Constitutional Law— First Amendment— Establishment Clause — Nonpublic Elementary and Secondary Schools—Tuition— Tax Credits

March 16, 1978 78-19 MEMORANDUM OPINION FOR THE ATTORNEY GENERAL Constitutional Law—First Amendment— Establishment Clause—Nonpublic Elementary and Secondary Schools— Tuition—Tax Credits You have asked for our opinion concerning the constitutionality, under the Establishment Clause of the First Amendment, of providing either tax credits or grants for tuition payments to nonpublic elementary and secondary schools. You referred to two specific proposals providing such grants or credits: the Packwood-Moynihan bill, S. 2142, which would give limited income tax relief in the form of a credit for tuition payments to nonpublic schools; and the extension of the Basic Educational Opportunity Grant program to include nonpublic elementary and secondary school education. In our opinion, under existing Supreme Court decisions both proposals would violate the First Amendment guarantee against establishment of religion. The controlling decisions on tuition grants and credits for nonpublic elementary and secondary education are Committee fo r Public Education v. Nyquist, 413 U.S. 756 (1973), and Sloan v. Lemon, 413 U.S. 825 (1973), a companion case. In Nyquist, the Court invalidated a New York tuition reimbursement and tax relief plan. The plan provided limited tuition reimbursements to low-income families with children attending nonpublic elementary and secondary schools. Families failing to qualify for tuition reimbursement were allowed tuition tax credits in varying amounts depending upon adjusted gross income. The Court found both facets of the program unconstitutional under the three-part Estab- lishment Clause test enunciated in Lemon v. Kurtzman, 403 U.S. 602, 612 (1971): First, the statute must have a secular legislative purpose; second, its principal or primary effect must be one that neither advances nor inhibits religion . . .; finally, the statute must not foster “ an excessive entanglement with religion.” [Citations omitted.] 77 The Court acknowledged that the purposes of the State in enacting the measures— to preserve a healthy, safe educational environment for all schoolchildren, to promote pluralism and diversity in education, and to prevent further overburdening of the public school system— were secular and not inappropriate legislative goals. It held, however, that the tuition grants and credits failed the second prong of the test because a primary.effect of the plan was to aid religious education. The Court noted additionally that the plan created the prospect of politically divisive church-state entanglement. Adoption of programs assisting sectarian education would generate ongoing controversy along religious lines over continuing or enlarging available relief. In Sloan, the Court held that a Pennsylvania tuition reimbursement program was constitutionally indistinguishable from the New York program invalidated in Nyquist. Since the Pennsylvania program had the effect of advancing religion, it, too, infringed upon the Establishment Clause guarantee. The Packwood-Moynihan bill provides an income tax credit for tuition payments to elementary and secondary schools as well as vocational schools, colleges, and universities.' The amount of the credit is 50 percent of tuition up to a total of $500 per student. If the credit to which the taxpayer is entitled exceeds his tax liability, the difference is refunded to him. We believe that the tax relief provided in the bill for tuition payments to nonpublic elementary and secondary schools falls within the scope of Nyquist. Although we have considered carefully possible arguments distinguishing the Packwood-Moynihan tax credit from the New York tax relief program struck down by the Supreme Court, we do not believe the differences are of constitutional dimension. It might be argued that the facially neutral, broad- based tax relief provided in the bill prevents it from having a “ primary effect” of advancing religion. According to that argument, aid accruing to nonpublic elementary and secondary schools would be only “ incidental” to an otherwise neutral plan, and therefore would be constitutionally permissible under Nyquist. 413 U.S. at 771, 782 n. 38; Walz v. Tax Commission, 397 U.S. 664 (1970). A realistic appraisal of the tax credits proposal, however, indicates that it is not so neutral or broad based as it might appear. In analyzing the effect of the tuition tax credit under the Establishment Clause, it is necessary to separate the elementary and secondary school and higher education components of the bill.2 Recent Supreme Court decisions have consistently distinguished aid to college-level institutions from aid to lower-level schools, pointing out that 'W e understand that the bill as reported out o f the Senate Finance C om m ittee was am ended in a num ber o f w ays but that the basic tax credit provisions rem ain unchanged. 