FRANKFORT, Kentucky (AP) – Kentucky's new law allowing tax credits on scholarships to support private schooling was challenged in court Monday by an educational group arguing that the program is unconstitutional and undermines support for public schools.
The legal showdown has been awaited since the state's Republican-dominated legislature passed measure – House Bill 563 – against Democratic Governor Andy Beshear's veto in March.
The Institute for Justice, a national school election attorney, said Monday night that it was poised to defend a law that many Kentucky families "badly need".
The lawsuit was filed by the Council for Better Education in the Franklin County Circuit Court. The same group sued for injustice in school funding in Kentucky more than 30 years ago. That case led to the passage of the landmark Kentucky Education Reform Act.
The council's new legal action focuses on an important part of the new law creating some form of scholarship tax credit – referred to by proponents as educational opportunity accounts. The lawsuit calls it a "diversion of public revenues to private schools" and demands that it be discontinued.
"To avoid the simple constitutional prohibition on public funding of unaccountable private schools through direct spending, the General Assembly hatched a complicated tax credit scheme to move government revenue through a private grant program," the lawsuit said.
"But the goal and result are the same: In the context of the voucher program, private schools are illegally financed from state funds," it continues.
Under the new law, private donors who back the accounts would be entitled to tax credits. The third-party-managed grants could be used for a range of educational expenditures – including private schooling in several of the state's most populous counties.
Opponents warn that the tax credits will cost the treasury up to $ 25 million a year – money they believe could be used for public education.
Proponents say the measure offers opportunities for parents who want new school opportunities for their children but cannot afford them.
"This lawsuit is nothing more than an attempt to steal much-needed educational opportunities from Kentucky schoolchildren," said Michael Bindas, senior attorney for the Institute for Justice.
The lawsuit demands that a judge prevent state tax officials from implementing the program and repeal these provisions.
Weeks ago, Beshear predicted that lifting his veto would trigger a judicial challenge. Beshear, a former attorney general, cited a constitutional provision saying that "public dollars must be spent on public schools".
Proponents of the measure said it would open up new opportunities for parents who cannot now afford other educational options for their children.
“National courts have repeatedly ruled that states can create alternatives to the public school system. That's all the Education Opportunity Accounts (EOA) program does: create alternatives, ”said Milad Emam, lawyer for the Institute of Justice. "If this misdirected lawsuit against the program is successful, families in Kentucky will lose access to these alternatives."
The Better Education Council said the tax credits would divert money from public schools.
"Every student, no matter what they look or where they live, deserves access to quality public education," the group said in a press release. "Spending money on voucher programs means denying students the opportunities they deserve in their neighborhood." Public schools because vouchers steal scarce resources from public schools and give them to private schools that have no accountability or transparency. "
The Frankfort Independent and Warren County Schools and three individuals join the CBE as plaintiffs in the lawsuit. The Kentucky Treasury and the Kentucky Treasury are named as defendants.