and exclusive control of the state, and even if they did, an agent is acceptable because: (2) the authorizing body may revoke a charter; (3) the state has control through the application-approval process; (4) charter schools meet the qualifications set by the legislature for funding, and do not offend any constitutional protections; and (5) the legislature intended other sections of the state education statutes to apply to the charter schools.
Michigan's Constitution authorized the legislature to prescribe what officers should be chosen to conduct the affairs of the school districts, define their power, duties and term in office, and how and why they should be chosen. Therefore, selecting the school board (authorizing body) is sufficient without electing the board of directors for charter schools. Public schools do not have to be under the control of the voters, just public education in general, i.e. the state board of education. Private schools, as used in the Michigan Constitution, was understood at the time the term was adopted to mean only sectarian schools. This implies that other states should review their own constitutions to ensure compliance through a similar analysis.
Booth v. Board of Education, 950 P.2d 601 (Colo. App. 1997), arose from a charter school application being denied. When the applicant appealed to the state board of education, the state board remanded the application to the local school board and directed the latter to reconsider certain aspects of the application, including site, budget, enrollment and employment. When the local board and the applicant were unable to agree on these details, the application was again denied and appealed to the state board, which ordered the establishment of the charter school and required the local board and the applicant to report the status of the disputed issues. Because these issues were not going to be resolved prior to the school term, the applicant sought a court order to force the local board to grant the application as amended. The lower court ordered the local board to comply with the state board's order, but the appellate court reversed by finding that the state board lacked the authority to enter such an order.
The real issue here is what happens when a charter school developer and the chartering agency disagree on proposed charter school programs and policies.
A Delaware case, Pry v. Spartz, 1997 WL 718673 (Del. Super. 1997), arose from a request for a court prohibition on the consideration of a charter school application. The court denied the prohibition because irreparable harm would not arise out of consideration of the charter school application and it would be a year before the school could become operational even if the application were approved. This gave plenty of time to challenge any alleged legal violations.
Another recent charter school application denial case arose in Shelby School v. Arizona State Bd. of Education, 962 P.2d 230 (Az. App. 1998). The case involved Arizona State Board of Education rejection of a private religious school's application on various grounds. The appellate court remanded the case for further Board proceedings because the Board denial reasons lacked specificity for adequate judicial review purposes. Over applicant objections, however, the Court upheld the validity of Board rules imposing charter school board member creditworthiness requirements; upheld the Board right to investigate charter school board member religious affiliations (based on the state law requiring all charter schools to be nonsectarian), lifestyles and business relationships; and ruled that charter school applicants have no inherent constitutional right to have their applications granted. The Court further held that it lacked the remedial power either to grant the application or to order payment of state funds available to approved charter school, refusing to substitute its judgment for the State Board's.
Cocoa Academy v. School Board, 706 So. 2d 397 (Fla. App. 5 Dist. 1998), considered whether the denied applicant is a legal entity with standing to appear in court. In Florida only individuals, teachers, parents, a group of individuals or a legal entity created under the laws of Florida could apply for charter school status. When an unsigned application made by a program at a local high school was denied it was appealed in court, but the court did not recognize plaintiff as a legal entity because it had never sought or received legal status.
Villanueva v. Carere, 85 F.3d 481 (10th Cir. 1996), arose out of a constitutional challenge to the Colorado Charter Schools Act. In the lower court, there was also a challenge under the Civil Rights Act of 1964. 873 F. Supp. 434 (D. Colo. 1994). A Colorado school district granted an application for a charter school and within a few months closed two public schools. This resulted in the reallocation of their resources to the charter school and other public schools. The school closures had been being discussed for three years because of decreasing enrollment. Parents of children from the two closed schools brought this action claiming that the decision was discriminatory because of the hgh percentage of Hispanic students in the two closed schools; and also that the charter school created a dual standard of education within the community. Both courts found this a nondiscriminatory decision with no illegal discriminatory effect, because violation of the Equal Protection Clause requires a discriminatory intent absent in this case. No violation of the Civil Rights Act of 1964, which requires a discriminatory impact, was found in this case because the students received the same benefits in their new schools; all students had an opportunity to apply to the new charter school, which accepted students on a first-come-first-served basis and allotted slots to demographic regions and grade levels throughout the district it served; and the students from the closed schools plus all special programs from the closed schools were transferred to the charter schools.
In Porta v. Klagholz, 19 F.Supp. 2d 290 (D.N.J. 1998), the New Jersey Court held that public charter schools could lease church facilities for classroom activity because the New Jersey charter school statute provided that all charter schools had to be public, i.e., under state control, so that a church could not qualify to run one. There was no linkage in fact between the church and the charter school enrollment, staffing, curriculum, etc. Citing Agostini plus earlier U.S. Supreme Court cases, the Court found no excessive Lemon entanglement based solely on the landlord-tenant relationship.
In another New Jersey case, Jersey City Education Ass'n v. City of Jersey City, 1998 N.J. Super. LEXIS 435 (1998), an intermediate appellate court held that a municipality could issue municipal bonds to fund construction of a building designed for multiple uses, including a charter school, even though New Jersey law barred the use of public funds solely for charter school construction.
