RENDERED: DECEMBER 15, 2022

TO BE PUBLISHED

Supreme Court of Kentucky

2021-SC-0518-TG

(2021-CA-1320)

COMMONWEALTH OF KENTUCKY EX 

REL. ATTORNEY GENERAL DANIEL 

CAMERON 

APPELLANT 

V. 

ON APPEAL FROM FRANKLIN CIRCUIT COURT

HON. PHILLIP J. SHEPHERD, JUDGE

NO. 21-CI-00461

HOLLY M. JOHNSON, IN HER 

OFFICIAL CAPACITY AS SECRETARY 

OF THE FINANCE AND 

ADMINISTRATION CABINET; AKIA 

MCNEARY; CHRIS RASHEED, ON 

BEHALF OF HIMSELF AND HIS 

MINOR CHILD; COUNCIL FOR 

BETTER EDUCATION, INC.; 

FRANKFORT INDEPENDENT SCHOOL 

BOARD; KATHERINE WALKERPAYNE, ON BEHALF OF HERSELF 

AND HER MINOR CHILDREN; 

MICHELLE GRIMES JONES, ON 

BEHALF OF HERSELF AND HER 

MINOR CHILDREN; NANCY DEATON; 

THE BOARD OF EDUCATION OF THE 

AUGUSTA INDEPENDENT SCHOOL 

DISTRICT; THE BOARD OF 

EDUCATION OF THE BOWLING 

GREEN INDEPENDENT SCHOOL 

DISTRICT; THE BOARD OF 

EDUCATION OF THE CORBIN 

INDEPENDENT SCHOOL DISTRICT; 

THE BOARD OF EDUCATION OF THE 

PAINTSVILLE INDEPENDENT SCHOOL 

DISTRICT; THE BOARD OF 

EDUCATION OF THE PINEVILLE 

APPELLEES 
INDEPENDENT SCHOOL DISTRICT; 

THE BOARD OF EDUCATION OF THE

RACELAND WORTHINGTON 

INDEPENDENT SCHOOL DISTRICT; 

THOMAS B. MILLER, IN HIS OFFICIAL 

CAPACITY AS COMMISSIONER OF 

THE KENTUCKY DEPARTMENT OF 

REVENUE; AND WARREN COUNTY 

SCHOOL BOARD 

AND

2021-SC-0519-TG

(2021-CA-1323)

COUNCIL FOR BETTER EDUCATION, 

INC.; FRANKFORT INDEPENDENT 

SCHOOL BOARD; AND WARREN 

COUNTY SCHOOL BOARD 

APPELLANTS 

V. 

ON APPEAL FROM FRANKLIN CIRCUIT COURT

HON. PHILLIP J. SHEPHERD, JUDGE

NO. 21-CI-00461

HOLLY M. JOHNSON, IN HER 

OFFICIAL CAPACITY AS SECRETARY 

OF THE FINANCE AND 

ADMINISTRATION CABINET; AKIA 

MCNEARY; CHRIS RASHEED, ON 

BEHALF OF HIMSELF AND HIS 

MINOR CHILD; COMMONWEALTH OF 

KENTUCKY EX REL. ATTORNEY 

GENERAL DANIEL CAMERON; 

KATHERINE WALKER-PAYNE, ON 

BEHALF OF HERSELF AND HER 

MINOR CHILDREN; MICHELLE 

GRIMES JONES, ON BEHALF OF 

HERSELF AND HER MINOR 

CHILDREN; NANCY DEATON; AND 

THOMAS B. MILLER, IN HIS OFFICIAL 

CAPACITY AS COMMISSIONER OF 

APPELLEES 
THE KENTUCKY DEPARTMENT OF 

REVENUE 

AND

2021-SC-0520-TG

(2021-CA-1320)

MICHELLE GRIMES JONES, ON 

BEHALF OF HERSELF AND HER 

MINOR CHILDREN; CHRIS RASHEED, 

ON BEHALF OF HIMSELF AND HIS 

MINOR CHILD; AND KATHERINE 

WALKER-PAYNE, ON BEHALF OF 

HERSELF AND HER MINOR 

CHILDREN 

APPELLANTS 

V. 

ON APPEAL FROM FRANKLIN CIRCUIT COURT

HON. PHILLIP J. SHEPHERD, JUDGE

NO. 21-CI-00461

HOLLY M. JOHNSON, IN HER 

OFFICIAL CAPACITY AS SECRETARY 

OF THE FINANCE AND 

ADMINISTRATION CABINET; AKIA 

MCNEARY; COMMONWEALTH OF 

KENTUCKY EX REL. ATTORNEY 

GENERAL DANIEL CAMERON; 

COUNCIL FOR BETTER EDUCATION, 

INC.; FRANKFORT INDEPENDENT 

SCHOOL BOARD; NANCY DEATON; 

THOMAS B. MILLER, IN HIS OFFICIAL 

CAPACITY AS COMMISSIONER OF 

THE KENTUCKY DEPARTMENT OF 

REVENUE; AND WARREN COUNTY 

SCHOOL BOARD 

APPELLEES 

AND
2021-SC-0522-TG

(2021-CA-1323)

AKIA MCNEARY AND NANCY DEATON APPELLANTS 

V. 

ON APPEAL FROM FRANKLIN CIRCUIT COURT

HON. PHILLIP J. SHEPHERD, JUDGE

NO. 21-CI-00461

COUNCIL FOR BETTER EDUCATION, 

INC.; CHRIS RASHEED, ON BEHALF 

OF HIMSELF AND HIS MINOR CHILD; 

COMMONWEALTH OF KENTUCKY EX 

REL. ATTORNEY GENERAL DANIEL 

CAMERON; FRANKFORT 

INDEPENDENT SCHOOL BOARD; 

HOLLY M. JOHNSON, IN HER 

OFFICIAL CAPACITY AS SECRETARY 

OF THE FINANCE AND 

ADMINISTRATION CABINET; 

KATHERINE WALKER-PAYNE, ON 

BEHALF OF HERSELF AND HER 

MINOR CHILDREN; MICHELLE 

GRIMES JONES, ON BEHALF OF 

HERSELF AND HER MINOR 

CHILDREN; THOMAS B. MILLER, IN 

HIS OFFICIAL CAPACITY AS 

COMMISSIONER OF THE KENTUCKY 

DEPARTMENT OF REVENUE; AND 

WARREN COUNTY SCHOOL BOARD 

APPELLEES 

OPINION OF THE COURT BY JUSTICE HUGHES

AFFIRMING

In 2021 the Kentucky General Assembly passed House Bill (HB) 563,1

creating a structure by which Kentucky taxpayers who donate to account1 Act of Mar. 30, 2021, ch. 167, 2021 Ky. Acts 1041.
2

granting organizations (AGOs) receive a nearly dollar-for-dollar tax credit 

against their income taxes. These AGOs allocate taxpayer contributions to 

education opportunity accounts (EOAs) that are set up for eligible students. 

Funds in the EOAs can be used for various education-related expenses but the 

primary focus has been their availability to defray the costs of nonpublic school 

tuition for eligible students. Pursuant to the statutes, the Kentucky 

Department of Revenue (Department) is charged with developing and 

overseeing the structure by which AGOs are certified, enabling those entities to 

then accept funds and administer the EOAs. The Department has other 

significant responsibilities including preapproving any potential tax credit upon 

taxpayer application, issuing tax credit letters, creating a website, auditing the 

AGOs and, notably, insuring that the annual tax credits attributable to the 

program do not exceed $25 million.