2W e understand that a severability clause was added to the bill as recently reported out o f the Senate com m ittee. 78 religiously affiliated institutions at the college level are less often so “ pervasively sectarian” as schools educating younger students and that older students are generally less impressionable. See, e.g., Roemer v. Board o f Public Works o f Maryland, 426 U.S. 736 (1976); Hunt v. McNair, 413 U.S. 734 (1973); Committee for Public Education v. Nyquist, 413 U.S., at 111, n. 32; Tilton v. Richardson, 403 U.S. 672, 685 (1971). Once the focus is on elementary and secondary school tuition credits alone, it is evident that the effect on sectarian education is not merely incidental. Not only would the credits benefit institutions whose role is to emphasize religious training and beliefs, but they would also benefit sectarian schools in significantly larger numbers than nonsectarian schools. The high percentage of sectarian elementary and secondary schools in New York State— approximately 85 percent of all nonpublic schools— was one factor influencing the Court’s decision in Nyquist. Current statistics on nonpublic schools nationally show that nearly 17 percent of the Nation’s elementary and secondary schools are nonpublic. Of that percentage, 85 percent are religiously affiliated. U.S. Department of Health, Education, and Welfare, National Center for Education Statistics, Nonpublic School Statistics, 1966-77. According to the most recent statistics available, 87.5 percent of nonpublic schools at the elementary level and 70.2 percent of nonpublic schools at the secondary level are sectarian.3 U.S. Department of Health, Education, and Welfare, National Center for Education Statistics, “ Statistics of Nonpublic Elementary and Secondary Schools, 1970-71.” Al- though sectarian secondary schools do not dominate nonpublic education to the same extent as sectarian elementary schools, we believe that their number is sufficiently substantial so that no meaningful distinction between credits for elementary and secondary schools can be drawn. It might be argued that the availability of credits for public elementary and secondary school tuition under the provisions of the bill would significantly affect those statistics. The Court has repeatedly made the point, however, that the actual impact or “ effect” of the program is the controlling determinant, not its hypothetical consequences. The simple fact is that most public schools are supported by State funds, not tuition payments, and there is no evidence of which we are aware that the structure of State funding is likely to change radically as a result of this legislation. Thus, it appears that the tax credits here, S tatistics showing the breakdow n o f schools at the elem entary and secondary school levels for the 1976-77 academ ic year have not yet been com pleted. Prelim inary statistics on student enrollm ent during 1976-77 are available, how ever, w hich, although com piled using a som ew hat different form at than earlier statistics, suggest that the percentages o f nonpublic schools have not changed radically over the last 6 years. 79 like the tax reductions in Nyquist, have a primary effect of benefiting parents of children attending sectarian, nonpublic schools.4 The neutrality argument deserves elaboration because it is the most plausible basis for distinguishing the bill from the statute at issue in Nyquist and Sloan. The argument rests primarily on language in Mr. Justice Powell’s opinion for the Court in Nyquist, in which he distinguished Walz v. Tax Commissioner, 397 U.S. 664 (1970). In Walz, the Court upheld the constitutionality of property tax exemptions for churches. The Nyquist Court distinguished the earlier case on several grounds, one of which was the broad-based and neutral class of property exempted: The exemption challenged in Walz was not restricted to a class composed exclusively or even predominantly of religious institu- tions. Instead, the exemption covered all property devoted to reli- gious, educational, or charitable purposes. As the parties here must concede, tax reductions authorized by this law flow primarily to the parents of children attending sectarian, nonpublic schools. Without intimating whether this factor alone might have controlling signifi- cance in another context in some future case, it should be apparent that in terms of the potential divisiveness of any legislative measure the narrowness of the benefited class would be an important factor. [413 U .S., at 794] At the end of the above discussion the Court added a footnote referring back to a similar point made earlier, which stated: [W]e need not decide whether the significantly religious character of the statute’s beneficiaries might differentiate the present case from a case involving some form of public assistance (e.g., scholarships) made available generally without regard to the sectarian-nonsectarian or public-nonpublic nature of the