Could Idaho voters pass a 1995 initiative giving parents a $500 income tax credit for each child not attending public school, and would that survive the U.S. and Idaho constitutions' bans on aiding religious schools?

Plain-English summary

Petitioner John Slack filed an initiative petition with the Idaho Secretary of State on June 26, 1995, called the "Non-Public Education Enhancement Act." The initiative would have granted parents a $500 Idaho income tax credit for each compulsory-school-aged child (ages 7-16) who did not attend an Idaho public school for the tax year. The stated purpose was to "encourage non-public education growth and to alleviate the pressure and expense of overcrowded schools." The credit would have applied to parents of children in private secular schools, parochial schools, and home schools alike.

Deputy AG Kirby Nelson, writing for AG Alan Lance, walked through both federal and Idaho constitutional tests and concluded the initiative would probably pass constitutional muster but needed revision on several drafting points.

Under the U.S. Constitution's Establishment Clause, the controlling cases were Committee for Public Education v. Nyquist, 413 U.S. 756 (1973), which struck down a New York scheme limited to non-public school parents, and Mueller v. Allen, 463 U.S. 388 (1983), which upheld a Minnesota deduction available to all parents. The Idaho proposal was a hybrid: it limited the benefit to non-public school parents (more like Nyquist) but it was a tax credit rather than a direct grant, and it routed the benefit through individual parental choice (more like Mueller). The AG concluded that the parental-choice routing and the broad scope (private secular, parochial, and home-school parents all included) probably saved it under federal Establishment Clause analysis.

Under the Idaho Constitution's Article 9, § 5, the analysis was tougher. Idaho's no-aid-to-religion clause has historically been read more strictly than the federal Establishment Clause. The leading case, Epeldi v. Engelking, 94 Idaho 390, 488 P.2d 860 (1971), struck down a state-funded transportation statute for private school students because some of the schools were religious. The AG had also recently opined that direct private-school tuition tax credits would be unconstitutional under Idaho's stricter rule. But the proposed initiative was distinguishable: a tax credit for non-use of public schools is one step further removed from any direct benefit to a religious school. Some parents claiming the credit would home-school or use private secular schools, in which case no benefit reaches a religious institution at all. And the existing Idaho Code § 63-3029A (charitable-contribution credit for donations to public or private non-profit educational institutions) was constitutional, suggesting Idaho's no-aid clause is not absolute even when some money reaches religious schools.

The AG flagged five drafting issues: (1) the 270-day residency requirement could violate the Commerce Clause as applied to part-year residents; (2) the cross-reference to IRC § 151(c)(3) for "qualified dependent" was incorrect (that section deals with claims, not definitions); (3) the credit overlapped problematically with Idaho Code § 33-1403, which lets border school districts pay tuition for Idaho students attending out-of-state public schools; (4) the "did not attend an Idaho public school" criterion needed clarification on dual-enrollment and partial-year scenarios; and (5) the January 1, 1996, effective date was before the November 1996 vote, creating tax-form complications. The AG recommended changing the effective date to January 1, 1997.

Currency note

This opinion was issued in 1995. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Important post-1995 update: The U.S. Supreme Court's school-choice jurisprudence has continued to evolve, including Zelman v. Simmons-Harris, 536 U.S. 639 (2002) (upholding Cleveland voucher program); Espinoza v. Montana Department of Revenue, 591 U.S. 464 (2020) (state cannot exclude religious schools from a generally available scholarship program); and Carson v. Makin, 596 U.S. 767 (2022) (state cannot exclude religious schools from a tuition-assistance program). The federal Establishment Clause analysis in this 1995 certificate is older than the modern free-exercise developments. Idaho courts have separately interpreted Idaho's no-aid clause; verify current Idaho case law before relying on any analogy from this 1995 review.

Common questions

What is the difference between Nyquist and Mueller, and why did the AG rely on both?

Both cases involved state assistance to families with children in non-public schools, but the Supreme Court reached opposite results. In Nyquist (1973), the Court struck down a New York statute that, among other things, granted "tax benefits" available only to parents of children in non-public schools. The Court read the benefits as "thinly disguised tuition grants" that primarily benefited religious schools. In Mueller (1983), the Court upheld a Minnesota tax deduction for tuition, books, and transportation expenses available to all parents, public and non-public, even though most of the actual deductions were claimed by parents of children in religious schools. The two distinctions: (1) Mueller was a deduction; Nyquist was a credit-or-grant; and (2) Mueller was facially neutral as to public/non-public; Nyquist was limited to non-public. The Idaho proposal looked more like Nyquist on the public/non-public neutrality question (it was limited to non-public school parents) but more like Mueller on the parental-choice routing.