HB 563, codified at Kentucky Revised Statutes (KRS) 141.500-.528 and 

known as the “Education Opportunity Account Act” or “EOA Act,” KRS 

141.528, became effective on June 29, 2021, and shortly thereafter was 

challenged as violative of the Kentucky Constitution. The Franklin Circuit 

Court considered the EOA Act’s constitutionality under several provisions of 

our Constitution and ultimately found it unconstitutional under both Section 

59, the special legislation provision, and Section 184, an education provision 

prohibiting the raising or collecting of any sum for education “other than in 

common [public] schools” unless the taxation question is submitted to and 

approved by the voters. 
3

Before this Court, the proponents of HB 563 urge our consideration of 

the importance of parental choice and recognition of the unique education 

needs of each child while the opponents emphasize the importance of a sound, 

well-funded common school system open to all children regardless of their 

circumstances. While these policy arguments are understandable, this Court 

has no role in assessing the merits of competing policy positions but must 

instead exercise the “judicial power of the Commonwealth” committed to it 

under Section 109 of the Kentucky Constitution. In short, our responsibility is 

to review the EOA Act to determine whether the statute complies with or 

contravenes our Constitution, the foundational document for all laws in 

Kentucky. 

After a thorough review, we conclude the EOA Act violates Section 184 

and, consequently, affirm the circuit court’s holding that the statute is 

unconstitutional. With this conclusion, the remaining constitutional 

challenges to the EOA Act are rendered moot.

FACTS AND PROCEDURAL HISTORY

On March 16, 2021, the General Assembly passed HB 563 by a narrow 

margin, with a 48-47 vote in the House. The Governor promptly vetoed the 

legislation, prompting the General Assembly to override the Governor’s veto on 

March 30, 2021. Now codified as KRS 141.500-.528, this legislation 

establishes the Education Opportunity Account Program. This program 

provides nearly dollar-for-dollar tax credits to Kentucky taxpayers for their 

contributions to educational nonprofit organizations known as AGOs. These 
4

AGOs in turn award funds to low-income families for education expenses 

through EOAs. The program’s stated purpose is to “give more flexibility and 

choices in education to Kentucky residents and to address disparities in 

educational options available to students.” KRS 141.500. 

To be eligible to obtain an EOA, students generally must be members of a 

family whose household earns less than 175% of the amount of household 

income necessary to establish eligibility for reduced price meals—

approximately $85,800 for a family of four during the 2021-22 school year. 

Students can use EOA funds on a variety of services, including online learning 

programs, tutoring, extracurricular activities, computer hardware and 

software, standardized testing, special education therapy programs, and 

transportation. Students attending public and nonpublic institutions are 

eligible for an EOA. Notably, for students in counties with populations over 

90,000 based on the 2010 United States Census, EOA funds can also be used 

for nonpublic school tuition. This limits nonpublic school tuition assistance to 

only eight counties: Boone, Campbell, Daviess, Fayette, Hardin, Jefferson, 

Kenton, and Warren. 

The Council for Better Education, Inc. (Council), a non-profit 

organization of school districts and school officials dedicated to ensuring 

implementation of Kentucky’s constitutional commitment to students and 

schools, and the Warren County and Frankfort Independent School Boards, as 

well as several parents of children (collectively Plaintiffs), challenged the 

constitutionality of the EOA Act, claiming it impermissibly redirects state 
5

revenues to nonpublic schools. Plaintiffs named the Secretary of the Kentucky 

Finance and Administration Cabinet and the Commissioner of the Kentucky 

Department of Revenue as Defendants based on their statutorily-prescribed 

roles in implementing the program. The Attorney General intervened in the 

action on behalf of the Commonwealth. Two parents who hope to receive EOA 

program benefits, Akia McNeary and Nancy Deaton, were also permitted to 

intervene as defendants (referred to collectively with the Attorney General as 

Intervening Defendants). 

Sections 1-4 of HB 563,2 codified at KRS 157.350, 158.120, and 

156.070, modify existing statutes to allow public school students to transfer, 

without penalty, from their district of residence to another public school 

district where they do not reside. These sections of the legislation have not 

been challenged and are not at issue here. Sections 5-19 of HB 563 outline 

how the EOA program works, eligibility, the application process for parents and 

AGOs, and the extensive requirements imposed on the Department to maintain 

and implement the EOA program.

3

Plaintiffs filed a motion for summary judgment and argued that KRS 

141.500-.528 violate Sections 3, 59, 171, 183, 184 and 186 of the Kentucky 

2 In its Order on Summary Judgment, the circuit court referred to these 

legislative provisions as Sections of HB 563. Since those sections are now codified in 

KRS 141.500, et seq., for clarity we refer to the provisions using the KRS citations. 

3 The last two sections of HB 563 are not at issue here. Section 20 modifies 

KRS 141.0205 to add the EOA tax credit to the order for credit application if a 

taxpayer is entitled to more than one tax credit. Section 21 amends KRS 131.190, 

pertaining to the responsibility of state employees to maintain confidentiality, to allow 

the transmission of EOA program information to the Legislative Research Commission.
6

Constitution. Plaintiffs also requested injunctive relief. Intervening 

Defendants filed cross-motions for summary judgment and the circuit court 

heard oral arguments. On October 8, 2021, the circuit court granted Plaintiffs’ 

motion for summary judgment on their claims involving Sections 59 and 184 of 

the Kentucky Constitution but determined that issues of material fact 

precluded ruling on Plaintiffs’ claims under the remaining constitutional 

sections. The circuit court highlighted that the taxpayers who “donate” to 

AGOs are not donating their own money to AGOs—they are taking the money 

they owe the state in income taxes and redirecting it to the AGOs, in lieu of 

paying their tax liability. 

The circuit court concluded that the geographic limitations in KRS 

141.504(2)(b) violate Section 59, the special legislation prohibition of the 

Kentucky Constitution. Specifically, the court held the singling out of a few 

counties with populations over 90,000 at the time of the 2010 United States 

Census for the lucrative benefit of tuition assistance for nonpublic schools, to 

the exclusion of all other counties, falls squarely within the Section 59 ban on 

special legislation. The court found the classification drawn by KRS 

141.504(2)(b) virtually identical to the geographic classification struck down in 

University of the Cumberlands v. Pennybacker, 308 S.W.3d 668 (Ky. 2010), 

which limited pharmacy school tuition assistance to students who attended 

pharmacy schools in an Appalachian Regional Commission county. 

Additionally, the circuit court noted the Legislature cannot provide funding 

that discriminates against nonpublic school students and families based on 
7

their place of residence. Rose v. Council for Better Educ., 790 S.W.2d 186 (Ky. 

1989). Despite Intervening Defendants’ request to employ the severability 

statute, KRS 446.090, and make the tuition assistance provisions available 

statewide, the circuit court declined, having determined that these provisions 

are integral to the overall scheme of the statute, and severance is not possible.4 

The circuit court also held that the EOA Act violates Section 184 of the 

Kentucky Constitution which provides that “no sum shall be raised or collected 

for education other than in common schools until the question of taxation is 

submitted to the legal voters.” Applying the plain language of this section, the 

income tax credit raises money for nonpublic education and its 

characterization as a tax credit rather than an appropriation is immaterial. 

