Idaho Supreme Court rejects challenge to education tax credit law

The Idaho Supreme Court upheld Idaho’s $50 million tax credit program that directs public money toward private schools and homeschooling expenses.

In an opinion released Thursday, the court denied a challenge from a coalition of education groups and advocates asking justices to prohibit the tax credit program, and dismissed the petition.

The ruling represented a win for Republican lawmakers who championed the tax credit bill last session after trying for years to pass legislation to provide funds for families who choose not to send their children to public schools.

Under the law, eligible families can receive a refundable tax credit of up to $5,000. Parents of students with disabilities can receive up to $7,500. Qualified expenses include tuition for nonpublic schools, tutoring, assessments and transportation.

Shortly after the bill was passed, education groups sued, arguing that the law violated the Idaho Constitution, which requires the Legislature to create and maintain “a general, uniform and thorough” system of free public schools.

Attorneys from both sides presented their arguments before the Idaho Supreme Court justices last month.

During the roughly hourlong arguments, attorneys arguing against the law said the Idaho Constitution specifically requires the state maintain a single system of free and uniform schools, hinging on the word “a” used in the document.

The tax credit program created a separate nonpublic education system by funding private schools, they said. Attorneys also argued that the law violated the “public purpose doctrine” that states funds must be used for a public purpose.

The Idaho Supreme Court said the wording in the constitution “establishes a floor, and not a ceiling,” and said the petitioner’s reading of the section was “unduly restrictive.” The wording doesn’t limit the Legislature from doing “more than what the provision minimally requires,” according to the ruling.

Justices also rejected the argument that the tax credit program has primarily a private purpose by routing public money to private schools and other entities. They said the intent of the law, according to the legislation, was to allow parents the ability “to choose educational services that meet the needs of their individual children.”

Education is a public benefit, and the tax credits could be spent in more places than just private schools, justices said.

“The fact that some educational services are provided by private actors who may limit the scope of admission to their schools does not make the educational services less beneficial to the public as a whole,” the opinion stated.

The opinion noted that attorneys did not argue that Idaho’s system of public schools was deficient, or that the tax credit program would make it so.

Justice Gregory Moeller wrote a separate “special concurrence,” emphasizing that the constitutional foundation for public education in Idaho “remains firmly intact.”

“Importantly, we have not been asked to weigh in on the wisdom of these new policies, nor could we do so even if we were inclined,” he wrote. “Today, we have only determined that nothing in the Idaho Constitution prohibits the legislature – provided it fulfills its constitutional duty to public education – from using tax credits to assist parents who are financing their children’s education outside of that system.”

He added that policymakers and educators will learn more about the impacts of the law moving forward.

Supporters, opponents respond to ruling

After the opinion, Rep. Jason Monks, one of the sponsors of the bill last year, celebrated the ruling.

“I am elated with the Court’s ruling, which correctly affirms the constitutionality of this legislation and supports the intent of the Legislature that Idaho’s parents have the right and ability to choose which educational services best meet the needs of their children,” he said in a message to the Statesman.

The alliance that filed the lawsuit said the organizations will continue to advocate for Idaho’s students and public education “despite this setback,” and suggested the Legislature look “critically” at the program.

“The court had an opportunity to definitively address what many see as a deeply flawed law,” Idaho Education Association spokesperson Mike Journee said in a statement on behalf of the alliance. “The Supreme Court has ruled that the tax credits are not unconstitutional, but that does not mean that they are good policy.”

Idaho Attorney General Raul Labrador called the ruling a victory for families. “Today’s decision confirms that Idaho’s constitutional requirement to maintain a system of public schools does not prevent the Idaho Legislature from doing more to expand educational opportunities,” he said in a statement.

Thousands applied for tax credit

Applications for the program have been open for less than a month. Since Jan. 15, more than 5,000 families have applied for more than 9,000 students, according to a website updated Tuesday by the Idaho Tax Commission.

During the application window, families who earn up to 300% of the federal poverty level have priority. For a family of four, that would be around $96,000, according to the 2025 guidelines.

The program will be capped at $50 million.

Those in support of these programs have said public schools do not fit every child’s needs, and have argued that the tax credit would allow parents to choose the best options.

Those opposed worried it would direct money to schooling options with little oversight or accountability. Advocates against the law have also warned that public schools already face large budget gaps. Idaho consistently ranks last or near last in funding per pupil.