Committee for Public Education & Religious Liberty v. Nyquist

Mr. Justice Rehnquist,

with whom The Chief Justice and Mr. Justice White concur, dissenting in part.

Differences of opinion are undoubtedly to be expected when the Court turns to the task of interpreting the meaning of the Religion Clauses of the First Amendment, since our previous cases arising under these Clauses, as the Court notes, “have presented some of the most perplexing questions to come before this Court.” Ante, *806at 760. I dissent from those portions of the Court’s opinion which strike down §§ 2 through 5, N. Y. Laws 1972, c. 414. Section 2 grants limited state aid to low-income parents sending their children to nonpublic schools and §§ 3 through 5 make roughly comparable benefits available to middle-income parents through the use of tax deductions. I find both the Court’s reasoning and result all but impossible to reconcile with Walz v. Tax Comm’n, 397 U. S. 664 (1970), decided only three years ago, and with Board of Education v. Allen, 392 U. S. 236 (1968), and Everson v. Board of Education, 330 U. S. 1 (1947).

I

The opinions in Walz, supra, make it clear that tax deductions and exemptions, even when directed to religious institutions, occupy quite a different constitutional status under the Religion Clauses of the First Amendment than do outright grants to such institutions. Mr. Chief Justice Burger, speaking for the Court in Walz, said:

“The grant of a tax exemption is not sponsorship since the government does not transfer part of its revenue to churches but simply abstains from demanding that the church support the state. No one has ever suggested that tax exemption has converted libraries, art galleries, or hospitals into arms of the state or put employees 'on the public payroll.’ There is no genuine nexus between tax exemption and establishment of religion.” 397 U. S., at 675 (emphasis added).

Mr. Justice Brennan in his concurring opinion amplified the distinction between tax benefits and direct payments in these words:

“Tax exemptions and general subsidies, however, are qualitatively different. Though both provide *807economic assistance, they do so in fundamentally different ways. A subsidy involves the direct transfer of public monies to the subsidized enterprise and uses resources exacted from taxpayers as a whole. An exemption, on the other hand, involves no such transfer. . . . Tax exemptions, accordingly, constitute mere passive state involvement with religion and not the affirmative involvement characteristic of outright governmental subsidy.” Id., at 690-691 (footnotes omitted).

Here the effect of the tax benefit is trebly attenuated as compared with the outright exemption considered in Walz. There the result was a complete forgiveness of taxes, while here the result is merely a reduction in taxes. There the ultimate benefit was available to an actual house of worship, while here even the ultimate benefit redounds only to a religiously sponsored school. There the churches themselves received the direct reduction in the tax bill, while here it is only the parents of the children who are sent to religiously sponsored schools who receive the direct benefit.

The Court seeks to avoid the controlling effect of Walz by comparing its historical background to the relative recency of the challenged deduction plan; by noting that in its historical context, a property tax exemption is religiously neutral, whereas the educational cost deduction here is not; and by finding no substantive difference between a direct reimbursement from the State to parents and the State’s abstention from collecting the full tax bill which the parents would otherwise have had to pay.

While it is true that the Court reached its result in Walz in part by examining the unbroken history of property tax exemptions for religious organizations in this country, there is no suggestion in the opinion that only those particular tax exemption schemes that have roots in pre-Revolutionary days are sustainable against an *808Establishment Clause challenge. As the Court notes in its opinion, historical acceptance alone would not have served to validate the tax exemption upheld in Walz because “ ‘no one acquires a vested or protected right in violation of the Constitution by long use.’ ” Ante, at 792, citing 397 U. S., at 678.

But what the Court gives in the form of dicta with one hand, it takes away in the form of its holding with the other. For if long-established use of a particular tax exemption scheme leads to a holding that the scheme is constitutional, that holding should extend equally to newly devised tax benefit plans which are indistinguishable in principle from those long established.