The circuit court cited Commonwealth v. O’Harrah, 262 S.W.2d 385, 389 (Ky. 

1953), for the long-standing principle that “[i]n appraising the validity of the 

statute we must look through the form of the statute to the substance of what 

it does.” Every dollar raised under the EOA program to fund the AGOs is 

raised by tax credits which diminish the tax revenue received to defray the 

necessary expenses of government. 

In its October 8, 2021 order, the Franklin Circuit Court also granted the 

injunctive relief requested by Plaintiffs. The court order states that the 

4 The circuit court referenced the “razor thin” vote on final passage in the House 

of Representatives, 48-47. The circuit court could not presume that HB 563 would 

have passed without the unconstitutional limitation allowing nonpublic school tuition 

assistance in only eight counties, nor could it presume the bill would have passed if 

the benefit was extended beyond the eight counties. “[A]ny material change in the bill 

would have jeopardized its passage.” 
8

Department is permanently enjoined from enforcing the provisions of the EOA 

Act as codified at KRS 141.500-.528. Accordingly, the Department is 

prohibited from approving the creation or operation of any AGOs, the 

establishment of any EOAs, and the granting of any tax credits to fund such 

organizations and accounts under the legislation. 

Finally, the circuit court concluded that the factual record necessary to 

consideration of the constitutional issues raised by Sections 3 and 171 of the 

Kentucky Constitution was not yet developed. Sections 3 and 171 prohibit 

payment of public money “to any man or set of men, except in consideration of 

public services,” and require principles of public purpose, uniformity, and 

equality in levying taxes. Likewise, the court deemed the record is 

underdeveloped on the issues pertaining to Sections 183 and 186 of the 

Kentucky Constitution, which require the Kentucky General Assembly to 

provide for “an efficient system of common schools” that is adequately and 

equitably funded, and that “[a]ll funds accruing to the school fund shall be 

used for the maintenance of the public schools of the Commonwealth, and for 

no other purpose.” Because the record contains no discovery, depositions, or 

expert testimony to establish whether the EOA Act is consistent with these 

constitutional requirements, the court denied summary judgment on these 

issues. 

Within days, Intervening Defendants filed a motion to amend the circuit

court’s summary judgment order, and various school districts sought to 

intervene in the action to seek clarification on whether the circuit court’s ruling 
9

struck down Sections 1-4 of HB 563. In a November 2, 2021 order, the circuit

court explicitly stated that Sections 1-4 of the legislation are not at issue, so 

the motions to intervene were moot.5 The circuit court also reaffirmed its 

holding that the EOA Act violates Sections 59 and 184 of the Kentucky 

Constitution. Finally, as to the remaining claims regarding other constitutional 

violations, the court reiterated that it was holding these claims in abeyance 

pending finality of the anticipated appeal. 

Intervening Defendants filed a notice of appeal in the Court of Appeals on 

November 9, 2021. On November 16, 2021, Plaintiffs and the Attorney General 

filed separate motions to transfer the appeal to this Court, citing the important 

constitutional questions presented and the “great and immediate public 

importance” of this matter. Kentucky Rule of Civil Procedure (CR) 74.02(2). 

This Court granted transfer on February 23, 2022, consolidated the actions on 

April 20, 2022, and following extensive briefing heard oral arguments on 

October 12, 2022.6

5 Sections 1-3 of HB 563 relate to educational choice and provide amendments 

that require school districts to adopt nonresident student policies under which a 

school district shall allow the enrollment of nonresident students and the funding 

associated therewith. Section 4 provides that the Kentucky Department of Education 

shall report to the Legislative Research Commission and the Interim Joint Committee 

on Education with options for ensuring the equitable transfer of education funds so 

that funds follow a nonresident student to their school district of 

enrollment. Subsequent sections of HB 563, Sections 5-19, are the EOA Act. See also

n.3 regarding Sections 20-21. 

6 On August 3, 2022, the Department and the Finance and Administration 

Cabinet filed a statement, in lieu of submitting a brief, indicating their interest in a 

ruling from this Court because the implementation and administration of the EOA Act 

tax credits fall within the administrative functions of the Department. They took no 

position on the issues presented noting that “sufficient arguments will be made by the 

other parties.”
10

ANALYSIS

I. KRS 141.500 et seq. (HB 563) – The Structure and Operation of 

the EOA Tax Credit Program

As noted, the EOA Act authorizes AGOs, which essentially serve as 

intermediary organizations to facilitate funding various educational expenses of 

eligible students. An organization seeking to become an AGO must be certified 

by the Department and renew its certification annually. KRS 141.510. To 

apply for certification, an AGO must submit proof of its incorporated non-profit 

status and a description of how the AGO plans to function, including its 

application process, establishment and management of EOAs, and process for 

approving educational service providers. Id. To renew its certification, an AGO 

must submit its IRS forms and an annual report that details various aspects of 

the AGO’s operations, including lists of students receiving EOA funds, 

accounting details pertaining to funds received and distributed, and 

educational service providers. KRS 141.510(3). The Department must issue 

initial certifications within sixty days of receiving the application and renew 

certifications within thirty days of receiving a renewal application. KRS 

141.510(4).

KRS 141.506 requires a taxpayer-parent to apply to an AGO to establish 

an EOA for an eligible student. Each AGO is tasked with creating a uniform 

process for determining the amount of funds allocated to each eligible student’s 

EOA with prescribed limitations pertaining to the amount of funds permissible 

in each EOA, and the expenses covered by an EOA. KRS 141.504. Qualifying 

expenses include public school tuition, tutoring services, textbooks and 
11

instructional materials, technological devices, uniforms, testing fees for 

standardized assessments, summer and after-school education programs, 

therapies provided by a licensed professional, and tuition for dual credit 

courses. KRS 141.504(2)(a). In addition to the variety of education-related 

expenses covered by EOAs, students who reside in eight counties with a 

population of 90,000 or more, as determined by the 2010 United States 

Census, can use funds received through the EOA program for tuition and fees 

to attend nonpublic schools. KRS 141.504(2)(b). 

By tying this classification to the 2010 Census, the General Assembly 

limited the students eligible for nonpublic school tuition payments to residents 

in Boone, Campbell, Daviess, Fayette, Hardin, Jefferson, Kenton, and Warren 

Counties. The stated justification for this provision is that “students in these 

counties have access to substantial existing nonpublic school infrastructure 

and there is capacity in these counties to either grow existing tuition assistance 

programs or form new nonprofits from existing networks that can provide 

tuition assistance to students over the course of the pilot program.” KRS 

141.504(2)(b). Funds allocated to an EOA do not constitute taxable income to 

the parent or the EOA student. KRS 141.504(5). 

The EOA Act imposes numerous requirements on the Department. To 

administer the tax credits to eligible taxpayers, the Department is required to 

create the tax credit application form, the forms used to notify the taxpayer and 

an AGO of preapproval or denial of the tax credit, and the educational 

materials distributed by AGOs. KRS 141.514(1)(a). The Department must also 
12

create a website listing the amount of total credit pending verification, credit 

allocated to date, and the remaining credit available to taxpayers making 

contributions to AGOs. KRS 141.514(1)(b). In addition, the Department must 

notify the taxpayer and the AGO of the amount of credit allocated to the 

taxpayer upon certification that the contribution has been made. KRS 

141.514(1)(c). By January 1 of each year, the Department must publish on its 

website a list of organizations approved to perform independent financial 

analyses of parents’ demonstrated financial needs (which is required to 

determine eligibility pursuant to KRS 141.504(1)(a)1), a list of AGOs, and an 

overall annual report that aggregates the information obtained from annual 

reports submitted by AGOs. 

