Court Opinion

ID: 9326268
Source: CourtListenerOpinion
Date Created: 2022-12-15 16:04:11.1279+00
Date Added: 2024-06-11T17:15:04.040483
License: Public Domain

RENDERED: DECEMBER 15, 2022
                                             TO BE PUBLISHED

          Supreme Court of Kentucky
                       2021-SC-0518-TG
                        (2021-CA-1320)

COMMONWEALTH OF KENTUCKY EX                         APPELLANT
REL. ATTORNEY GENERAL DANIEL
CAMERON

            ON APPEAL FROM FRANKLIN CIRCUIT COURT
V.              HON. PHILLIP J. SHEPHERD, JUDGE
                         NO. 21-CI-00461

HOLLY M. JOHNSON, IN HER                            APPELLEES
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 WALKER-
PAYNE, 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
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,                        APPELLANTS
INC.; FRANKFORT INDEPENDENT
SCHOOL BOARD; AND WARREN
COUNTY SCHOOL BOARD

             ON APPEAL FROM FRANKLIN CIRCUIT COURT
V.               HON. PHILLIP J. SHEPHERD, JUDGE
                          NO. 21-CI-00461

HOLLY M. JOHNSON, IN HER                             APPELLEES
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
THE KENTUCKY DEPARTMENT OF
REVENUE

                               AND

                         2021-SC-0520-TG
                          (2021-CA-1320)

MICHELLE GRIMES JONES, ON                            APPELLANTS
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

             ON APPEAL FROM FRANKLIN CIRCUIT COURT
V.               HON. PHILLIP J. SHEPHERD, JUDGE
                          NO. 21-CI-00461

HOLLY M. JOHNSON, IN HER                             APPELLEES
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

                               AND
                                 2021-SC-0522-TG
                                  (2021-CA-1323)

AKIA MCNEARY AND NANCY DEATON                                  APPELLANTS

                  ON APPEAL FROM FRANKLIN CIRCUIT COURT
V.                    HON. PHILLIP J. SHEPHERD, JUDGE
                               NO. 21-CI-00461

COUNCIL FOR BETTER EDUCATION,                                   APPELLEES
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

                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 account-

     1   Act of Mar. 30, 2021, ch. 167, 2021 Ky. Acts 1041.
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.

                                        2
      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

                                        3
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

                                          4
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.

                                           5
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

                                         6
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.”

                                           7
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

                                        8
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.”

                                           9
                                    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
                                        10
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

                                        11
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

                                        12
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.

                                          13
      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).

                                         14
$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
                                         15
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

      9The 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.”

                                         16
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.

                                        17
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
                                           18
      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.

                                          19
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.

                                          20
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.”

                                             21
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.

                                         22
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.

                                        23
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.

                                        24
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 multi-
year 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.

                                          25
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.
                                       26
      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.

                                         27
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.

                                         28
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.

                                          29
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.).

                                           30
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

                                       31
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

                                 32
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

                                  33
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

                                        34