Why did the AG think the parental-choice routing helped?

Because Mueller emphasized that "where, as here, aid to parochial schools is available only as a result of decisions of individual parents, no 'imprimatur of State approval' can be deemed to have been conferred on any particular religion, or on religion generally." The AG read the Idaho proposal as fitting that pattern: the state was not directly funding parochial schools; it was reducing parents' tax bills, and parents independently decided where to spend the saved money. Some parents would home-school. Some would pick private secular schools. Some would pick religious schools. The state's hand was attenuated.

What was Epeldi about and why was it the key Idaho case?

Epeldi v. Engelking (1971) addressed a state law requiring school districts to provide bus transportation to students attending private schools within district boundaries. The Idaho Supreme Court struck the law down because some of the private schools were religious or church-affiliated, and providing transportation to their students was a "government appropriation" in aid of a sectarian institution. The court emphasized that Idaho's Article 9, § 5 "more positively enunciates the separation between church and state than does the Constitution of the United States." Epeldi is the strongest Idaho authority for a strict reading of the no-aid clause. The AG distinguished Epeldi by noting that bus transportation flowed directly to the private school as an in-kind benefit; the proposed tax credit flowed to the parents based on a choice not to use public schools, which is a different connection.

Why did the AG flag the residency requirement as a Commerce Clause issue?

The proposal required the child to be an Idaho resident for 270 days of the tax year to qualify the parent for the credit. Two parents identical in every respect except length of Idaho residency would receive different tax treatment. The AG worried this might violate the dormant Commerce Clause's prohibition on state laws that discriminate against interstate commerce. The recommended fix was a partial or pro-rata credit for part-year residents.

What was the effective-date drafting issue?

The initiative would have appeared on the November 1996 ballot. The proposed effective date was January 1, 1996, which was before the vote. State tax forms for 1996 are printed before the November vote, so the Tax Commission would not know whether the initiative had passed when it printed the forms. Either the form would need explanatory language and a conditional credit (creating administrative burden) or the effective date would need to be changed to January 1, 1997. The AG recommended the latter as cleaner.

How does this opinion sit alongside the modern school-choice debates?

It does not directly map to today's debates. Espinoza (2020) and Carson (2022) are about whether the state can exclude religious schools from generally available aid programs (under the Free Exercise Clause). The 1995 Idaho proposal was about whether the state can include private and religious schools in a tax-credit program (under the Establishment Clause). The constitutional gravity has shifted significantly toward inclusive readings of state aid programs. But Idaho's Article 9, § 5 remains a separate state-law question that Idaho courts will resolve on Idaho-specific grounds.

Background and statutory framework

Idaho Code § 34-1809 requires the AG to issue advisory comments on initiative petitions. The AG's role is form, style, and substantive import; the recommendations are not binding.

In 1995, the U.S. Supreme Court's school-choice jurisprudence rested on Nyquist (struck down) and Mueller (upheld), with subsequent decisions like Witters v. Washington Department of Services for the Blind (1986) and Zobrest v. Catalina Foothills School District (1993) reinforcing the parental-choice routing principle. Mueller's emphasis on broad eligibility (all parents) and individual choice was the federal-law touchstone. Idaho's stricter Article 9, § 5 had been read in Epeldi v. Engelking (1971) to defeat even bus-transportation aid for private school students.

The proposed Idaho initiative would have inserted a $500 income tax credit per qualifying student into the Idaho income tax statutes. Implementation would interact with Idaho Code § 33-1403 (border school district tuition) and § 63-3029A (charitable-contribution credit for donations to educational institutions, both public and private). The drafting points the AG flagged would have required textual revision before the initiative was suitable for the ballot.

Citations

• Idaho Code §§ 33-1403, 34-1809, 63-3029A
• Internal Revenue Code § 151(c)(3)
• Committee for Public Education v. Nyquist, 413 U.S. 756 (1973)
• Mueller v. Allen, 463 U.S. 388 (1983)
• Widmar v. Vincent, 454 U.S. 263 (1981)
• Epeldi v. Engelking, 94 Idaho 390, 488 P.2d 860 (1971)
• Idaho AG Guideline (Feb. 7, 1995) on tuition tax credits

Source

• Landing page: https://www.ag.idaho.gov/office-resources/opinions/
• Original PDF: https://ag.idaho.gov/content/uploads/2018/04/C072495.pdf

Original opinion text

STATE OF IDAHO
OFFICE OF THE ATTORNEY GENERAL
Statehouse Room 117
Boise, Idaho 83720 0010

May 7, 1997

DATE:

TIME:

4:00p.m.