The Department may audit an AGO and, in the event the Department 

determines that the AGO violated any section of the EOA Act, must notify the 

AGO of its noncompliance. KRS 141.516(1)-(2). If the AGO fails to remedy its 

violation, the Department can revoke the AGO’s certification to participate in 

the EOA program. KRS 141.516(2)(c). 

Prior to making a contribution to an AGO, KRS 141.508 requires a 

taxpayer to apply for preapproval of the tax credit with the Department. The 

application must include the total amount of proposed contributions, the name 

of the AGO that will receive the contributions, and the year or years in which 

the contributions must be made, as well as whether the contributions will be 

cash or marketable securities. KRS 141.508(1). The Department is tasked 

with prescribing the manner of this preapproval process and is required to 
13

approve all preliminary approval applications within ten business days of 

receipt. KRS 141.508(2). If no amount of tax credit remains for allocation 

based on the total annual tax credit cap of $25 million (KRS 141.522(3)(b)), the 

Department must notify the taxpayer and the AGO that the application will be 

held in abeyance and will be funded on a first-come, first-served basis (if other 

taxpayers preapproved do not make their contributions and that “frees up” 

credit) or will be denied if all preapproved contributions are timely made. KRS 

141.508(3). 

There are time constraints imposed on eligible taxpayers making 

contributions. The taxpayer must make the preapproved contribution to the 

AGO no later than the earlier of fifteen business days following the date of the 

Department’s preapproval notice, or June 30 of the fiscal year of the approval.7 

KRS 141.508(4)(a). An AGO must certify to the Department the name of the 

taxpayer, the amount of contribution made, and the date of contribution within 

ten days of receipt. KRS 141.508(5)(a). Upon receipt of certification that the 

contribution was made, or the expiration of ten days without certification, 

whichever occurs first, the Department shall modify the amount of tax credit 

pending certification, the amount of credit allocated to taxpayers, and the 

remaining tax credit available for allocation. KRS 141.508(5)(b). 

7 If the preapproved contribution is marketable securities, the AGO is required 

to monetize the securities within five business days and notify the Department within 

ten business days of the monetization of the securities. KRS 141.508(4)(b). The 

taxpayer must supplement the contribution with cash if the monetized value of the 

securities is less than the preapproved contribution amount. Id.
14

These nonrefundable, nontransferable tax credits for contributions made 

to one or more AGOs during taxable years beginning on or after January 1, 

2021, but before January 1, 2026, are permitted against the taxes imposed on 

individuals (KRS 141.020), corporations (KRS 141.040), and limited liability 

entities (KRS 141.0401). KRS 141.522. If a taxpayer is entitled to more than 

one tax credit, they must follow the order for credit application as prescribed by 

KRS 141.0205. The aggregate value of total annual tax credit awarded under 

the EOA program shall not exceed $25 million. KRS 141.522(2). The EOA 

program offers a nearly dollar-for-dollar tax credit incentive to eligible 

taxpayers, awarding a credit per taxable year limited to the lesser of 95% of the 

total contributions made to an AGO, or $1 million. KRS 141.522(3). However, 

if the taxpayer elects to pledge a contribution for multiple taxable years, not to 

exceed four years, and the amount of contributions for each of the multiple tax 

years is equal to or exceeds the amount of contributions made to the AGO in 

the taxable year within which the pledge was made, the amount of allowable 

credit increases to 97%. KRS 141.522(4).8 If a tax credit awarded under KRS 

141.522 is not used by the taxpayer in the current taxable year, it may be 

carried forward for up to five succeeding taxable years until the tax credit has 

been utilized. KRS 141.522(5). The EOA program tax credits are awarded on a 

first-come, first-served basis each fiscal year until the annual tax credit cap of 

8 If the taxpayer does not remit the pledged amount of contributions during any 

taxable year during which a multi-year pledge is made, the taxpayer shall repay the 

portion of the credit resulting from the increase. KRS 141.522(4)(c). 
15

$25 million is reached. KRS 141.522(6). Again, the Department is tasked with 

monitoring credits to assure the $25 million annual cap is not exceeded. The 

program is “effective for taxable years beginning on or after January 1, 2021, 

but before January 1, 2026,” KRS 141.522(1), which results in potential credits 

of $125 million over five years, the currently authorized life of what is described 

as a pilot program.

The Department is also tasked with providing significant information to 

the Interim Joint Committee on Appropriations and Revenue no later than 

November 1 of each year in which tax credits permitted by KRS 141.522 are 

taken. KRS 141.524. The Department must compile all information in each 

annual report filed by AGOs, including the number and total amount of EOAs 

awarded to EOA students by household income ranges at intervals of $5,000;

the number and total EOAs awarded to students who are in foster care, who 

previously received an EOA, or are members of a household in which a student 

has previously received an EOA; and “any other information that may be 

necessary to assist the members of the General Assembly in determining that 

the purposes of this tax credit are being fulfilled.” Id. 

II. Section 184 and the Prohibition on Raising or Collecting Funds

for Nonpublic Schools

Although Plaintiffs have lodged several constitutional challenges to the 

EOA Act and the circuit court addressed two of them, we find the Section 184 

challenge dispositive. As we noted in Pennybacker, 308 S.W.3d at 676, the 

delegates to the 1890 Kentucky Constitutional Convention devoted two days to 

debating the “Education” portion of our current Kentucky Constitution set 
16

forth in Sections 183-189. Section 183 commands that the General Assembly 

“shall, by appropriate legislation, provide for an efficient system of common 

schools throughout the State.” The next section, Section 184, addresses the 

funding of those common schools in three sentences and a closing proviso.9 

The second and third sentences, which are the real thrust of Section 184 and 

control our disposition of this case, state:

The interest and dividends of said [common school] fund, together 

with any sum which may be produced by taxation or otherwise for 

purposes of common school education, shall be appropriated to the 

common schools, and to no other purpose. No sum shall be 

raised or collected for education other than in common 

schools until the question of taxation is submitted to the legal 

voters, and the majority of the votes cast at said election shall 

be in favor of such taxation. . . .

(Emphasis added.) The circuit court concluded that the EOA Act “raises a sum 

of money for private education outside the system of common schools” and 

thus violates Section 184. 

We recognize that “acts of the legislature carry a strong presumption of 

constitutionality,” Wynn v. Ibold, Inc., 969 S.W.2d 695, 696 (Ky. 1998), but that 

9 The first sentence identifies the then-existing bonds and stocks which 

comprised the common school fund in 1890: 

The bond of the Commonwealth issued in favor of the Board of Education 

for the sum of one million three hundred and twenty-seven thousand 

dollars shall constitute one bond of the Commonwealth in favor of the 

Board of Education, and this bond and the seventy-three thousand five 

hundred dollars of the stock in the Bank of Kentucky, held by the Board 

of Education, and its proceeds, shall be held inviolate for the purpose of 

sustaining the system of common schools. 

