Arizona’s Corrupt Religious School Funding Shell Game

It’s a shame that mainstream press coverage of this week’s Supreme Court argument in the case of Arizona Christian School Tuition Organization vs. Winn failed to note that, in addition to being constitutionally suspect, Arizona’s school tuition tax credit program is also incredibly corrupt.

There’s a well-established process for spending public resources. First, the government raises money through taxes. Then, elected representatives pass a law directing how that money should be spent. One could fill a warehouse with examples of how this process fails to be optimal. But it is open, rational and fair at the core, which is why democracies the world over and throughout history spend money this way.

So if Arizona citizens want to support religious schools with taxpayer money, they should go to the statehouse during budget season and make their case alongside advocates for regular public schools, roads, hospitals, police protection, mental health, higher education, state parks, light rail, and so forth.

That’s not what happened. Instead, they passed a law allowing people to donate up to $500 ($1,000 for married couples) to a non-profit “School Tuition Organization” which puts some of the money in its pocket and gives the remainder to students in the form of scholarships, who then give the scholarships to religious school. The taxpayer then gets a dollar-for-dollar tax credit from the state of $500. In other words, instead of money going from the government (A) to the religious school (B), the money goes from (A) to (C) to (D) to (E) to (B).

Why the convolution? Because it’s a shell game. And the whole point of the shell game is to deceive. That’s why the phrase evokes shifty-looking men with cardboard boxes on Canal Street and crooked financiers in the Cayman Islands.

Once you start spending public money outside of normal channels, all kinds of disreputable practices ensue. Sure enough, a newspaper investigation uncovered log-rolling arrangements whereby pairs of parents designated scholarships for one another’s children, after which the private schools shredded written records of the arrangement, the legislators who championed the law set themselves as CEO’s of the middleman non-profits and used the administrative rake-off to hire relatives, rent office space from buildings they themselves own after having purchased them with money that was “gifted” by the non-profit, purchased luxury automobiles, and so on. The private schools, meanwhile, just raised tuition accordingly. The point being, in addition to being unconstitutional, it’s a giant scam.

Government bureaucracies are ponderous and annoying in many ways. I, myself, am going to have find time in the next couple of weeks to track down a notary public to witness my signature on an I-9 form related to a federal government committee I’m serving on, even though I’m not being paid. But government bureaucracies are also (Chicago and New Jersey notwithstanding) pretty good about prohibiting things like employing your relatives, purchasing services from yourself, buying a Cadillac with taxpayer dollars, etc. The two things go together.

Meanwhile, at the Supreme Court, acting Solicitor General Neal Katyal made an argument that, in addition to being (in Justice Kagan’s words) “silly and fictional,” was genuinely dangerous. The issue was standing. Katyal argued that regular taxpayers don’t have a right to challenge the constitutionality of the tuition tax credit program because “not a cent, not a fraction of a cent” of their money went to religious schools.

This is nonsense. Katyal’s premise is that people own every dollar they come to possess. They don’t. They owe some of it the government. It’s not their money; it’s the government’s money. That’s what it means to live in a functioning society. You’d never be able to possess the money in the first place without an army to secure the borders, courts to enforce contracts, infrastructure on which to conduct commerce, fire protection and so forth.

The idea that the money people owe in taxes is actually their money and that they should be free to spend as they like without engaging in an orderly democratic process is one part of the larger infantilization of our notion of citizenry that seems to be in particular fashion these days. Taken to its logical extreme, you get anarchy, or California.