The US Supreme Court recently listened to oral arguments in the case of Mueller v. Allen, which challenges the constitutionality of a Minnesota law. This law allows parents to claim a state-income-tax deduction for certain expenses related to their dependents attending public or private schools. The law, part of the Minnesota Income Tax Statutes, has been in place since 1955 and permits taxpayers to deduct expenses such as tuition, nonreligious textbooks, transportation costs, and basic supplies. The maximum deduction allowed has changed over time and currently stands at $500 for elementary-school students and $700 for secondary students.
It is important to note that the law only applies to parents with children in nonprofit schools that meet state compulsory-attendance laws and federal civil-rights laws. The Minnesota Department of Revenue estimates that for fiscal 1984, the claimed deductions under this law will cost the state approximately $5.4 million. However, it is unclear how this cost is distributed between parents of public- and private-school students.
A group of Minnesota taxpayers argues that this law violates the Establishment Clause of the US Constitution. In 1981, a federal district court dismissed this claim, and last April, the US Court of Appeals for the Eighth Circuit ruled that the law does not violate the Establishment Clause due to its benefits being available to both public- and private-school parents. In 1978, a three-judge federal district court in Minnesota also upheld this law in a case called Minnesota Civil Liberties Union v. Roemer. The Supreme Court has previously ruled on the constitutionality of similar laws that provide tax benefits to parents of private-school students. The main precedent for the current case is a 1973 case called Committee for Public Education and Religious Liberty v. Nyquist, in which the Court struck down a New York law that granted tax credits to parents of children in private schools. Minnesota argues that its tax deduction law is different from the system overturned in Nyquist because it is available to parents of both public- and private-school students, and it is directly tied to the actual amount they pay for education, unlike the indirect tax credit in New York.
Andrew J. Eisenzimmer, a lawyer representing the state, states that this case is the first to deal with a true tax-deduction statute. However, William I. Kampf, the lawyer arguing against the law, argues that despite its appearance of neutrality, the law primarily benefits parents of private-school students, similar to the situation in Nyquist.
According to a brief filed before the trial, although the statute appears neutral, the benefits received by taxpayers with children in public schools are extremely limited. This is because Minnesota public-school districts are generally prohibited from charging tuition. In 1978-79, out of 815,155 students attending public schools, only 79 were charged tuition. Mr. Kampf argues that the majority of the law’s benefits go to parents with children in private schools, with 90,954 Minnesota children enrolled in tuition-charging nonpublic schools in 1979-80.
The principle of neutrality stands as the foundational demand of the Establishment Clause, as stated in the state’s legal argument.
According to the Establishment policy, there is no requirement for religious organizations to be excluded from the benefits that are accessible to the general public. Therefore, no provision, including the one in question, which encompasses all taxpayer-parents of schoolchildren, has ever been invalidated by this Court. The Reagan Administration, the United States Catholic Conference, and the Mountain States Legal Foundation, along with other parties, have submitted friend-of-the-court briefs in favor of Minnesota. On the other hand, the aclu, the National School Boards Association, Americans United for Separation of Church and State, the Baptist Joint Committee on Public Affairs, and the National Parent Teacher Association are among the organizations that have filed briefs in support of the petitioners.