TO:Joan
FROM:

RE:

Bill von Tagen

PHONE:

1(208)334-4140

FAX:

1(208)334-2530

Certificate of Review - Initiative Entitled “Non-Public Education Enhancement Act

Number of pages including cover sheet: 7

NOTES:
Please call Keri Parks at 334-4155 if you do not receive all pages.

Notice: This message is intended only for the use of the individual or entity to which it is addressed
and may contain information that is privileged, confidential, and exempt from disclosure under applicable
law. If the reader of this notice is not the intended recipient or the employee or agent responsible for
delivering the message to the intended recipient, you are hereby notified that any dissemination,
distribution or copying of this communication is strictly prohibited. If you have received this
communication in error, please notify us immediately by telephone and return these papers to us at the
address shown above via first class mail.

July 24, 1995
The Honorable Pete T. Cenarrusa
Secretary of State
HAND DELIVERED
Re:

Certificate of Review;
Initiative Entitled “Non-Public Education Enhancement Act”

Dear Mr. Cenarrusa:
An initiative petition was filed with your office on June 26, 1995. Pursuant to
Idaho Code § 34-1809, this office has reviewed the petition and has prepared the
following advisory comments. It must be stressed that, given the strict statutory time
frame in which this office must respond and the complexity of the legal issues raised in
this petition, our review can only isolate areas of concern and cannot provide in-depth
analysis of each issue. Further, under the review statute, the Attorney General’s
recommendations are advisory only, and the petitioner is free to accept or reject them in
whole or in part.
BALLOT TITLE
When the initiative is filed, our office will prepare a short ballot title and a long
ballot title. The ballot titles should impartially and straightforwardly state the purpose of
the measure without being argumentative and without creating prejudice for or against
the measure. While our office prepares the titles, petitioner may submit proposed
language in keeping with the standards for ballot titles. If petitioner submits such
language, it will be considered by the Attorney General’s staff as it drafts the ballot titles.
MATTERS OF SUBSTANTIVE IMPORT
The proposed initiative provides a $500 state income tax credit to parents of
compulsory-education-aged children who do not attend public school. The stated
purpose for the initiative is “to encourage non-public education growth and to alleviate
the pressure and expense of overcrowded schools.” The initiative proposal would allow
parents of non-public school students between the ages of 7 and 16 to claim the credit for
any tax year in which the student did not attend an Idaho public school.
The Attorney General has previously addressed the questions of private school
tuition tax credits and voucher systems. The proposals that prompted those opinions
fundamentally differed from this initiative proposal which is a tax credit for non-use of

public schools. The issue of taxpayer support of private schools still remains and
therefore it will be addressed.
Although this initiative is distinguishable from previous efforts to support private
schools, similar constitutional concerns remain. If enacted into law, this proposal will
probably encourage some parents to remove their children from public school and enroll
their children in private parochial schools. Whenever it appears that tax dollars are being
used to support a religious institution, the proposal must be analyzed under the
Constitutions of both the United States and Idaho.
ANALYSIS UNDER THE U.S. CONSTITUTION
The United States Supreme Court, in Committee for Public Education v. Nyquist,
413 U.S. 756, 93 S. Ct. 2955, 37 L. Ed. 2d 948 (1973), declared certain tax benefits to
religious schools unconstitutional. In that case, taxpayers challenged a New York statute
which, among other things, granted benefits to parents of non-public school students.
The Court struck down the scheme, citing the Establishment Clause limitations that
require a state to neither advance nor inhibit religion.
Ten years later, in the case of Mueller v. Allen, 463 U.S. 388, 103 S. Ct. 3062, 77
L. Ed. 2d 721 (1983), the Supreme Court held that a Minnesota law providing a tax
deduction for tuition, school books, and school transportation expenses for both public
and private school students was constitutional. In comparing the Minnesota law to the
New York statute struck down in Nyquist, the Court drew several distinctions. First, the
tax deduction for tuition expenses was only one of many deductions available to
Minnesota taxpayers. The invalid statute in Nyquist was criticized by the Court as
“granting thinly disguised ‘tax benefits,’ actually amounting to tuition grants, to the
parents of children attending private schools.” Mueller, 103 S. Ct. at 3066. The initiative
proposal at hand would provide a tax credit to parents of Idaho’s non-public school
students. Such a credit differs from both the tax deduction allowed in Mueller and the
outright grant struck down in Nyquist. However, the Mueller Court expressed its
preference for a tax scheme based on a tax deduction rather than a tax credit.
The Mueller Court spoke approvingly of the availability of the tax deduction to all
parents of school-aged children. The Nyquist benefits were available only to parents of
non-public school children. The present initiative limits its benefits to parents of children
who do not attend public school, distinguishing it from the plan approved by the Court in
Mueller. It is, however, broader in its scope than the New York plan invalidated in
Nyquist, since, for example, the benefits under Idaho’s proposed initiative would be
available to parents of home-schooled children.