institution benefited. [413 U.S., at 783 n. 38] An argument could be made, on the basis of those remarks, that the present bill is valid because it would benefit a large, diverse class and would not in its 4W e should em phasize that the C ourt in Nyquist m ade clear that a law could offend the Establishm ent C lause even if aid to religion was not the prim ary effect but was only one o f several consequences o f that law. An additional New York State program considered by the Court in Nyquist provided “ m aintenance and repair g ran ts" to nonpublic schools, lim iting those grants to 50 percent o f the m aintenance and repair costs o f public schools. Even though it was clear that most of the funds w ould be used for nonsectarian purposes, the C ourt held the grants unconstitutional. The flaw in the program was that it provided no m eans o f excluding State funds from benefiting religion. 413 U .S ., at 778-80. Possibly a clearer exam ple m ay be found in the Federal higher education construction grants involved in Tilton v. Richardson, supra. In that case, even though it was clear that the constructed facilities w ould be used predom inantly for secular purposes, the fact that they could be used for sectarian purposes 20 years after their construction was enough to render that portion o f the law unconstitutional in the unanim ous view o f the C ourt. Indeed, the Court struck the provision dow n on the ground that the 20-year lim itation "w ill in part have the effect of advancing relig io n ," 403 U .S ., at 683 [em phasis added], not because that effect was predom inant. N o one could have claim ed there that the law ’s central effects w ere secular. O nly when the sectarian effects m ay be characterized fairly as m erely “ incidental” can a funding program w hich benefits religion be upheld. 80 operation draw distinctions based upon the religious character of institutions. This contention may be maintained, however, if no line is drawn between elementary and secondary school and higher education tuition credits. We think the bill cannot be viewed in this manner for several reasons. First, as we noted above, the Supreme Court has repeatedly drawn a distinction between grants to sectarian colleges and universities and similar grants at the precollege level. Second, the history of education in this country has evolved along lines distinguishing between universal free and mandatory public education at the elementary and secondary level and nonmandatory, and rarely free, educational offerings by the States at the higher education level. Because of these differences, the effect of the bill’s tax credit provisions will be decidedly different for parents of public schoolchildren than for those whose offspring are enrolled in colleges and universities. Third, comments and testimony submitted on the bill leave little doubt that Congress is aware of the differences between tuition tax credits for the families of college students and credits for those families of elementary and secondary schoolchildren who desire a private school alternative.5 See, e.g., letter dated December 21, 1977, to Senators Packwood and Moynihan from Professor Freund of Harvard Law School. Finally, we do not think that broadening the class of beneficiaries to mesh elementary and secondary students with college and university students obscures the fact that one of the “ primary effects” of the bill is to aid sectarian education. The Court has stated clearly that to constitute a “ primary effect” a law need not result exclusively or even predominantly in religious benefits. Rather, a primary effect can exist even where there are any number of other appropriate and praiseworthy consequences of the legislation. Given these considerations, we do not think it reasonable to contend that the provisions of the bill pertaining to tuition for elementary and secondary schools would survive on “ neutrality” grounds.6 An alternative argument in support of the bill is that Federal tax relief is fundamentally different from similar State measures. If the States promote the education of elementary and secondary schoolchildren through the provision of free public schools, the primary effect of any State tax relief for elementary and secondary school tuition is to assist the sectarian schools which make up the bulk of educational institutions charging tuition. It is argued that the Federal Government, on the other hand, does not provide elementary and secondary 5W e note that the report o f the Senate Finance C om m ittee on the bill, as am ended, separately discusses elem entary and secondary school tuition credits and college tuition credits. S. Rept. No. 95-642, 95th C ong., 2d sess. 2-3 (1978). 