Montana has no charter school statutes. Montana's Constitution expressly prohibits all direct and indirect public fund payments for any sectarian purpose or to aid any sectarian educational organization even partly controlled by a religious denomination. Art. X, 6 (although this provision does not bar federal fund distribution to sectarian schools). Montana's Constitution also bars public fund appropriations for educational purposes "to any private individual, private association, or private corporation not under control of the state" Art V, I 1(5). See, e.g., Montana's Hollow and White cases noted above. Given these constitutional limitations, it is not altogether clear whether Montana can establish any private charter schools at all or provide any state or local school district funds for private religious or non-religious schools except to the extent the latter are subject to statecontrol, at least along Parochiad case lines in Michigan.
Congress has debated for many years whether to enact federal legislation permitting a federal tax credit for anyone paying tuition in private sectarian and non-sectarian elementary and secondary schools. To date, however, no such legislation has been enacted. Several states have nonetheless done so, with differing degrees of legal success. Most recently in Kotterman v. Killian (discussed below) the Arizona Supreme Court upheld the validity of that state's statute permitting annual tax credits for tuition to sectarian and non-sectarian private schools.
In Committee for Public Education Religious Liberty v. Nyquist, 413 U.S. 756 (1953), the Supreme Court invalidated a New York state income tax credit for sectarian school tuition based on the Lemon effects test because the credit could be used almost solely for religious school tuition and lacked either facial or actual neutrality. The Court also expressed concern over the "political [religious] establishment" problem of allowing states to fund parochial school education, even indirectly, on a widespread basis.
In Kotterman v. Killian, 1999 WL 27517 (Ariz. 1999), the Arizona Supreme Court upheld a $500 per year per family tuition tax credit payable to non-profit, tax exempt school tuition organizations created to raise and spend revenues on all private schools which do not discriminate on the basis of race, color, sex, disability, family status, or national origin. The court cited both Jackson v. Benson (discussed above) and Mueller v. Allen (discussed below) in concluding that the tax credit statute violated neither the U.S. nor the Arizona constitution. The court concluded that since religious and non-religious schools alike benefit, the statute posed no legal problem.
In Opinion of the Justices to the Senate, 14 N.E.2d 353 (Mass. 1987), the Massachusetts Court followed Nyquist in advising the Legislature that a state income tax credit would likely violate both the federal establishment clause and the much more separationist Massachusetts establishment clause prohibiting even indirect state support for sectarian education.
In Mueller v. Allen, 463 U.S. 388 (1983), the Court upheld a Minnesota tuition and related school expense state tax credit based on a statute which facially offered the credit for all public and private school education alike (unlike Nyquist, which only benefited private, primarily religious schools).
In Luthens v. Bair, 788 F.Supp. 1032 (S.D. la. 1992), the U.S. District Court followed Mueller in permitting a state tax credit for public and private education tuition plus related expenses, where the credit could only be used for non-religious instructional activities identical to those in public school curricula.
As noted in Kaptein above, at least three current Montana Supreme Court Justices consider even indirect aid of religious schools a violation of Montana's Constitution. The Hollow and White cases noted above also suggest potential Montana judicial hostility towards tax benefits linked to private school entities. These cases thus pose legal hurdles for any Montana voucher system in the future.
The above cases and issues, especially as applied in Montana, suggest that virtually all school choice laws and initiatives involving private schools in general, as well as religious schools in particular, will likely be subject to legal attack primarily on state constitutional grounds. Predicting the outcome of any such challenge to these initiatives in Montana (if and when any are ever adopted), especially given Kaptein concurrence language, remains impossible.
D. Ravitch & J. Viteritti (eds.), New Schools for a New Century (1997).
Pixley, "The Next Frontier in Public School Finance Reform: A Policy and Constitutional Analysis of School Choice Legislation," 24 J. Legis. 21 (1998).
Rozmus, "Education Reform and Education Quality: Is Reconstitution the Answer?", 98 BYU Ed. & L.J. 103 (1998).
Cirelli, "Utilizing School Voucher Programs to Remedy School Financing Problems," 30 Akron L.Rev. 469 (1997).
"Comment, School Voucher Programs: An Idea Whose Time Has Arrived," 26 Cap. U. L.Rev. 645 (1997).
"Comment, The Cleveland Scholarship and Tutoring Program: Why Voucher Programs Do Not Violate the Establishment Clause," 58 Oh. St. L.J. 103 (1997).
Wall, "The Establishment of Charter Schools: A Guide to Legal Issues for Legislatures," 98 BYU Ed. & L.J. 69 (1998).
Green, "Are Charter Schools Constitutional? Council of Organizations and Others for Education about Parochiaid v. Governor," 125 West's Ed. L. Rptr. 1 (1998).
"Note, Charter Schools, Common Schools, and the Washington State Constitution," 72 Wash. L.Rev. 535 (1997).
"Note and Comment, Traversing the Minefields of Education Reform: The Legality of Charter Schools," 39 Conn. L.Rev. 1365 (1997).