The Supreme Court of South Carolina
Dr. Thomasena Adams, Rhonda Polin, Shaun Thacker,
Orangeburg County School District, Sherry East, and the
South Carolina Education Association, Petitioners,
v.
Governor Henry McMaster, Palmetto Promise Institute,
South Carolina Office of the Treasurer, and South
Carolina Department of Administration, Respondents.
Appellate Case No. 2020-001069
ORDER
After careful consideration of Respondents' petition for rehearing, the Court grants
the petition, dispenses with further briefing, and substitutes the attached opinion
for the opinion previously filed in this matter.
s/ Donald W. Beatty C.J.
s/ John W. Kittredge J.
s/ Kaye G. Hearn J.
s/ John Cannon Few J.
s/ John D. Geathers A.J.
Columbia, South Carolina
December 9, 2020
THE STATE OF SOUTH CAROLINA
In The Supreme Court
Dr. Thomasena Adams, Rhonda Polin, Shaun Thacker,
Orangeburg County School District, Sherry East, and the
South Carolina Education Association, Petitioners,
v.
Governor Henry McMaster, Palmetto Promise Institute,
South Carolina Office of the Treasurer, and South
Carolina Department of Administration, Respondents.
Appellate Case No. 2020-001069
ORIGINAL JURISDICTION
Opinion No. 28000
Heard September 18, 2020 – Filed October 7, 2020
Re-Filed December 9, 2020
DECLARATORY JUDGMENT ISSUED
Skyler Bradley Hutto, of Williams & Williams, of
Orangeburg, and W. Allen Nickles, III, of Nickles Law
Firm, of Columbia, for Petitioners.
Thomas Ashley Limehouse, Jr. and Anita (Mardi) S. Fair,
both of the Office of the South Carolina State Governor;
Robert E. Tyson, J. Michael Montgomery, and Vordman
Carlisle Traywick, III, all of Robinson Gray Stepp &
Laffitte, LLC; and Michael J. Anzelmo, of
McGuireWoods LLP, all of Columbia, for Respondent
Governor Henry D. McMaster.
Matthew Todd Carroll and Kevin A. Hall, both of Womble
Bond Dickinson LLP, of Columbia, and Daniel R. Suhr
and Brian K. Kelsey, both of Liberty Justice Center, of
Chicago, IL, for Respondent Palmetto Promise Institute.
Shelly Bezanson Kelly and Shawn David Eubanks, both
of the South Carolina Treasurer's Office, of Columbia, for
Respondent South Carolina Office of the State Treasurer.
David Keith Avant, General Counsel, and Mason A.
Summers, Deputy General Counsel, both of the South
Carolina Department of Administration, and Eugene
Hamilton Matthews, of Richardson Plowden & Robinson,
PA, all of Columbia, for Respondent South Carolina
Department of Administration.
Timothy J. Newton, of Murphy & Grantland, P.A., of
Columbia, for Amicus Curiae Association of Christian
Schools International.
Gray Thomas Culbreath, of Gallivan, White & Boyd, P.A.,
of Columbia, and Leslie Davis Hiner, of EdChoice, Inc.,
of Indianapolis, IN, for Amicus Curiae EdChoice, Inc.
Joshua W. Dixon, of Gordon Rees Scully Munsukhani, of
Charleston, and Paul Sherman, of Institute for Justice, of
Arlington, VA, for Amicus Curiae Institute for Justice.
Miles Landon Terry and Michelle K. Terry, both of
Greenville, and Jay Alan Sekulow, Benjamin P. Sisney,
and Jordan Sekulow, of Washington DC, all of The
American Center for Law & Justice, for Amicus Curiae
Members of South Carolina's U.S. Congressional
Delegation and the American Center for Law and Justice.
David T. Duff, of Duff Freeman Lyon LLC, of Columbia,
and Francisco M. Negron, Jr., Chief Legal Officer, of
National School Boards Association, of Alexandria, VA,
for Amicus Curiae National School Boards Association.
Reginald Wayne Belcher and Mark Brandon Goddard,
both of Turner Padget Graham & Laney, P.A., of
Columbia, for Amicus Curiae Palmetto State Teachers
Association.