The closing proviso provides for the continuation of an existing tax for “the 

Agricultural and Mechanical College,” now the University of Kentucky: “Provided, The 

tax now imposed for educational purposes, and for the endowment and maintenance 

of the Agricultural and Mechanical College, shall remain until changed by law.” 
17

presumption does not relieve us of the responsibility to take a clear-eyed look 

at legislation to determine whether it complies with our Constitution. Having 

examined the detailed structure created by the Legislature to support AGOs 

and EOA accounts and considered the manner in which income taxes are 

assessed and EOA tax credits operate, we are compelled to agree that the EOA 

Act violates the plain language of Section 184. Simply stated, it puts the 

Commonwealth in the business of raising “sum[s] . . . for education other than 

in common schools.”

In one of the earliest citations to Section 184, Brown v. Board of

Education of Newport, 57 S.W. 612, 613 (Ky. 1900), this Court’s predecessor 

acknowledged the clear “intention . . . to prohibit the collection of any taxes to 

any extent for educational purposes other than common schools.”10 Later in 

Pollitt v. Lewis, 108 S.W.2d 671, 672 (Ky. 1937), the Court noted “it is equally 

clear that the framers of the Constitution must have had in mind that they 

were placing a limitation upon legislative power to expend money for 

education other than in common schools.” (Emphasis added.) 

Forty years ago, in Fannin v. Williams, 655 S.W.2d 480 (Ky. 1983), this 

Court applied Section 184 to strike down a statute supplying textbooks to 

children in Kentucky’s nonpublic schools. The statute tried to avoid 

constitutional infirmity by having the state department of libraries rather than 

10 As we observed in Pennybacker, 308 S.W.3d at 676 n.4, “[a] ‘common school’ 

is now defined in KRS 158.030 as ‘an elementary or secondary school of the state 

supported in whole or in part by public taxation.’” The term has always been 

understood to encompass those schools.
18

the department of education purchase the books; having the books distributed 

to pupils even though the administrators of the nonpublic schools were 

responsible for the books’ custody, use and return; and appropriating funds 

directly to the department of libraries rather than using the common school 

fund. Id. at 482. As we stated then: “The statute in question seeks to evade 

constitutional limitations by a series of devices, which do more to point up the 

constitutional problems than to avoid them.” Id. The Court succinctly and 

colorfully concluded:

In sum, the Kentucky Constitution contemplates that public funds 

shall be expended for public education. The Commonwealth is 

obliged to furnish every child in this state an education in the 

public schools, but it is constitutionally proscribed from providing 

aid to furnish a private education. We cannot sell the people of 

Kentucky a mule and call it a horse, even if we believe the public 

needs a mule.

Id. at 484 (citation omitted). The Fannin Court did note that under Section 184 

a majority of legal voters can approve the expenditure of public funds “other 

than in common schools.” Id. “If the legislature thinks the people of Kentucky 

want this change, [it] should place the matter on the ballot.” Id.

11

11 The Attorney General criticizes Fannin and urges us to overrule it, leaning 

heavily on two cases as indicative of the proper application of Section 184 and as 

illustrative of the constitutionality of the EOA Act. In Hodgkin v. Board for Louisville & 

Jefferson County Children’s Home, 242 S.W.2d 1008 (Ky. 1951), the Court upheld an 

appropriation to a public institution, essentially what was then known as a reform 

school, operated by Louisville and Jefferson County. In that Court’s words, “the Act 

squarely presents the question as to whether a school operated by any public 

authority other than a regular school district may constitutionally receive a portion of 

the Common School Fund.” Id. at 1009. Unsurprisingly, the Court found no bar to 

appropriating state funds to an institution operated by local government units for the 

public purpose of education, benefitting the state. In Butler v. United Cerebral Palsy of 

Northern Ky., Inc., 352 S.W.2d 203 (Ky. 1961), then-Judge Palmore, writing for the 

Court, noted that the legislation at issue pertained to funding schools for “exceptional 

children,” an undefined term. From the text and record, he found the law “covers 
19

The EOA Act goes to great lengths, well beyond those in Fannin, to avoid 

constitutional infirmity, but is similarly unsuccessful when we “look through 

the form of the statute to the substance of what it does.” O’Harrah, 262 

S.W.2d at 389. A tax credit is by definition a means of reducing one’s tax 

liability to the state (or the federal government as the case may be). BLACK’S 

LAW DICTIONARY (11th ed. 2019) defines “tax credit” as “[a]n amount subtracted 

directly from one’s tax liability, dollar for dollar, as opposed to a deduction from 

gross income.”12 So Kentucky taxpayers who participate in the EOA program 

get essentially dollar-for-dollar credit (generally 95%) against the income taxes 

they would otherwise owe the Commonwealth because they have contributed to 

an AGO. 

The state-accredited and state-monitored AGOs administer EOAs which 

allocate those contributed monies to nonpublic school tuition or perhaps other 

those children within this state who would be entitled to attend its common schools, 

but for whom the school board, in its reasonable discretion, concedes that the 

program and facilities of a particular school district are thus far inadequate.” Id.

at 205 (emphasis added). After referencing the Kentucky Industries for the Blind, 

Mayo State Vocational School and Northern Kentucky State Vocational School as 

institutions outside the common school system that could be supported or operated by 

the state, the Court concluded: “We do not believe it was the intention of the delegates 

in adopting Const. §§ 184 and 186 to deny forever the possibility of special 

educational assistance to those who by no choice of their own are unsuited to the 

standard program and facilities of the common school system.” Id. at 207. So 

Hodgkin actually involved funding a public institution and Butler addressed 

exceptional children, the most obvious examples being the “physically or mentally 

handicapped,” id. at 205, who the local school board conceded were unsuited to the 

regular public school. Neither provides precedent for concluding HB 563 complies 

with Section 184.

12 By contrast, a tax deduction is “[a]n amount subtracted from gross income 

when calculating adjusted gross income, or from adjusted gross income when 

calculating taxable income.” BLACK’S LAW DICTIONARY at 519.
20

allowed personal educational expenditures. The EOAs must be established by 

a “parent” on behalf of an “eligible student.” KRS 141.506. Under KRS 

141.502(11): “[p]arent] means a biological or adoptive parent, legal guardian, 

custodian, or other person with legal authority to act on behalf of an EOA 

student.” “Eligible student” is defined as a Kentucky student in a household 

whose annual income does not exceed 175% of household income necessary to 

establish eligibility for reduced meals; who has previously received an EOA; or 

who is a member of the household of a student who currently has an AGO. 

KRS 141.502(6). Notably, an “eligible taxpayer” who can qualify for an EOA tax 

credit is not limited to parents but includes “an individual or business, 

including but not limited to a corporation, S corporation, partnership, limited 

liability company, or sole proprietorship subject to tax imposed under KRS 

141.020, 141.040, or 141.0401.” KRS 141.502(7). 

