On Monday, June 26, while the legal world was watching for decisions from the U.S. Supreme Court and for a possible retirement announcement, the Supreme Court of Georgia unanimously affirmed the rejection of a challenge to Georgia’s Opportunity Scholarship program.[1] That program allows businesses and individuals who contribute to not-for-profit school scholarship organizations to receive a dollar-for-dollar tax credit of up to $1,000 for individuals, $2,500 for married taxpayers, and the amount contributed or 75% of a corporation’s income tax liability, whichever is less. The organizations then distribute the donated funds to schools, some of which are religious, to pay tuition on behalf of eligible students. The program is very popular as its $56 million annual cap is quickly subscribed.

The program is also popular with the parents and children who are the beneficiaries of the scholarships and the related educational opportunity. Four parents, represented by the Institute of Justice with assistance from Strickland, Brockington Lewis LLP as local counsel, intervened to help the State defend the program.

Plaintiffs challenged the constitutionality of the program, asserting, in part, that it violated the Georgia Constitution’s Establishment Clause. The Clause, in Blaine Amendment style, states, “No money shall be taken from the public treasury, directly or indirectly, in aid of any church, sect, cult, or religious denomination or of any sectarian institution.” They also claimed that the program ran afoul of other provisions in the Georgia Constitution. The trial court dismissed nearly all of the claims, leaving a claim for injunctive relief directed at the operations of the program alive, and appeals followed.

The Georgia Supreme Court joined every other court that has ruled on a challenge to a program of this nature in rejecting it. No court has struck one of these programs down. It held that the plaintiffs lacked standing as taxpayers to challenge the constitutionality of the program. The court concluded that the program uses private funds and that it is private actors, not government officials, who make private decisions on what to contribute for whom and to which entity. No State money is involved; “The Program does not involve the distribution of public funds out of the State Treasury because none of the money involved in the Program ever becomes the property of the State of Georgia.”

The plaintiffs also lacked standing to proceed under a Georgia law that allows a plaintiff to proceed without showing a “legal or special interest” “[w]here the question is one of public right and the object is to procure the enforcement of a public duty ... [and] the plaintiff is interested in having the laws executed and the duty in question enforced.” The plaintiffs didn’t want enforcement; they wanted to block the program.

Finally, the court rejected the claim for injunctive relief, noting that it sought only to make state officials follow and enforce the law.

[1] Justices Nels Peterson and Britt Grant, both of whom previously served as Solicitors General of Georgia before going on the court, were disqualified and replaced by substitutes.