Lindsay Danielle Jacobs, of Public Education Partners
Greenville County, of Greenville, and Robert Edward
Lominack, of Richland County Public Education Partners,
of Columbia, for Amici Curiae Public Education Partners
Greenville County and Richland County Public Education
Partners.
Matthew Anderson Nickles, of Richardson, Patrick,
Westbrook, & Brickman, LLC, of Columbia, for Amici
Curiae Public Funds Public Schools and Southern
Education Foundation.
John Marshall Reagle, Vernie L. Williams, and Connie
Pertrice Jackson, all of Halligan Mahoney Williams Smith
Fawley & Reagle, P.A., of Columbia, for Amici Curiae
South Carolina School Boards Association and South
Carolina Association of School Administrators.
Eliot Bradford Peace, of Tampa, FL, and Lindsey C.
Boney, IV, of Birmingham, AL, both of Bradley Arant
Boult Cummings LLP, for Amici Curiae The Foundation
for Excellence in Education, Inc., and The Alliance for
School Choice.
Peter Michael McCoy, Jr., United States Attorney, of
Charleston, and Tina Cundari, Assistant United States
Attorney, of Columbia, for Amicus Curiae United States
of America.
Karl Smith Bowers, Jr., of Bowers Law Office LLC, of
Columbia, for Amicus Curiae The South Carolina
Independent Colleges and Universities, Bob Jones
University, and Clinton College.
CHIEF JUSTICE BEATTY: We granted the petition for original
jurisdiction in this declaratory judgment action challenging the constitutionality of
Governor Henry McMaster's allocation of $32 million in federal emergency
education funding for the creation of the Safe Access to Flexible Education
("SAFE") Grants Program. Petitioners contend the program, which provides one-
time tuition grants for students to attend private and independent primary and
secondary schools for the 2020-2021 academic year, violates our constitutional
mandate prohibiting public funding of private schools. We hold the Governor's
decision constitutes the use of public funds for the direct benefit of private
educational institutions within the meaning of, and prohibited by, Article XI, Section
4 of the South Carolina Constitution.
I. FACTS
On March 13, 2020, the President declared a national emergency based on a
determination that the coronavirus ("COVID-19") poses an actual or imminent
public health emergency, and Governor McMaster ("the Governor") subsequently
issued a State of Emergency in South Carolina. On March 27, 2020, Congress
passed and the President signed the Coronavirus Aid, Relief, and Economic Security
Act, Pub. L. No. 116-136, 134 Stat. 281 (2020) ("the CARES Act"). In the Act,
Congress appropriated $30.75 billion to the Education Stabilization Fund to prevent,
prepare for, and respond to COVID-19. Specifically, Congress ordered the Secretary
of Education to allocate the money to three sub-funds: (1) the Governor's Emergency
Education Relief ("GEER") Fund; (2) the Elementary and Secondary School
Emergency Relief ("ESSER") Fund; and (3) the Higher Education Emergency Relief
("HEER") Fund. See CARES Act § 18001(b). This matter concerns the award of
GEER funds to the State of South Carolina to be distributed at the direction of the
Governor. Under the Act, Congress provided that GEER funds may be used to:
(1) provide emergency support through grants to local educational
agencies that the State educational agency deems have been most
significantly impacted by coronavirus to support the ability of such
local educational agencies to continue to provide educational services
to their students and to support the on-going functionality of the local
educational agency;
(2) provide emergency support through grants to institutions of higher
education serving students within the State that the Governor
determines have been most significantly impacted by coronavirus to
support the ability of such institutions to continue to provide
educational services and support the on-going functionality of the
institution; and
(3) provide support to any other institution of higher education, local
educational agency, or education related entity within the State that the
Governor deems essential for carrying out emergency educational
services to students for authorized activities described in section
18003(d)(1) of this title or the Higher Education Act, the provision of
child care and early childhood education, social and emotional support,
and the protection of education-related jobs.
Id. § 18002(c). Under this section, the eligible grant recipients include local
educational agencies, institutions of higher learning, and other education related
entities. Id. The grants are awarded to each State based on the relative population
of individuals aged 5 through 24 and the relative number of children counted under
section 1124(c) of the Elementary and Secondary Education Act of 1965. Id.