These provisions make abundantly clear the Legislature’s intent to offer 

this tax credit to a wide array of Kentucky taxpayers, with taxpayers of means, 

whether individuals or business entities, being able to contribute up to $1 

million per year to an AGO, KRS 141.522(3), in “the form of cash or marketable 

securities,” KRS 141.508(1). So while the family of an eligible student for 

whom an EOA has been created may contribute their hard-earned dollars,13

13 A taxpayer is required to make the entire preapproved contribution within 

fifteen business days following the date of the Department’s preapproval notice, or 

June 30 of the fiscal year of the preapproval, whichever falls earlier. KRS 

141.508(4)(a). How parents of an eligible student could qualify given their limited 

financial means is unclear. Logic dictates that the taxpayers who seek the tax credit 

are choosing to use the tax monies they otherwise owe the Commonwealth to fund 

EOAs (and nonpublic schools) rather than remitting that money to the state.
21

the statute creates a system whereby any Kentucky taxpayers who want to 

fund EOAs can send their money to an AGO for use at nonpublic schools 

instead of paying a comparable amount which they owe in Kentucky income 

taxes. This lucrative tax benefit incentivizes Kentucky taxpayers to contribute 

to AGOs. If the taxpayer is an individual and receives a regular paycheck with 

estimated state income tax liability withheld (as Kentucky employers are 

required to do by KRS 141.310), then realization of the benefit derived from the 

EOA credit will be in the form of a tax refund check sent to the taxpayer after 

they file the return on which they claim the EOA tax credit. Similarly, if other 

taxpayers have made quarterly estimated payments, those payments would be 

refunded to the extent their payments exceed their liability after claiming the 

EOA tax credit.

The EOA tax credit is made possible by the previously-described 

elaborate structure within the Department, which oversees vetting, accrediting 

and auditing AGOs, as well as preapproving individual EOA credit requests and 

monitoring the Commonwealth’s fiscal exposure so that the total EOA credits 

annually do not exceed $25 million. The substance of this bill is obvious. The 

Commonwealth may not be sending tax revenues directly to fund nonpublic 

school tuition (or other nonpublic school costs) but it most assuredly is 

raising14 a “sum . . . for education other than in common schools” by forgiving 

a taxpayer’s tax liability to the Commonwealth to the extent the taxpayer has 

14 “Raise” is defined in BLACK’S LAW DICTIONARY, in part, as “to gather or collect.”
22

contributed a preapproved amount to an AGO to fund an EOA account. In 

simple terms, taxpayers, whether individuals or business entities, who 

otherwise owe state income tax can instead send that money to nonpublic 

schools via an AGO, reducing their tax liability and the state coffers by a 

corresponding amount. As the circuit court correctly observed, the legislation 

“allows this favored group of taxpayers to re-direct the income taxes they owe 

the state to private AGOs, and thereby eliminate their income tax liability.” 

This diversion of owed tax liability monies is made possible by the significant 

amount of state resources employed to create and operate the EOA program.15 

The Attorney General insists that Section 184 only prohibits (1) using tax 

money allocated to the Common School Fund for other purposes and (2) 

imposing “a new tax to benefit education outside the common-school system 

without a majority vote.” Reading the section in that narrow fashion, he urges 

that it does not otherwise prohibit the Legislature from aiding non-common 

schools and asks us to hold “that Section 184 does not prohibit the General 

Assembly from decreasing a Kentuckian’s tax burden for having donated to a 

nonprofit organization that then helps lower-income Kentucky students pursue 

the education best suited to them.” We respectfully decline to construe the 

Constitution in a way that would avoid its plain meaning. Taxpayers who owe 

Kentucky income tax owe real dollars to the state and when they are not 

15 The Department’s statutorily-mandated obligations are significant and have 

no precedent that we can discern in terms of using state funds and employees to build 

and staff a program that benefits nonpublic entities.
23

required to pay those real dollars in the first instance or have them refunded 

because an EOA tax credit reduces or eliminates their tax bill, the public 

treasury is diminished and the Commonwealth and other taxpayers must 

subsidize that taxpayer’s personal choice to send money to an AGO for use at 

nonpublic schools. In the language of Section 184, the EOA program causes 

“sum[s]” to be “raised” for “education other than in common schools.” And, 

significantly, those sums are being raised through an elaborate structure, 

constructed and administered by Department employees paid with tax dollars. 

To conclude the EOA Act does not violate Section 184 would require us to 

ignore “the substance of what [the statute] does.” O’Harrah, 262 S.W.2d at 

389.

The Attorney General further insists that the “raised or collected” 

language in Section 184 must be read with the remainder of that sentence, i.e., 

“until the question of taxation is submitted to the legal voters, and the majority 

of the votes cast at said election shall be in favor of such taxation.” We agree, 

however, we decline to read that language as addressing only imposition of a 

new tax. Whether substantial tax credits eliminating or dramatically reducing 

a taxpayer’s debt to the state should be available to fund nonpublic schools is a 

“question of taxation.” As the Fannin Court stated, “if the legislature thinks the 

people of Kentucky want this change, [it] should place the matter on the 

ballot.” 655 S.W.2d at 484.

Equally unavailing is the Attorney General’s argument that “HB 563 only 

affects private funds that never make it to the State Treasury.” We disagree. 
24

The money at issue cannot be characterized as simply private funds, rather it 

represents the tax liability that the taxpayer would otherwise owe but will have 

forgiven entirely or reduced. Moreover, in reality, through withholding on the 

taxpayer’s paycheck or the taxpayer’s declarations of estimated income tax 

liability those funds likely do make it to the State Treasury and are then 

refunded. Regardless, the funds at issue are sums legally owed to the 

Commonwealth of Kentucky and subject to collection for public use including 

allocation to the Department of Education for primary and secondary education

but for the unconstitutional EOA Act which reallocates them to fund nonpublic 

school tuition.

In an effort to convince this Court to hold the EOA Act passes muster 

under the Kentucky Constitution, Intervening Defendants also suggest that any 

holding to the contrary would imperil the charitable donations that Kentucky 

taxpayers make to nonpublic institutions offering primary and secondary 

education. Two facts cause this argument to fail: charitable deductions have a 

relatively de minimis effect on state income tax collections vis-à-vis an EOA tax 

credit and, more importantly, the Commonwealth is not involved in any way in 

raising or collecting those funds through an elaborate structure created by the 

Legislature and overseen by the Department. 

As to the first point, we noted above that a tax credit results in a virtually 

dollar-for-dollar reduction in the taxpayer’s income tax liability while a tax 

deduction simply reduces that taxpayer’s income by a comparable amount, 

resulting in savings on each dollar contributed at the taxpayer’s tax rate. 
25

Given the 95% EOA tax credit allowed under KRS 141.522(3),16 a taxpayer who 

directs $1,000 to an AGO saves $950 in income tax and reduces the 

Commonwealth’s tax collections by a corresponding amount.17 By contrast, a 

taxpayer who donates $1,000 to a private or parochial primary or secondary 

school and claims a charitable contribution deduction reduces their income by 

a corresponding amount and generally experiences tax savings at the 

applicable tax rate. Pursuant to KRS 141.020(2)(d), “[f]or taxable years 

beginning on or after January 1, 2018, but before January 1, 2023, the tax 

rate shall be five percent (5%) of net income.” Consequently, the $1,000 

charitable contribution results, at most, in the taxpayer saving $50 in taxes. 

