Senate nears vote on education tax-break bill

Tuesday, March 17, 1998

The U.S. Senate is nearing a vote on a tax-code amendment that opponents say will provide parents with incentives to send their children to private religious schools and will provide the schools themselves with federal financial assistance.

Late last month the Senate Finance Committee approved the Parent and Student Savings Account Act and sent the measure for a full Senate vote. Introduced by Sen. Paul Coverdell, R-Ga., the bill provides tax breaks for families who deposit money into special savings accounts to finance their children's elementary- and secondary-school educational expenses, including tuition at private religious schools.

Coverdell and other supporters of the legislation argue that the tax break will help families–especially those with lower incomes–send their children to private schools that can provide a better education than many of the nation's poorer public schools.

Opponents, however, claim that the tax break would not help needy families and that, in fact, it would amount to government funding of religious schools.

“The bill is basically an effort to bring voucher programs in through the back door,” Rob Boston, assistant director of communications for Americans United for Separation of Church and State, said. “The voucher bills have not fared well in Congress, so supporters have looked for an alternative way to [get past] Congress and the scrutiny of the federal courts.”

Officials at People For the American Way, a Washington, D.C.,-based civil-rights organization, claim that only wealthy families will be able to take advantage of the tax-free savings accounts.

“Families with low incomes can't afford to set aside $2,000 a year in tax-sheltered accounts,” said Carol Shield, president of People for the American Way. “With public education in desperate need of more money, we can't afford to give tax dollars away to private schools.”

Coverdell's proposed amendment, which would allow withdrawals from the tax-free education accounts for private religious schools, is a “couple of steps removed from direct funding,” Boston said.

And, he noted, recent decisions by the Supreme Court suggest it may be hard to claim that tax benefits violate the separation of church and state.

In 1983, the high court ruled in Mueller v. Allen that taxpayers could claim a deduction on expenses incurred in educating their children at sectarian schools. According to the five-justice majority, if the tax break is available to all parents (including those with children in public schools), is one of many deductions, and if the aid is granted to the parents and not directly to the sectarian schools, then the legislation does not confer an appearance of government approval on religious schools.

Coverdell's bill allows for withdrawals from the tax-free accounts for “tuition, fees, tutoring, special-needs services, books, supplies, equipment, transportation, … for enrollment or attendance … at public, private, or sectarian school.”

Jim Henderson, senior counsel for the American Center for Law and Justice, a legal and educational organization that defends religious-liberty rights, said it is inaccurate to portray the proposed tax break as a disguised voucher program.

“The bill is a completely sensible way to encourage those who are primarily responsible for rearing children to save and to apply most effectively funds for their education,” Henderson said.

“This is not a voucher. Parents will get to keep, invest and spend their own money,” he said. “Besides Mueller, there are many other court cases that lead us to the conclusion that a general program of benefits that do not target religious schools as beneficiaries does not become unconstitutional simply because religious schools receive some benefit.”