§ 18002(b). States receiving GEER Fund grants must award the funds to eligible
entities within one year of receiving the allocation. Id. § 18002(d). Any funds not
awarded within the one-year period must be returned to the Department of Education
for reallocation to other states. Id.
On May 8, 2020, the Governor applied for a GEER Fund grant, which the
Department of Education approved and awarded $48,467,924 to South Carolina. On
July 20, 2020, the Governor announced the creation of the Safe Access to Flexible
Education ("SAFE") Grants Program to be funded using $32,000,000 of the GEER
funds awarded under the CARES Act. The program would provide one-time, need-
based grants of up to $6,500 per student to cover the cost of tuition for eligible
students to attend participating private or independent schools in South Carolina for
the 2020-2021 academic year. Families with a household adjusted gross income of
up to 300% of the federal poverty level would be eligible to apply through the
program's online portal. The first 2,500 grants are to be awarded on a first-come,
first-served basis, after which a lottery program will be instituted to allocate the
balance of available grant funds.
Private schools wishing to participate in the SAFE Grants Program must
satisfy certain criteria, including providing a certification that they have been
impacted by COVID-19, and the Governor's advisory panel will select the
independent schools eligible to receive grants. Once a student has selected the
private school he or she would like to attend from a preapproved list, and the
student's enrollment is confirmed, the parent or guardian directs electronic payment
of the SAFE Grant funds to the school through a secure online platform. Approved
schools enroll as a vendor within the online platform to receive SAFE Grant
payments. In the event a student withdraws from the school during the school year,
the school must issue a pro-rated refund to the SAFE Grants Program for any
unexpended or pre-paid tuition.
Prior to the creation of the SAFE Grants Program, the Governor signed Act
135 of 2020 into law, which provided for supplemental appropriations for the State's
fiscal year to combat COVID-19 and for the operation of state government during
the public health crisis. Act No. 135, 2020 S.C. Acts ___. Act 135 required the
Executive Budget Office to "establish the Coronavirus Relief Fund as a federal fund
account separate and distinct from all other accounts" and authorized the Governor
to receive federal money designated for the Fund on behalf of the State. Id. § 2(C)–
(D).
Petitioners challenged the Governor's use of the State's GEER funds for the
SAFE Grants Program, seeking a declaratory judgment and injunctive relief in the
circuit court and naming the State of South Carolina, the Governor, and Palmetto
Promise Institute ("Palmetto Promise") as defendants. The circuit court issued a
temporary restraining order and scheduled a hearing. The Governor and Palmetto
Promise filed motions to dissolve the temporary restraining order, and all three of
the defendants moved to dismiss Petitioners' complaint. At the hearing, the court
dismissed the State, finding a lack of subject matter jurisdiction. Subsequently,
Petitioners advised the court of their intent to amend their initial complaint to refine
the pleadings and include additional plaintiffs and expressed their desire to file a
petition for original jurisdiction in this Court. The circuit court extended the original
temporary restraining order for another ten days, struck the matter from the docket
pursuant to Rule 40(j), SCRCP, and allowed Petitioners to restore the action to the
circuit court docket under the amended complaint if this Court did not grant the
petition. Thereafter, Petitioners filed a petition for original jurisdiction, requesting
declaratory and injunctive relief, which this Court granted.1 We also granted
Petitioners' request to expedite the case and for a preliminary injunction, ordering
Respondents to temporarily cease and desist in distributing any SAFE Grants
Program funds in order to avoid prejudice and the potential for irreparable harm.
Following oral argument, we extended the injunction until the issuance of this
opinion.