The Court’s statements that “[s]pecial tax benefits, however, cannot be squared with the principle of neutrality established by the decisions of this Court,” ante, at 793, and that “insofar as such benefits render assistance to parents who send their children to sectarian schools, their purpose and inevitable effect are to aid and advance those religious institutions,” ibid., are impossible to reconcile with Walz. Who can doubt that the tax exemptions which that case upheld were every bit as much of a “special tax benefit” as the New York tax deduction plan here, or that the benefits resulting from the exemption in Walz had every bit as much tendency to “aid and advance . . . religious institutions” as did New York’s plan here?

The Court nonetheless declares that what has been authorized by the legislature is not a true deduction and in substance provides an incentive for parents to send their children to sectarian schools because the amount deductible from adjusted gross income bears no relationship to amounts actually expended for nonpublic education. Support for its notion that the authorization is essentially the same as a tax credit or a reimbursement is drawn from the fact that the net benefit under the *809reimbursement plan established in § 2 of c. 414 is equal to the net tax savings for those at the lower-income end of the tax deduction plan.1 But the deduction here allowed is analytically no different from any other flat-rate exemptions or deductions currently in use in both federal and state tax systems. Surely neither the standard deduction,2 usable by those taxpayers who do not itemize their deductions, nor personal3 or dependency exemptions,4 for example, bear any relationship whatsoever to the actual expenses accrued in earning any of them. Yet none of these could properly be called a reimbursement from the State. And it would take more of a record5 than is present in this case to prove that the *810possibility of a slightly lower aggregate tax bill accorded New York taxpayers who send their dependents to nonpublic schools provides any more incentive to send children to such schools than personal exemptions provide for getting married or having children. That parents might incidentally find it easier to send children to nonpublic schools has not heretofore been held to require invalidation of a state statute. Board of Education v. Allen, supra; Everson v. Board of Education, supra.

The sole difference between the flat-rate exemptions currently in widespread use and the deduction established in §§ 4 and 5 is that the latter provides a regressive benefit. This legislative judgment, however, as to the appropriate spread of the expense of public and nonpublic education is consonant with the State’s concern that those at the lower end of the income brackets are less able to exercise freely their consciences by sending their children to nonpublic schools, and is surely consistent with the “benevolent neutrality” we try to uphold in reconciling the tension between the Free Exercise and Establishment Clauses. Walz, supra, at 669. Regardless of what the Court chooses to call the New York plan, it is still abstention from taxation, and that abstention stands on no different theoretical footing, in terms of running afoul of the Establishment Clause, from any other deduction or exemption currently allowable for religious contributions or activities.6 The invalidation of the New York plan is directly contrary to this Court’s pronouncements in Walz, supra.

II

In striking down both plans, the Court places controlling weight on the fact that the State has not pur*811ported to restrict to secular purposes either the reimbursements or the money which it has not taxed. This factor assertedly serves to distinguish Board of Education v. Allen, supra, and Everson v. Board of Education, supra, and compels the result that inevitably the primary effect of the plans is to provide financial support for sectarian schools.

In Everson, supra, the Court sustained the constitutional validity of a New Jersey statute and resulting school board regulation that provided, in part, for the direct reimbursement to parents of children attending sectarian schools of amounts expended in providing public transportation to and from such schools. Expressly noting that the challenged regulation undoubtedly helped children to get to church schools and that

“[t]here is even a possibility that some of the children might not be sent to the church schools if the parents were compelled to pay their children’s bus fares out of their own pockets when transportation to a public school would have been paid for by the State . . . ,” 330 U. S., at 17,

the majority in an opinion written by Mr. Justice Black held that the state scheme did not violate the Establishment Clause. And it was emphasized that the State in that case contributed no money to the schools, id., at 18; rather it did no more than effectuate a secular purpose— the transportation of children safely and expeditiously to and from accredited schools.

