Testimony on HB 1447 -- Tax Credits for Parents of Nonpublic School Students

To: Members of the House Finance and Taxation Committee
From: Christopher T. Dodson, Executive Director
Subject: HB 1447 (Tuition and Textbook Tax Credit)
Date: January 29, 1997

The North Dakota Catholic Conference supports HB 1447.

Our position stems from a belief in two fundamental principles. The first is that every parent has a fundamental right to choose the means of education for their children. This right is recognized by the United States Supreme Court and is well accepted in our society.

The second principle is that every child has a right to an education and that the state has an obligation to assist in financially supporting that education. This principle is well established in our nation's history and is a key to our nation's success and the preservation of democracy. This obligation is what is meant by public education.

Our society generally accepts these two principles. Moreover, they are not, and usually are not considered to be, mutually exclusive. However, for various historical reasons our present system treats them as such. In our present system, if parents exercise their right to choose they are denied the right to have society provide the conditions for exercising that right. If society provides the education, the parents forgo their right to choose. The mere fact that some parents choose a government school and their child gets a state-supported education does not negate the fact that the system does not recognize both rights as co-existent.

It is for the co-existence of these two principles that we support HB 1447. We are not here because we want assistance for Catholic schools. HB 1447 does not provide assistance to Catholic or any other nonpublic schools. We are not here because we believe the government school system has failed. The North Dakota Catholic Conference supports the public school system and insists that the state fully support that system.

We are here because every child deserves an education and because the state has a duty to assist in that education, even if the parent happened to have exercised their right to choose a nonpublic school. As a result of the false set of options provided parents, those who send their children to nonpublic schools face a considerable financial burden. HB 1447 will help alleviate that burden.

When society helps relieve the burden placed on families that choose a non-government school, it accomplishes several things. First, society affirms their belief in public education. Public education is society's support, financially and otherwise, of a child's education. We do this because we recognize that a basic education is essential to a person's development and dignity, the support of families, the preservation of communities, and the maintenance of a democracy.

Second, when society alleviates the burden it empowers parents. Permitting parents to choose the means of education for their children and providing the concrete conditions for exercising that choice, places parents in their rightful position as the primary educators of their children. If you want better parents, you treat parenting with respect. Under our present system, however, parents are penalized for if their choice involves a non-government school.

Third, when society relieves some of the burden of choosing a nonpublic school, it helps achieve justice. When the parents of children who are not in government schools pay twice for education - once to the government system and again for the education of their own children, but receive nothing from the state in return, justice is denied. When non-public schools have to meet the same accreditation standards as the government schools, but parents that send their children to nonpublic schools have to pay extra so that the schools can meet those standards, justice is denied. When poor families do not receive the same opportunities to choose the school of their choice available to affluent families, justice is denied. When parents are penalized for choosing a school that best reflects their philosophical convictions, justice is denied. HB 1447 will help address some of these problems.

A few points should be made about HB 1447. First, the North Dakota Catholic Conference supports adding language to the bill to provide a refund for low income families. Similar bills being considered in Minnesota and Iowa contain such provisions.

Second, HB 1447 does not take money away from the public schools. The state can provide relief to parents that send their children to nonpublic schools without affecting funding for government schools.

Third, HB 1447 is constitutional. In 1983, the U.S. Supreme Court, in Mueller v. Allen, 463 U.S. 388, held constitutional a Minnesota statute providing a tax deduction for tuition and textbook expenses for public and nonpublic school parents. Speaking for the court, Justice Rehnquist stated:

Finally, private educational institutions, and parents paying for their children to attend these schools, make special contributions to the areas in which they operate. Parochial schools, quite apart from their sectarian purpose, have provided an educational alternative for millions of young Americans; they often afford wholesome competition with our public schools; and in some States they relieve substantially the tax burden incident to the operation of public schools. Wolman, supra, at 262. If parents of children in private schools choose to take especial advantage of the relief provided by [the statute] it is no doubt due to the fact that they bear a particularly great financial burden in educating their children. More fundamentally, whatever unequal effect may be attributed to the statutory classification can fairly be regarded as a rough return for the benefits, discussed above, provided to the State and all taxpayers by parents sending their children to parochial schools. In the light of all this, we believe it wiser to decline to engage in the type of empirical inquiry into those persons benefitted by state law which petitioners urge. Thus, we hold that the Minnesota tax deduction for educational expenses satisfies the primary effect inquiry of our Establishment Clause cases.

There is no constitutional distinction between a deduction and a tax credit. (See e.g., Luthens v. Bair, 788 F.Supp. 1032 (1992) [upholding Iowa's tax credit on the grounds that it was indistinguishable from a deduction.])

Nor does HB 1447 violate our state constitution. Art. VIII, section 5 of the North Dakota Constitution only states that "[n]o money raised for the support of the public schools of the state shall be appropriated to or used for the support of any sectarian school." Assistance through tax credits, however, is not assistance from money raised for the support of the public schools. Moreover, the assistance provided through tax credits is assistance to parents, not sectarian schools. Indeed, if tax credits were construed as support for sectarian schools, the U.S. Supreme Court would have reached a different conclusion in Mueller v. Allen.

We urge this committee to affirm both the right of parents to choose the means of education for their children and the right of children to receive assistance for their education by giving a Do Pass recommendation to HB 1447.