II. DISCUSSION
A. Standing
At the outset, the Governor moves to dismiss Petitioners' complaint because
they lack standing to sue. "Standing to sue is a fundamental requirement to
instituting an action." Joytime Distribs. & Amusement Co. v. State, 338 S.C. 634,
639, 528 S.E.2d 647, 649 (1999). Generally, a party must be a real party in interest
to obtain standing, meaning the party has "a real, material, or substantial interest in
the outcome of the litigation." Hill v. S.C. Dep't of Health & Envtl. Control, 389
S.C. 1, 22, 698 S.E.2d 612, 623 (2010) (quoting Sloan v. Friends of the Hunley, Inc.,
369 S.C. 20, 28, 630 S.E.2d 474, 479 (2006)). Standing may be achieved by statute,
constitutional standing, or the public importance exception. Youngblood v. S.C.
Dep't of Soc. Servs., 402 S.C. 311, 317, 741 S.E.2d 515, 518 (2013). The Governor
claims Petitioners have failed to identify a statute that gives them standing. He also
argues Petitioners are unable to prove constitutional standing because they cannot
demonstrate an injury-in-fact that is personal to them, since the GEER funds are to
be used at the Governor's discretion, and public schools are not inherently entitled
to them.
Petitioners claim standing under the public importance exception. "Unlike
with constitutional standing, a party is not required to show he has suffered a
concrete or particularized injury in order to obtain public importance standing." S.C.
1
The Governor and Palmetto Promise filed substantive briefs in this case. The South
Carolina Office of the State Treasurer defers to the Governor's brief on the
substantive issues. The South Carolina Department of Administration states it "has
acted and will act in this matter pursuant only to the authority bestowed upon it by
the legislature of this State and in accordance with any order(s) issued by this Court."
Pub. Interest Found. v. S.C. Dep't of Transp., 421 S.C. 110, 118, 804 S.E.2d 854,
858 (2017). The party also need not show that he has "an interest greater than other
potential plaintiffs." Davis v. Richland Cty. Council, 372 S.C. 497, 500, 642 S.E.2d
740, 742 (2007). Instead, standing under this exception "may be conferred upon a
party when an issue is of such public importance as to require its resolution for future
guidance." ATC S., Inc. v. Charleston Cty., 380 S.C. 191, 198, 669 S.E.2d 337, 341
(2008). "Whether an issue of public importance exists necessitates a cautious
balancing of the competing interests presented . . . ." Id. This Court has explained:
An appropriate balance between the competing policy concerns
underlying the issue of standing must be realized. Citizens must be
afforded access to the judicial process to address alleged injustices. On
the other hand, standing cannot be granted to every individual who has
a grievance against a public official. Otherwise, public officials would
be subject to numerous lawsuits at the expense of both judicial economy
and the freedom from frivolous lawsuits.
Sloan v. Sanford, 357 S.C. 431, 434, 593 S.E.2d 470, 472 (2004). Thus, "courts
must take these competing policy concerns into consideration . . . ." S.C. Pub.
Interest Found., 421 S.C. at 118, 804 S.E.2d at 859. We have also acknowledged
"[t]he key to the public importance analysis is whether a resolution is needed for
future guidance." ATC S., 380 S.C. at 199, 669 S.E.2d at 341; Carnival Corp. v.
Historic Ansonborough Neighborhood Ass'n, 407 S.C. 67, 79–80, 753 S.E.2d 846,
853 (2014) ("Whether [public importance standing] applies in a particular case turns
on whether resolution of the dispute is needed for future guidance . . . . [T]he need
for future guidance generally dictates when [public importance standing] applies . .
. .").
Applying this test to the case at hand, we find Petitioners have established
public importance standing. The COVID-19 pandemic that has plagued our State in
recent months has posed unprecedented challenges in every area of life and severely
disrupted essential governmental operations. Since the President's declaration of a
national emergency, the Governor has issued a State of Emergency and several
Executive Orders implementing "social distancing" practices to slow the spread of
COVID-19. This Court has likewise directed that judicial proceedings be conducted
using remote communication technology to minimize the risk to the public, litigants,
lawyers, and court employees. The virus's impact on education in this State has been
no less great. Indeed, it is for this reason that Congress endeavored to appropriate
emergency funds through the CARES Act to protect our nation's students and
teachers and to supply states with additional resources to continue providing
educational services during this difficult time.