But more importantly, the features that cause the EOA Act and 

corresponding tax credit to violate Section 184 of the Kentucky Constitution 

are not present in a charitable tax deduction. In the latter, the taxpayer 

unilaterally decides to write a check or donate an asset directly to a nonpublic 

school. The Commonwealth plays no role in the transaction. The school 

acknowledges the gift and the taxpayer takes a charitable deduction on their 

tax return. In contrast to the Commonwealth’s passive role in the case of a 

charitable deduction, the EOA program is a state-created structure—the state 

16 As previously noted, the tax credit increases to 97% in the case of a multiyear pledge in accordance with KRS 141.522(4)(b).

17 The portion of a taxpayer’s contribution to an AGO that is not offset by the 

EOA tax credit, i.e., 5%, can be claimed as a deduction for both federal and state tax 

purposes. For example, if a taxpayer contributes $500,000 to an AGO, they are 

entitled to a $475,000 tax credit. The remaining $25,000 is subject to the allowable 

deduction for charitable contributions.
26

dedicates state employees to constructing and overseeing a program whereby 

private AGOs are created, accredited and audited; taxpayers apply to the 

Department in advance for preapproved credit; parents apply for EOAs at the 

AGOs which would not exist but for the state accreditation system; and the 

Department is involved day-in and day-out in accrediting and overseeing AGOs, 

preapproving donations to AGOs, issuing tax credit letters to taxpayers, 

monitoring AGO business operations and reporting to the General Assembly 

regarding the overall program. The EOA program would not exist but for this 

elaborate, state-supported structure, which raises sums “for education other 

than in common schools” in violation of Section 184 of the Kentucky 

Constitution. Nothing about the charitable deduction allowance remotely 

approaches the elaborately crafted EOA program and corresponding tax credit. 

Even against “a strong presumption of constitutionality,” Wynn, 969 

S.W.2d at 696, this Court is responsible for assessing statutes based on the 

directives in our Constitution. After careful review, we cannot avoid the 

conclusion that the EOA Act violates the plain language of Section 184.

III. Inapplicability of Precedent from Other Jurisdictions Without 

Comparable State Constitution Provisions

Intervening Defendants rely on cases from other jurisdictions as support 

for their view that the EOA Act is constitutional. In fact, the programs in those 

states are substantially different from the EOA program. More to the point, 

those other jurisdictions do not have constitutional provisions regarding 

education that are comparable to Section 184 of the Kentucky Constitution

and that alone renders their cited cases unpersuasive. 
27

For example, the Alabama Accountability Act of 2013 (AAA) was enacted 

to provide educational flexibility and state accountability for students in failing 

schools, defined as public K-12 schools labeled as persistently low-performing 

by the Department of Education. Ala. Code § 16-6D-4(5). The AAA grants two 

types of income tax credits: (1) a tax credit to the parent of a student enrolled 

in or assigned to attend a failing school to help offset the cost of transferring 

the student to a nonfailing public school or nonpublic school, equal to the 

lesser of 80 percent of the average state cost of attendance for public K-12 

school or actual cost of attending a nonfailing public or nonpublic school (Ala. 

Code § 16-6D-8(a)); and (2) a tax credit to individual taxpayers equal to the 

total contributions made to Scholarship Granting Organizations (SGOs) during 

the taxable year up to 50% of the taxpayer’s tax liability (not to exceed $7,500 

per taxpayer), and a tax credit to corporate taxpayers of 50% of their total 

contributions to SGOs up to 50% of the taxpayer’s tax liability. 2013 Alabama 

Laws Act 2013-64 (H.B. 84).18 The AAA of 2013 imposes an aggregate tax 

credit cap of $25 million annually. Thus, while Alabama offers a unique 

benefit for parents of students in public schools recognized as “failing,” 

18 The AAA, as enacted when Magee v. Boyd, 175 So. 3d 79 (Ala. 2015), 

discussed below, was rendered, included the $7,500 limit for individual taxpayers and 

restriction regarding 50% of the individual or corporate tax liability. The AAA, as 

currently enacted, allows an individual tax credit of 100% of the contributions to 

SGOs, up to 100% of the tax liability of the taxpayer (not to exceed $100,000), and a 

corporate tax credit equal to 100% of the total contributions to SGOs, up to 100% of 

the tax liability of the taxpayer. See Ala. Code § 16-6D-9. 
28

taxpayers that make contributions to SGOs can avoid only 50% of their tax 

liability. 

Plaintiffs in Magee v. Boyd, 175 So. 3d 79, 91 (Ala. 2015), challenged the 

legality of the legislation, arguing, in part, that the AAA appropriated funds 

from the Educational Trust Fund (created by tax revenues and used to support 

and maintain public education in Alabama) to reimburse tuition and fees to 

nonpublic schools in violation of Article IV, Section 73 of the Alabama 

Constitution. That section provides that “No appropriation shall be made to 

any charitable or educational institution not under the absolute control of the 

state . . . except by a vote of two-thirds of all members elected to each house.” 

The plaintiffs contended the credits have the practical effect of being an 

appropriation of public funds to nonpublic schools because the tax credits 

prevented Alabama from collecting tax revenues that it would have otherwise 

been entitled to collect. Id. at 121. 

The Alabama Supreme Court differentiated tax credits from 

appropriations and reasoned that the tax credits available to parents are paid 

to parents and not educational institutions. Id. at 124. Likewise, in granting 

the individual and corporate taxpayer credits for contributions to SGOs “no 

money is set aside or specified from the public revenue or treasury to be 

applied to a charitable or educational institution.”19 Id. Plainly, Alabama’s 

19 Plaintiffs also argued unsuccessfully that the AAA provides a tax credit in 

violation of Alabama Constitution Article XI, Section 211.02, which provides that 

income taxes shall be earmarked for placement in the ETF and are “to be used for the 

payment of public school teachers salaries only.” Id. at 91.
29

Constitution does not contain a provision comparable to Kentucky Constitution 

Section 184 prohibiting raising or collecting funds for nonpublic schools. The 

Magee court’s focus on the distinction between a tax credit and appropriation, 

even if persuasive,20 is irrelevant to our task of assessing the EOA Act in light 

of Section 184.

In Kotterman v. Killian, 972 P.2d 606, 610 (Ariz. 1999), the Arizona 

Supreme Court rejected similar constitutional challenges to an Arizona 

educational tax credit program that allowed up to $500 in tax credits21 for 

taxpayers who made contributions to school-tuition organizations that, in turn, 

used the contributions to offer scholarships for students to attend 

nongovernmental schools. Arizona Constitution Article IX, Section 10, 

prohibits the appropriation of public money or property for private schools and 

20 Although whether the EOA is an appropriation measure is not the issue in 

this case, we note the amicus brief filed by The Kentucky Center for Economic Policy 

and three individuals points out that the EOA is for all intents and purposes “the 

functional equivalent” of a direct spending program (appropriation). 

The funds raised for the program are, in all practical respects, generated 

as tax revenues of the Commonwealth. And the expenditures for the 

EOA program are, in all practical respects, expenditures of state tax 

revenues. Any distinctions between this program and an analogous 

program expressly appropriating state tax revenues to the AGOs are 

entirely nominal. 

The amicus focuses on the fact that the exceptionally generous tax benefits “ cover 

virtually the entire costs of the taxpayers’ expenditures”; the program “is designed and 

structured by the state government”; and it is “not an open-ended entitlement 

program” but is authorized only to an annual cap ($25 million) and for a limited period 

of time (five years). Thus, even if the issue before us were reframed (incorrectly) to 

focus on whether state funds are being appropriated this Court would be required to 

analyze the EOA by looking carefully at what it actually does instead of simply saying, 

as some courts have, that a tax credit is not an appropriation.