6Supporters of the bill who seek to distinguish Nyquist m ake one other generalized claim . The assertion is m ade that the C ourt's precedents in the Establishm ent C lause area of First Am endm ent law have been so flexible and unpredictable that little significance m ay be attached to recent holdings. In our view that reading o f the cases is unfair. C ertainly, as the C ourt has freely acknow ledged, the lines are not easy ones to draw . The C ourt has, how ever, developed— and adhered to— the three-part test outlined at length 8 years ago in Lemon v. Kurtzman. supra. That test has com m anded the votes o f every Justice o f the C ourt w ith the exception o f Justices W hite and Rehnquist. M oreover, we know o f no reason to argue that Nyquist and Sloan, the precedents directly pertinent here, are o f doubtful vitality. 81 schooling, and can attempt effectively to promote the education of schoolchildren only through generally applicable tax relief measures. This argument ignores the focus of Nyquist. Although the purpose underlying a tax-benefit plan may be both secular and laudable, the effect of the plan may be impermissibly to advance or inhibit religion. As we have said, it is our opinion that the effect upon nonpublic elementary and secondary schools of the Packwood-Moynihan tax credit would be constitutionally indistinguishable from the effect of the Nyquist tax reduction legislation.7 Our comments with respect to the proposed extension of the Basic Educational Opportunity Grant (BEOG) program8 to include nonpublic elementary and secondary education follow the same vein. Under the present program grants are awarded to students enrolled at institutions of higher learning on the basis of need. The amount of the grant is determined by a number of factors including family size, income, and tuition costs. The proposed extension would make those grants available to pupils in nonpublic elementary and secondary schools as well. Both Nyquist and Sloan hold that tuition grants for nonpublic elementary and secondary education infringe upon the Establishment Clause guarantee if a primary effect of the grant or reimbursement plan is to aid sectarian schools. Given the predominantly sectarian affiliation of nonpublic elementary and secondary schools nationally, any broadening of the BEOG program into elementary and secondary education would appear to have a primary effect nearly identical to the tuition reimbursement plans invalidated in Nyquist and Sloan. Finally, we note that the problem of entanglement in the form of politically divisive activity described by the Court in Nyquist would exist under both tuition relief proposals. Insofar as the programs have a primary effect upon sectarian elementary and secondary schools, controversy is predictable. As the Court stated: [W]e know from long experience with both Federal and State Govern- ments that aid programs of any kind tend to become entrenched, to escalate in cost, and to generate their own aggressive constituen- cies. . . . In this situation, where the underlying issue is the deeply 7W e believe, how ever, that the Packw ood-M oynihan tax credit would be constitutional with respect to college and university tuition. It appears that the benefits o f a higher education tax credit would flow to a broad class o f individuals, and not, as w ith elem entary and secondary school credits, prim arily to individuals affiliated with sectarian institutions. As the Court noted in Nyquist. nothing in its decision com pels the conclusion that a generally available form of education assistance, such as the “ G .I. B ill," 38 U .S .C . § 1651, im perm issibly advances religion. 413 U .S ., at 783, n. 38. O ur view s on the constitutionality o f the college tuition tax credit are buttressed by the C ourt’s recent sum m ary affirm ance o f a case involving an Establishm ent C lause challenge to a Tennessee program providing grants to students in public and private colleges. Americans United for the Separation of Church and State v. Blanton. 434 U .S . 803, (1977), a ff g 433 F. Supp. 97 (M .D . Tenn. 1977). The district court, relying in part on the Nyquist footnote m entioned above, concluded that the broad T ennessee college scholarship program , w ith its em phasis on the student rather than the institution, did not have the effect o f favoring private or sectarian institutions over public institutions and therefore did not com prom ise Establishm ent Clause values. W e believe that the sam e rationale is applicable to Federal tax credits for college and university tuition. “T hat program is set out at 20 U .S .C . § 107a (1975 S upp.), as am ended by 20 U .S .C .A . 1070a (1976). 82 emotional one of Church-State relationship, the potential for seriously divisive political consequences needs no elaboration. [413 U.S. at 797] In conclusion, it is our opinion that both the proposed extension of the BEOG and the provisions of the Packwood-Moynihan bill which would provide relief for tuition payments to nonpublic elementary and secondary schools are unconstitutional under the decisions of the Supreme Court in Nyquist and Sloan. J o h n M . H a r m o n Assistant Attorney General Office o f Legal Counsel 83