A resolution for future guidance is needed here because this case involves the
conduct of government entities and the expenditure of public funds, a prompt
decision is necessary, and it is likely the situation will occur in the future if and when
Congress approves additional education funding in response to the continued
COVID-19 pandemic. See S.C. Pub. Interest Found., 421 S.C. at 119, 804 S.E.2d
at 859 (finding although a "close call," the balance of the policy concerns weighed
in favor of conferring public importance standing where the matter involved the
conduct of a government entity and the expenditure of public funds and there was
evidence the entity would undertake the conduct at issue again); Breeden v. S.C.
Democratic Exec. Comm., 226 S.C. 204, 208, 84 S.E.2d 723, 725 (1954) (finding
the question of who is the nominee of the Democratic party for public office "is not
only of public interest, but one which should be promptly decided"). Accordingly,
Petitioners have public importance standing to bring this claim.
B. Constitutionality under Article XI, Section 4
Petitioners allege the Governor's use of GEER funds for his SAFE Grants
Program violates Article XI, Section 4 of the South Carolina Constitution because
the program uses public funds for the direct benefit of private schools.2 Specifically,
this constitutional mandate provides, "No money shall be paid from public funds nor
shall the credit of the State or any of its political subdivisions be used for the direct
benefit of any religious or other private educational institution." S.C. Const. art. XI,
§ 4.
Petitioners contend the GEER funds constitute "public funds" within the
meaning of the constitutional provision because section 11-13-45 of the South
Carolina Code requires the money be deposited in the State Treasury. They further
argue the funds are not passively flowing through the State but are being actively
utilized by the State, through the Governor as its Chief Executive, for the purpose of
2
Petitioners also challenge the Governor's decision under Article XI, Section 3,
which requires the government to provide public education to all children in this
State. Because our constitutional determination under Article XI, Section 4 resolves
this case, we need not address this issue. Futch v. McAllister Towing of Georgetown,
Inc., 335 S.C. 598, 613, 518 S.E.2d 591, 598 (1999) (noting an appellate court need
not address remaining issues when disposition of a prior issue is dispositive).
funding his grants program. In contrast, the Governor relies on this Court's decision
in Durham v. McLeod, 259 S.C. 409, 413, 192 S.E.2d 202, 204 (1972) to support his
argument that the GEER funds are not "public funds." In Durham, we considered
the constitutionality of the State Education Assistance Act, which authorized the
State Education Assistance Authority to issue "loans to students to defray their
expenses at any institution of higher learning." Id. at 412, 192 S.E.2d at 203. The
funds received by the Authority were "trust funds to be held and applied solely
toward carrying out the purposes of the Act." Id. The Act also specified the funds
did "not constitute a debt of the State or any political subdivision." Id. Accordingly,
we held the funds used to support the program were not "public funds" but instead a
"student loan fund under the Act" that is "held by the Authority as a trust fund." Id.
at 413, 192 S.E.2d at 204.
We find this case is distinguishable from Durham. Here, the GEER funds
awarded to South Carolina are to be received from the federal government in the
coffers of the State Treasury and distributed through the Treasury, at the behest of
the Governor, as a representative of the State, to be used in accordance with the
education funding provisions of the CARES Act. Significantly, the General
Assembly has mandated that all federal funds be deposited into and withdrawn from
the State Treasury. S.C. Code Ann. § 11-13-45 (2011) ("All federal funds received
must be deposited in the State Treasury . . . and withdrawn from the State Treasury
as needed, in the same manner as that provided for the disbursement of state funds.")
(emphasis added). See id. § 11-13-30 ("To facilitate the management, investment,
and disbursement of public funds, no board, commission, agency or officer within
the state government, except the State Treasurer shall be authorized to . . . deposit
funds from any source . . . .") (emphasis added). Given this clear directive, we must
conclude that when the GEER funds are received in the State Treasury and
distributed through it, the funds are converted into "public funds" within the meaning
of Article XI, Section 4. Sloan v. Hardee, 371 S.C. 495, 499, 640 S.E.2d 457, 459
(2007) ("Words must be given their plain and ordinary meaning without resort to
subtle or forced construction to limit or expand the statute's operation."); Hodges v.
Rainey, 341 S.C. 79, 85, 533 S.E.2d 578, 581 (2000) ("What a legislature says in the
text of a statute is considered the best evidence of the legislative intent or will.
