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Legal scholars say a recent Supreme Court decision upholding Arizona's tax credits for scholarship donations could contain the seeds of defeat for a pending California challenge to the housing allowance enjoyed by pastors.

The 5-4 decision upheld the constitutionality of Arizona giving tax credits to those who donate to scholarships for needy students who attend private schools. In 2008 and 2009, more than 90 percent of scholarships went to students attending religious schools, according to The Arizona Republic. Consequently, some taxpayers argue that the credit is an indirect religious subsidy.

The Court tossed out that claim. It ruled that a tax credit for a private expense differs from a government expenditure. However, at the heart of its decision was the majority's finding that the petitioners did not have legal standing to pursue the case.

Opponents of the credit had relied on the 1968 Flast v. Cohen decision, which granted taxpayers standing to challenge government expenditures that violate the Establishment Clause of the First Amendment. Taxpayers are otherwise restricted from suing the government over expenditures unless they are directly injured; this helps reduce frivolous lawsuits.

The ruling sends a signal that the Freedom From Religion Foundation (FFRF) cannot rely on Flast in its current federal challenge to ministerial housing allowances, said church law expert Richard Hammar.

Notre Dame law professor Rick Garnett agrees. He noted a separate mid-April ruling by the Seventh District Court of Appeals, which dismissed the FFRF complaint that the presidential proclamation of a National Day of Prayer amounted to government establishment of religion. The Seventh Court said that since FFRF was not directly injured, it ...

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In the Magazine

June 2011

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