Similarly in Allen, supra, a state program whereby secular textbooks were loaned to all children in accredited schools was approved as consistent with the Establishment Clause, even though the Court recognized that free books made it more likely that some children would choose to attend a sectarian school. 392 U. S., at 244. It was again emphasized that “no funds or books [were] fur*812nished to parochial schools,” and that therefore “the financial benefit [was] to parents and children, not to schools.” Id., at 243-244. This factor was considered crucial in Lemon v. Kurtzman, 403 U. S. 602 (1971), where the Court stated, at 621:

“The Pennsylvania statute, moreover, has the further defect of providing state financial aid directly to the church-related school. This factor distinguishes both Everson and Allen, for in both those cases the Court was careful to point out that state aid was provided to the student and his parents — not to the church-related school. . . .” (Emphasis added.)

Both Everson and Allen gave significant recognition to the “benevolent neutrality” concept, and the Court was guided by the fact that any effect from state aid to parents has a necessarily attenuated impact on religious institutions when compared to direct aid to such institutions.

The reimbursement and tax benefit plans today struck down, no less than the plans in Everson and Allen, are consistent with the principle of neutrality. New York has recognized that parents who are sending their children to nonpublic schools are rendering the State a service by decreasing the costs of public education and by physically relieving an already overburdened public school system. Such parents are nonetheless compelled to support public school services unused by them and to pay for their own children’s education. Rather than offering “an incentive to parents to send their children to sectarian schools,” ante, at 786, as the majority suggests, New York is effectuating the secular purpose of the equalization of the cost of educating New York children that are borne by parents who send their children to nonpublic schools. As in Everson and Allen, the impact, if any, on religious *813education from the aid granted is significantly diminished by the fact that the benefits go to the parents rather than to the institutions.

The increasing difficulties faced by private schools in our country are no reason at all for this Court to readjust the admittedly rough-hewn limits on governmental involvement with religion which are found in the First and Fourteenth Amendments. But, quite understandably, these difficulties can be expected to lead to efforts on the part of those who wish to keep alive pluralism in education to obtain through legislative channels forms of permissible public assistance which were not thought necessary a generation ago. Within the limits permitted by the Constitution, these decisions are quite rightly hammered out on the legislative anvil. If the Constitution does indeed allow for play in the legislative joints, Walz, supra, at 669, the Court must distinguish between a new exercise of power within constitutional limits and an exercise of legislative power which transgresses those limits. I believe the Court has failed to make that distinction here, and I therefore dissent.

N. Y. Laws 1972, c. 414, § 2, provided for flat tuition grants of $50 per year for parents who had children in nonpublic primary schools and $100 per year for parents whose children were attending nonpublie secondary schools. Tuition reimbursements were limited, however, to 50% of amounts actually expended, and only those parents whose adjusted gross incomes were less than $5,000 were eligible.

A table of estimated benefits from the tax modifications contained in §§ 4 and 5 was submitted to the legislators. That table indicated that taxpayers whose adjusted gross income fell between $5,000 and $9,000 received an estimated $50 per dependent attending nonpublic schools. The number of allowable deductions was limited to three.

See, e. g., 26 U. S. C. § 141 et seq. Currently, the maximum standard deduction allowable under the income tax laws is $2,000, regardless of a taxpayer’s income or the number of his dependents. §141 (b). Similarly, there is a minimum low income allowance of $1,000 for those who do not qualify for the percentage standard deduction. § 141 (c). Between these extremes, there is a standard deduction of 15% of adjusted gross income, § 141 (b).

See, e. g., 26 U. S. C. § 151 et seq.

26 U. S. C. §151 (e).

There was no discovery or other development of a factual record in this case. There is, therefore, no indication as to how much tuition payments in nonpublic schools average and whether the relatively minor benefits under the plan could realistically be said to provide any incentive. And yet the Court has struck down this *810plan, arguing that its inevitable result is to encourage parents to send children to religious schools.

See, e. g., 26 U. S. C. §§ 170, 2055, 2522.