Therefore, the courts are bound to give effect to the expressed intent of the
legislature."); 63C Am. Jur. 2d Public Funds § 1 (2018) (defining public funds "to
include money belonging to, received or held by . . . a state or subdivision thereof").
See Weston v. Carolina Research & Dev. Found., 303 S.C. 398, 402, 401 S.E.2d
161, 164 (1991) (characterizing federal grant money as "public funds" under the
South Carolina Freedom of Information Act); see also Cain v. Horne, 202 P.3d 1178,
1183 (Ariz. 2009) (noting the parties did not dispute the funds at issue constituted
"public funds" within the meaning of the state constitution's no aid provision, where
they "are withdrawn from the public treasury"); Mallory v. Barrera, 544 S.W.2d
556, 561 (Mo. 1976) (holding federal funds deposited in the state treasury were
"public funds" within the meaning of the state constitution's no aid provision);
Gardner v. Bd. of Trs. of N.C. Local Gov't Emps.' Ret. Sys., 38 S.E.2d 314, 316 (N.C.
1946) ("Monies paid into the hands of the state treasurer by virtue of a state law
become public funds for which the treasurer is responsible and may be disbursed
only in accordance with legislative authority."); Cooper v. Berger, 837 S.E.2d 7, 17–
18 (N.C. Ct. App. 2019) (expanding Gardner to hold federal block grant funds
constitute "public funds" in the state treasury). Moreover, the GEER funds given to
the private schools for student tuition must be returned pro rata to the State Treasury
if the student leaves the school before the school term ends.
Petitioners further claim the Governor's allocation of the GEER funds to
create one-time tuition grants for students to attend private schools violates our
Constitution's prohibition on using public funds for the "direct benefit" of a "private
educational institution." Specifically, they argue the money is transferred directly
from the State Treasury to the private school the student chooses to attend.
Petitioners also assert the payment of tuition undoubtedly provides a direct benefit
to the private educational institution receiving the money.
In contrast, the Governor claims the SAFE Grants Program does not directly
benefit the participating independent or private schools. Instead, the funds provide
a direct benefit to the student recipient and his or her family, and the grants only
indirectly benefit the private school. The Governor relies on the history of the
amendment to the former Article XI, Section 9 following this Court's decision in
Hartness v. Patterson, 255 S.C. 503, 179 S.E.2d 907 (1971) to conclude that our
Constitution now permits the use of public funds for the indirect benefit of private
schools. In Hartness, we considered the constitutionality, under the former
provision, of a legislative act providing tuition grants to students attending
independent institutions of higher learning. Id. at 505, 179 S.E.2d at 908. The grants
were not made directly to the school but were made to the student who was then
required to pay it to the school he selected to attend. Id. at 507, 179 S.E.2d at 908.
This Court held the use of public funds to provide these grants to students attending
private religious institutions was prohibited under the former Article XI, Section 9.
Id. at 508, 179 S.E.2d at 909.
The former provision stated:
The property or credit of the State of South Carolina, or of any County,
city, town, township, school district, or other subdivision of the said
State, or any public money, from whatever source derived, shall not, by
gift, donation, loan, contract, appropriation, or otherwise, be used,
directly or indirectly, in aid or maintenance of any college, school,
hospital, orphan house, or other institution, society, or organization, of
whatever kind, which is wholly or in part under the direction or control
of any church or religious or sectarian denomination, society or
organization.
S.C. Const. art. XI, § 9 (1895) (emphasis added), amended by S.C. Const. art. XI,
§ 4 (1972). In 1966, the West Committee engaged in a three-year study of the South
Carolina Constitution and recommended revisions in its 1969 Final Report. In
suggesting the amendment and adoption of the current provision, the Committee
provided the following comments in the Report:
The Committee evaluated this section in conjunction with
interpretations being given by the federal judiciary to the
"establishment of religion" clause in the federal constitution. The
Committee fully recognized the tremendous number of South
Carolinians being educated at private and religious schools in this State
and that the educational costs to the State would sharply increase if
these programs ceased. From the standpoint of the State and the
independence of the private institutions, the Committee feels that public
funds should not be granted outrightly to such institutions. Yet, the
Committee sees that in the future there may be substantial reasons to
aid the students in such institutions as well as in state colleges.
