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Lawsuit uses tax dollars to sue taxpayers

The Council for Better Education (CBE) is using your tax dollars to sue … you, the Kentucky taxpayers!

The CBE group, comprised of administrators from most of Kentucky’s public school districts, has filed a lawsuit in Franklin Circuit Court claiming the portion of House Bill 563 allowing students in a handful of Kentucky counties to use funds from education opportunity accounts to cover tuition and expenses at private schools “redirects state revenues” in a manner that’s unconstitutional.

Such a claim is mysterious at the outset, considering the funds in question never touch government’s sticky fingers.

These accounts will get their money from voluntary contributions by Kentucky individuals and businesses to nonprofit accounting granting organizations which will then be responsible for distributing funds to qualifying students.

The council’s lawsuit attempts to cloud the scholarship situation by renaming them “vouchers,” which would indicate they are public education funds given directly to private schools.

But the U.S. Supreme Court has already ruled in similar cases involving other states that dissemination of voluntarily contributed funds in this manner is solidly constitutional and doesn’t support the CBE’s allegation that such a policy involves direct payments of tax dollars to private schools.

Neither should Kentucky families be denied because such opportunity is funded by a policy offering incentives to contributors in the form of a credit against their state tax liability.

“State and federal governments do all sorts of things to incentivize good behaviors, and among those good behaviors are spending private money in ways that have a good social benefit,” said Bluegrass Institute Scholar Gary Houchens, Ph.D., a former Kentucky Board of Education member and professor of education administration at Western Kentucky University. “Providing more educational opportunities for students who otherwise don’t have them is positive for the entire community as well as for those families.”

Yet, as Houchens adds, “at the end of the day, it’s a private transaction” and like any good professor should, encourages Kentuckians to “follow the logic” implicit in the council’s allegation that somehow or other, these donations to nonprofit granting organizations are public dollars being redirected away from public schools.

“Based on that argument, every tax credit and every tax deduction is also a diversion of money that otherwise belongs to the state, and if you take that to its logical conclusion, the message there is that every dollar you earn actually belongs to the government unless it deems to give you a little part of it back,” Houchens surmised. “That’s not the message that most Kentuckians and most Americans would agree with.”

Objective analysis of this lawsuit and the developments surrounding it would also cause “most Kentuckians and most Americans” to question its intent.

If this really is a claim about tax credits thieving money away from Kentucky’s public schools, then why is this council suing over the measly $25 million worth of tax credits in the school choice bill while totally ignoring the much-larger current $75 million in tax incentives for film and television production in Kentucky and $100 million worth of tax breaks on construction projects at historic properties?

Even more perspective is gained on this miniscule $25 million tax-credit program considering the Warren County Public Schools – one of two districts filing as a plaintiff, allowing the council’s lawsuit to proceed – alone will receive $36 million worth of COVID relief funds.

“And so, they’re going to be awash in this tax money, and yet they’re spending Warren County taxpayer dollars to try to stop students from having these other educational options that really will have minimal impact on the district and its budget but will greatly help some families who need different educational opportunities for their children,” Houchens said.

Jim Waters is president and CEO of the Bluegrass Institute for Public Policy Solutions, Kentucky’s free-market think tank. Read previous columns at He can be reached at and @bipps on Twitter.

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