Kentucky Judge Blocks Public Tax Credits For Private Schools

FRANKFORT, Ky. (AP) — A judge ruled Friday that Kentucky’s constitution prohibits a part of a new state law enabling donors to get tax credits for supporting private school tuition.

Franklin Circuit Court Judge Phillip Shepherd said the state cannot implement the “school choice” elements of House Bill 563. The ruling prohibits the creation of any account-granting organizations or education opportunity accounts, nor can the state grant any tax credits for these purposes, according to media reports.

Many students could indeed benefit from the legislation's financial assistance, the judge acknowledged, but he said that points to another constitutional failure.

“The very fact that so many children need additional educational assistance, beyond what is presently funded and appropriated for the public schools, is an indication that we, as a state, may well be falling short of the constitutional mandate of ‘an efficient system of common schools,’" Shepherd wrote.

The law's opponents objected to using the state tax code to aid private education. Attorneys defending the law argued that tax credits don’t amount to government spending, even if they decrease revenues.

Lawyers with the Institute for Justice, which intervened in Kentucky’s suit, said they will appeal.

The legislation was passed over Democratic Gov. Andy Beshear’s veto this year. it created a form of scholarship tax credits — referred to by supporters as “education opportunity accounts.” Under the measure, private donors backing the accounts would be eligible for tax credits.

Shepherd expressed concerns during a hearing last month that the provisions would create a two-tiered system of education that leaves most of the state's children farther behind.

“There’s going to be a small subset of kids in Kentucky who will get the advantage of this, and the rest of the kids in Kentucky are going to be excluded,” Shepherd said.