Opinion ID: 2539248
Heading Depth: 2
Heading Rank: 3

Heading: Supreme Court of the United States

Text: While this case was under submission, the Supreme Court of the United States issued an opinion in which it determined that a tax credit is not a direct expenditure of funds generated through taxation. [11] In Arizona Christian School Tuition Organization v. Winn, ___ U.S. ___, 131 S.Ct. 1436, 1440, 179 L.Ed.2d 523 (2011), a group of taxpayers challenged an Arizona statute that provided for tax credits for contributions made to school tuition organizations. The school tuition organizations then would distribute the contributions as scholarships to students attending private schools, many of which are religious. Id. The taxpayers challenged the Arizona statute as violative of the Establishment Clause. Id. The Supreme Court's threshold question was whether the taxpayers had standing to bring their claim. Id. The taxpayer standing doctrine is applied narrowly in federal courts, as it only pertains to alleged violations of the Establishment Clause. Id. at 1445. Taxpayers have standing in federal courts in such cases if: (1) there is a logical link between taxpayer status and the legislative enactment; and (2) there is a nexus between taxpayer status and the constitutional infringement alleged. Id. (citing Flast v. Cohen, 392 U.S. 83, 102, 88 S.Ct. 1942, 20 L.Ed.2d 947 (1968)). `The taxpayer's allegation in such cases would be that his tax money is being extracted and spent in violation of specific constitutional protections against such abuses of legislative power.' Id. at 1446 (quoting Flast, 392 U.S. at 106, 88 S.Ct. 1942). The task for the Supreme Court was to determine whether a tax credit constituted public money that was extracted and spent in violation of the Establishment Clause. See id. at 1447. In that context, the Court concluded that a tax credit is not a government expenditure. Id. While tax credits and government expenditures have similar consequences, a tax credit does not implicate all taxpayers like a government expenditure does. Id. A government expenditure implicates every taxpayer. Id. A dissenter whose tax dollars are `extracted and spent' knows that he has in some small measure been made to contribute to an establishment in violation of conscience. Id. (quoting Flast, 392 U.S. at 106, 88 S.Ct. 1942). [T]he taxpayer's direct and particular connection with the establishment does not depend on economic speculation or political conjecture. Id. On the other hand, a tax credit merely has an effect on the taxpayer who claims it. Id. There is no specific connection between the dissenting taxpayer and the establishment. Id. Any financial injury [to the dissenting taxpayer] remains speculative. Id. The taxpayers here argue that Arizona Christian School is inapplicable because federal taxpayer standing is distinct from Missouri taxpayer standing. It is true that the United States Constitution does not have provisions that are similar to article III, sections 38 and 39 of the Missouri Constitution, which prohibit the State from expending taxpayer money or lending credit to private persons, associations, or organizations. And the test for taxpayer standing in federal courts is narrower than the standard for taxpayer standing in Missouri courts. Despite the Supreme Court's decision in Arizona Christian School arising in a different context, it is instructive because the taxpayer standing in both federal and Missouri courts is similar: both require an expenditure. Before the Court determined whether there was an Establishment Clause violation under the federal constitution, it analyzed generally whether a tax credit is an expenditure of public money. The same analysis is required in this case; determining whether tax credits are a direct expenditure of funds generated through taxation must be analyzed as a preliminary matter before reaching the constitutional question. As discussed previously, this Court agrees with the Supreme Court's holding in Arizona Christian School. Here, the redeveloper tax credit does not implicate every taxpayer as a government expenditure does. When a government expenditure extracts money from the public treasury, every taxpayer's dollars contribute to the disbursement. A tax credit, on the other hand, merely affects the taxpayer who claims it. Because the money never is deposited into the state's coffers, any effect on the taxpayers in general is merely speculative. See Arizona Christian School, 131 S.Ct. at 1447.