21 The tax credits under the Arizona educational tax credit program increased 

yearly based on inflation. For example, in tax year 2021 the credit was $611 for single 

filers and in 2022 it is $623 for single filers. 
30

Article II, Section 12 provides that no public money or property shall be 

appropriated to any religious instruction. Much like the Magee court, the 

Kotterman court reasoned that tax credits were not appropriations and rejected 

the argument that the tax credits are public funds, emphasizing that the 

money never enters the state’s control. Id. at 618.22

The tax credits offered under the Alabama and Arizona programs are de 

minimis compared to the significant credits—up to $1 million per taxpayer per 

year―available to individual or business entity taxpayers under the Kentucky 

EOA Act. More importantly, a proscription on appropriating state funds is 

distinct from a proscription on raising or collecting any “sum” for a prohibited 

purpose. Section 184 of the Kentucky Constitution pertains not just to “public 

funds” or “appropriations” but any “sums” that are “raised or collected for 

education other than in common schools.” This simple but expansive language 

chosen by the drafters of our Kentucky Constitution avoids the need to 

22 See also Gaddy v. Georgia Dep’t of Revenue, 802 S.E.2d 225, 227-28 (Ga. 

2017) (the Georgia Supreme Court discussed the distinction between credits and 

appropriations after taxpayers challenged the constitutionality of a tax credit program 

allowing individuals and businesses to donate to non-profit scholarship organizations, 

that in turn distribute the funds as scholarships or tuition grants for private schools. 

The Georgia Constitution only prohibits taking money “from the public treasury” to 

fund certain private schools. Art. I, §2, Par. VII. The court ultimately dismissed the 

constitutional challenge because the Plaintiffs lacked standing. Id. at 232); Toney v. 

Bower, 744 N.E.2d 351 (Ill. App. 2001) (an Illinois intermediary court held that tax 

credits awarded as part of an educational program were not appropriations. The 

Illinois Constitution prohibits appropriating or paying from public funds to support 

schools controlled by churches or sectarian denominations. Article 10, § 3.); McCall v. 

Scott, 199 So. 3d 359, 370-71 (Fla. Dist. Ct. App. 2016) (Florida appellate court 

reasoned that “the authorization of tax credits . . . involve[s] no appropriation from the 

public treasury.” The court ultimately held that Plaintiffs lacked standing to bring the 

constitutional challenges.). 
31

determine what exactly is a “public fund” or “appropriation” and instead 

focuses on the actions of those acting on behalf of the Commonwealth, namely 

are they raising or collecting sums for nonpublic schools. Under the EOA Act 

they most definitely are and, consequently, the Act violates Section 184.

CONCLUSION

The Education Opportunity Account Act violates the proscription in 

Section 184 of the Kentucky Constitution on the raising or collecting of 

“sum[s]” for “education other than in common schools.” Accordingly, we affirm 

the Franklin Circuit Court’s Opinion and Order on those grounds.

All sitting. All concur. 

COUNSEL FOR COMMONWEALTH OF 

KENTUCKY EX REL. ATTORNEY GENERAL

DANIEL CAMERON:

Matthew F. Kuhn

Alexander Y. Magera

Office of the Solicitor General

COUNSEL FOR HOLLY M. JOHNSON,

IN HER OFFICIAL CAPACITY AS

SECRETARY OF THE FINANCE AND

ADMINISTRATION CABINET; AND THOMAS B.

MILLER, IN HIS OFFICIAL CAPACITY AS

COMMISSIONER OF THE KENTUCKY 

DEPARTMENT OF REVENUE:

Brian C. Thomas

William Robert Long, Jr.

Finance & Administration Cabinet

Bethany Atkins Rice

Office of Legal Services for Revenue

Cabinet
32

COUNSEL FOR COUNCIL FOR

BETTER EDUCATION, INC.; FRANKFORT

INDEPENDENT SCHOOL BOARD; AND

WARREN COUNTY SCHOOL BOARD:

Byron E. Leet

Virginia Hamilton Snell

Sean Gregory Williamson

Mitzi D. Wyrick

Wyatt Tarrant & Combs, LLP

COUNSEL FOR NANCY DEATON 

AND AKIA MCNEARY:

Matthew Daniel Doane

Doane & Elliott, P.S.C.

Joshua A. House

Benjamin A. Field

Michael Bindas

Institute for Justice

COUNSEL FOR MICHELLE GRIMES

JONES, ON BEHALF OF HERSELF AND

HER MINOR CHILDREN; CHRIS

RASHEED, ON BEHALF OF HIMSELF

AND HIS MINOR CHILD; AND KATHERINE

WALKER-PAYNE, ON BEHALF OF HERSELF

AND HER MINOR CHILDREN:

Jeffrey S. Walther

John K. Wood

Walther, Gay & Mack, PLC

Kristen Hollar

Alice O’Brien

National Education Association
33

COUNSEL FOR THE BOARD OF

EDUCATION OF THE AUGUSTA

INDEPENDENT SCHOOL DISTRICT;

THE BOARD OF EDUCATION OF

THE BOWLING GREEN INDEPENDENT

SCHOOL DISTRICT; THE BOARD 

OF EDUCATION OF THE CORBIN

INDEPENDENT SCHOOL DISTRICT;

THE BOARD OF EDUCATION OF THE

PAINTSVILLE INDEPENDENT SCHOOL

DISTRICT; THE BOARD OF EDUCATION

OF THE PINEVILLE INDEPENDENT 

SCHOOL DISTRICT; AND THE BOARD OF

EDUCATION OF THE RACELAND 

WORTHINGTON INDEPENDENT SCHOOL

DISTRICT:

Timothy Crawford

Regina A. Jackson

Michael A. Owsley

Lindsay Tate Ratliff Porter

English, Lucas, Priest & Owsley

COUNSEL FOR AMICI CURIAE,

AMERICAN FEDERATION OF 

TEACHERS; KENTUCKY CONFERENCE

OF THE NAACP; PASTORS FOR

CHILDREN; PASTORS FOR KENTUCKY 

CHILDREN; PUBLIC FUNDS PUBLIC 

SCHOOLS AND SOUTHERN 

EDUCATION FOUNDATION:

Bethany A. Breetz

Stites & Harbison, PLLC

Wendy Lecker

Jessica Levin

Education Law Center
34

COUNSEL FOR AMICI CURIAE,

JENNIFER BIRD-POLLAN; 

PETER ENRICH; KENTUCKY CENTER 

FOR ECONOMIC POLICY; AND

DARIEN SHANSKE:

Peter Enrich

Northeastern University School of Law

Pamela Thomas

Kentucky Center for Economic Policy

COUNSEL FOR AMICUS CURIAE, THE

BOARD OF EDUCATION OF FAYETTE

COUNTY PUBLIC SCHOOLS:

Joshua M. Salsburey

Donald C. Morgan

Sturgill, Turner, Barker & Moloney, PLLC

COUNSEL FOR AMICUS CURIAE

EDCHOICE KENTUCKY:

Philip D. Williamson

Taft Stettinius & Hollister LLP

John A. Meiser

Notre Dame Law School Religious Liberty Clinic