• Utah Third District Judge Laura Scott ruled that parents can’t use public funds for religious private schools and that the Utah Fits All scholarship program takes income tax revenue from the public school system.
• The idea that this small program somehow offends the principle of setting aside money for public education seems to hyper-focus on this program alone.

​Last week, Third District Judge Laura Scott ruled on two outstanding issues in the Utah Fits All Scholarship lawsuit. This comes after a ruling last month that the Utah Fits All Scholarship is unconstitutional because it’s a “publicly funded education program outside of the public education system that is neither ‘open to all the children of Utah’ nor ‘free.’”

The state of Utah unsuccessfully argued before this judge that the scholarship program is not part of the public education system and thus is not subject to restrictions that would prevent parents from using it in religious schools or schools that have specific enrollment standards. The state also argued that income tax revenue is authorized to flow to the program because the constitution was amended to allow income tax revenue to be used for services for children and individuals with disabilities.

Judge Scott, however, ruled that public funds can’t be used by parents for religious private schools and that the scholarship program takes income tax revenue from the public school system. She argues that voters didn’t intend for that to happen when they gave the legislature additional flexibility in using income tax revenue to support children and people with disabilities, in addition to funding the public school system.

When it comes to the issue of public funds being spent on such a program, here are some important ideas to consider as the appeals process progresses.

History of public funds to private or religious schools

Utah’s constitution has long prohibited “direct support of any school or educational institution controlled by any religious organization” in Article X, Section 9, a Blaine amendment.

What has that provision meant in practice? The book “Public Funds for Church and Private Schools” by Reverend Richard J. Gabel shows that in the days leading up to and a little bit after statehood in 1896, public funds were occasionally given to private and religious schools.

In Idaho and Utah, until 1890, many public schools were conducted as Mormon parochial schools, publicly supported, and a considerable number of mission or parochial schools were established by other denominations. The Mormons, shortly after their arrival in 1847, set up “common schools” i.e. Mormon schools – and in 1870, all the tax money, $4,151.00, was paid to “private schools.” The University of Deseret was established by the legislature in 1850 and received an annual appropriation of $5,000, but it was listed as a Mormon college in 1872. The Act of Congress, passed March 3, 1887, (the Edmunds-Tucker Law) abolished the office of Territorial Superintendent of schools, and authorized the Superior Court of Utah to appoint a school commissioner for the Territory. The schools were, thereafter, not conducted as parochial schools. Private academies, however, obtained public money in a few cases. In 1890, $500 was reported granted to them, and later the number of schools sharing was from one to two (1894-1900) and one to four (1903- 6). In 1904, the sum of $49,500 was divided among four institutions.

By 2005, the Utah Legislature created the state’s Carson Smith Special Needs Scholarship, a voucher funded by the General Fund intended to offer publicly funded private school tuition assistance for students with special needs.

Several years later, in 2020, the legislature created the Special Needs Opportunity Scholarship program (a tax credit scholarship), which provides more flexible-use scholarships for kids with special needs and offers a tax credit to taxpayers who donate to scholarship-granting organizations. As a tax credit scholarship, it impacts income tax revenue (the Education Fund) intended for public education, higher education, and services for children and individuals with special needs. The bill’s fiscal note said it could impact the Fund with a potential loss of revenue up to $6 million in its first year, and could grow.

In the 2024 legislative session, the legislature passed a bill to combine the two programs over time; it will ultimately function as one tax credit program for students with special needs. We can assume similar impacts on revenue growth will apply. It is unclear how an unfavorable ruling in this case could ultimately impact the state’s tax credit scholarship (and the voucher as it phases out over many years).

What is clear is that Utah policymakers and voters have staked a position on offering publicly funded education choice to families and supporting children and individuals with disabilities.

How tax income revenue has been used

Utah’s constitutional earmark for education and its impact on public education funding have evolved over time. For example, in 1997, higher education was added to the income tax earmark. In 2020, voters approved language that added services for children and people with disabilities to the earmark as well.

A policy brief by the Kem C. Gardner Institute shows the full timeline of the earmark’s evolution. It also shows that the percentage of income tax revenue spent on higher education and services for children and people with disabilities has grown over the years.

The state’s Motion to Dismiss lists examples of the Legislature funding non-education programs that support children and persons with disabilities, with the Children’s Health Insurance Plan and Utah Division of Child and Family Services specifically noted “among many.” Notwithstanding, and at the same time, whether overall funding for public education increases is still up to the Legislature and how much they choose to appropriate.

The idea that this small program somehow offends the principle of setting aside money for public education when this is already happening and can be overcome by the legislature’s policy choices seems to hyper-focus on this program alone.

Conclusion

As the legal battle for the Utah Fits All Scholarship program continues, it’s worth considering where our policy choices about public funding for education have led us and why our state chose them. On the other side, the public and the courts should also consider what future rulings will mean for our public policies in the future.