Therefore, the Committee proposes a prohibition on direct grants only
and the deletion of the word "indirectly" currently listed in Section 9.
By removing the word "indirectly" the General Assembly could
establish a program to aid students and perhaps contract with religious
and private institutions for certain types of training and programs . . . .
West Committee, Final Report of the Committee to Make a Study of the South
Carolina Constitution of 1895, 99–101 (1969) (emphasis added). We offer no
opinion on the efficacy of the Committee's report; however, based on this history
and our decision in Hartness, the Governor urges this Court to find the private
schools here only indirectly benefit from the SAFE Grants Program, and it is the
students and their families who are the primary beneficiaries of the funding. Under
the facts of this case, we disagree. See, e.g., Cain, 202 P.3d at 1184 (refusing to
apply a "true beneficiary theory exception" to find the individuals benefit rather than
the institution receiving the public funds because such a holding "would nullify the
Aid Clause's clear prohibition against the use of public funds to aid private or
sectarian education"); see also Cal. Teachers Ass'n v. Riles, 632 P.2d 953, 960, 962
(Cal. 1981) (rejecting the application of the "child benefit theory" and noting it could
be used to justify any type of aid to sectarian schools because "practically every
proper expenditure for school purposes aids the child"); Gaffney v. State Dep't of
Educ., 220 N.W.2d 550, 556 (Neb. 1974) (reviewing similar constitutional provision
and holding application of the theory "would lead to total circumvention of the
principles of our [State] Constitution").
We reject the argument that the SAFE tuition grants do not confer a direct
benefit on the participating private schools because unlike the grants in Hartness,
which were made directly to the student, the SAFE Grants are directly transferred
from the State Treasury to the selected school through use of a secure online portal.
The direct payment of the funds to the private schools is contrary to the framers'
intention not to grant public funds "outrightly" to such institutions. Nevertheless,
the Governor argues the student's act of choosing which school to attend and her
parent or guardian's direction of the electronic payment attenuate the connection of
the funds to the private school so as to transform it into merely an incidental, indirect
benefit. This argument is unavailing. See Cain, 202 P.3d at 1184 ("[T]he voucher
programs do precisely what the Aid Clause prohibits. These programs transfer state
funds directly from the state treasury to private schools. That the checks or warrants
first pass through the hands of parents is immaterial."). In fact, the CARES Act
prohibits direct payment of the funds to individuals and instead permits the grants to
be awarded only to entities. See CARES Act § 18002(c) (allowing the GEER funds
to be used to provide support to local educational agencies, institutions of higher
learning, and education related entities).
In addition, the facts of this case are distinguishable from our decision in
Durham. There, we emphasized the "scrupulously neutral" nature of the student
loan program, which left "all eligible institutions free to compete for [the student's]
attendance," and the aid was not made "to any institution or group of institutions" in
particular. Durham, 259 S.C. at 413, 192 S.E.2d at 203–04. Here, the SAFE Grants
are made available for use only at private educational institutions selected by the
Governor's advisory panel. The program does not provide students with the
independent choice we found to be acceptable in Durham. See Sheldon Jackson
College v. State, 599 P.2d 127, 131 (Alaska 1979) (holding a state tuition grant
program violated the state constitution where the only incentive it created was to
enroll in a private school). Accordingly, we hold the Governor's SAFE Grants
Program uses public funds for the direct benefit of private educational institutions in
violation of Article XI, Section 4 of our Constitution.
Notwithstanding our holding, the Governor claims the CARES Act grants him
absolute discretion in using the GEER funds such that the federal law preempts this
state constitutional provision under the Supremacy Clause. U.S. Const. art. VI, § 2
("This Constitution, and the Laws of the United States . . . shall be the supreme Law
of the Land; and the Judges in every State shall be bound thereby, any Thing in the
Constitution or Laws of any State to the Contrary notwithstanding."); Priester v.
Cromer, 401 S.C. 38, 43, 736 S.E.2d 249, 252 (2012) ("The preemption doctrine is
rooted in the Supremacy Clause of the United States Constitution . . . .").
This Court has recognized that "[f]ederal legislation threatening to trench on
the States' arrangements for conducting their own governments should be treated
with great skepticism, and read in a way that preserves a State's chosen disposition
of its own power, in the absence of the plain statement in the language of the
legislation of Congress' intent to alter the usual constitutional balance of state and
federal powers." Edwards v. State, 383 S.C. 82, 92, 678 S.E.2d 412, 417 (2009)
(quoting Nixon v. Mo. Mun. League, 541 U.S. 125, 140 (2004) (citing Gregory v.
Ashcroft, 501 U.S. 452, 460–61 (1991))). "This plain statement rule is nothing more
than an acknowledgement that the States retain substantial sovereign powers under
our constitutional scheme, powers with which Congress does not readily interfere."
Gregory, 501 U.S. at 461. "Consideration of issues arising under the Supremacy
Clause start[s] with the assumption that the historic police powers of the States [are]
not superseded by . . . Federal Act unless that [is] the clear and manifest purpose of
Congress." Cipollone v. Liggett Grp., Inc., 505 U.S. 504, 516 (1992) (alteration in
original) (quoting Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947)).
Accordingly, "[t]he purpose of Congress is the ultimate touchstone of pre-emption
analysis." Priester, 401 S.C. at 43, 736 S.E.2d at 252 (quoting Cipollone, 505 U.S.
at 516)). "To discern Congress' intent we examine the explicit statutory language
and the structure and purpose of the statute." Id. (quoting Ingersoll-Rand Co. v.
McClendon, 498 U.S. 133, 138 (1990)).
We find there is no clear congressional intent in the education provisions of
the CARES Act to allow the Governor to allocate the GEER funds in his discretion
in contravention of our State Constitution. If that were the case, Congress certainly
understood how to make such intention clear, as evidenced by its inclusion of a
preemption clause in the provisions of the Act regarding support for health care
workers. See CARES Act § 3215(c)(1) ("This section preempts the laws of a State
or political subdivision of a State to the extent that such laws are inconsistent with
this section, unless such laws provide greater protection from liability."). We
therefore reject the Governor's assertion that the discretion provided him in the
CARES Act preempts our constitutional mandate prohibiting the use of public funds
for the direct benefit of private educational institutions.
III. CONCLUSION
Without question, the effects of the COVID-19 pandemic have been
unfathomable. While not an inclusive list, COVID-19 has taken precious lives,
taxed our health care system, impacted our economy, and caused us to alter our court
operations. Our system of education has not been spared as we have witnessed
teachers valiantly work to adapt to different methods of educating South Carolina's
children.
This crisis has created unprecedented challenges for the leaders in our state
government. The Governor has faced issues that have never been presented to any
other administration. We recognize and fully appreciate the difficulty of making
decisions that impact our entire state during this public health emergency.
However, having accepted this matter in our original jurisdiction, we must
fulfill our duty to review the Governor's decision to expend GEER Fund grant
monies on the SAFE Grants Program. Even in the midst of a pandemic, our State
Constitution remains a constant, and the current circumstances cannot dictate our
decision. Rather, no matter the circumstances, the Court has a responsibility to
uphold the Constitution.
Based on the foregoing, we hold the Governor's allocation of $32 million in
GEER funds to support the SAFE Grants Program constitutes the use of public funds
for the direct benefit of private educational institutions within the meaning of, and
prohibited by, Article XI, Section 4 of the South Carolina Constitution. We further
find the issuance of an injunction unnecessary, as we are assured Governor
McMaster, as a duly elected constitutional officer of this State, will adhere to this
Court's decision. As the Governor's lawyer stated during oral argument, the
Governor is a "strong proponent of the rule of law." Equally, we respect the
Executive Branch, and our decision should in no way be construed as diminishing
that respect. The preliminary injunction currently in effect is hereby dissolved.
DECLARATORY JUDGMENT ISSUED.
KITTREDGE, HEARN, FEW, JJ., and Acting Justice John D.
Geathers, concur.