The Court also favored the Minnesota tax plan because it channeled any assistance
to parochial schools through individual parents, whereas in Nyquist, at least some of the
tax benefits were transmitted directly to parochial schools. The proposed initiative
provides a benefit directly to parents, similar to the Minnesota plan. The Court expressed
the importance of this distinction, saying, “Where, as here, aid to parochial schools is
available only as a result of decisions of individual parents no ‘imprimatur of State
approval’ can be deemed to have been conferred on any particular religion, or on religion
generally.” Mueller, 103 S. Ct. at 3069, citing Widmar v. Vincent, 454 U.S. 263, 102
S. Ct. 269, 70 L. Ed. 2d 440 (1981). The Court went on to say, “The historic purposes of
the [Establishment] clause simply do not encompass the sort of attenuated financial
benefit, ultimately controlled by the private choices of individual parents, that eventually
flows to parochial schools from the neutrally available tax benefit at issue in this case.”
Mueller, 103 S. Ct. at 3069.
The constitutionality of the proposed initiative under the First Amendment is a
debatable issue. However, the proposed initiative’s grant of the tax credit to parents of
all non-public school students—home-schooled, private non-sectarian, and private
parochial—coupled with the absence of a direct financial benefit to parochial schools,
makes it probable this proposal will be upheld under the U.S. Constitution.
ANALYSIS UNDER THE IDAHO CONSTITUTION
The Idaho Constitution, art. 9, § 5, states in part:
Neither the legislature nor any county, city, town, township, school district,
or other public corporation, shall ever make any appropriation, or pay from
any public fund or moneys whatever, anything in aid of any church or
sectarian or religious society, or for any sectarian or religious purpose, or to
help support or sustain any school, academy seminary, college, university,
or other literary or scientific institution, controlled by any church, sectarian
or religious denomination whatsoever; nor shall any grant or donation of
land, money or other personal property ever be made by the state, or any
such public corporation, to any church or for any sectarian or religious
purpose . . . .
In interpreting this article, the Idaho Supreme Court has held that Idaho’s
constitution more positively enunciates the separation between church and state than does
the Constitution of the United States. Epeldi v. Engelking, 94 Idaho 390, 488 P.2d 860
(1971). In Epeldi, the court decided a case involving a statute that mandated school
districts to provide transportation to students attending private schools within the
district’s boundaries. This was found to be a benefit to the private schools. The Supreme
Court found the statute in violation of art. 9, § 5 of the Idaho Constitution. The court

reasoned that, since some of the private schools benefiting from the law were religious or
church-affiliated schools, the provision of transportation for their students was a
government appropriation in aid of a sectarian institution and, thus, unconstitutional.
The Epeldi court established a simple test, drawn from the constitution itself, to
determine the validity of the statute. The court said:
The Idaho Constitution Article 9, section 5, requires this court to focus its
attention on the legislation involved to determine whether it is in “aid of
any church” and whether it is “to help support or sustain” any church
affiliated school.
94 Idaho at 395, 488 P.2d at 493.
The Attorney General has recently provided an opinion on the constitutionality of
tuition tax credits or vouchers. In a guideline issued to a state representative on February
7, 1995, the Office of the Attorney General opined that a tax credit for private school
tuition is, like the bus service in Epeldi, an unconstitutional appropriation in aid of a
sectarian institution. In arriving at that opinion, the Attorney General analyzed the tuition
tax credit plan under the Idaho Constitution and determined that the credit was most
likely a “grant or donation of . . . money” to a church-affiliated school, which is
specifically prohibited by art. 9, § 5 of the Idaho Constitution. 1995 Idaho Att’y Gen.
Ann. Rpt. —, —.
The initiative proposal under review here differs from a tax credit for private
school tuition, which, following the Attorney General’s previous analysis, violates the
Idaho Constitution.
It is also clearly distinguishable from the private school
transportation statute which was struck down in Epeldi. In those cases, the state aid to
the private school was more direct than the aid proposed by this initiative. If this
initiative were approved, it is theoretically possible (albeit unlikely) that no benefit
whatsoever will accrue to church affiliated schools. In Epeldi, the Supreme Court
determined that transportation was a benefit to the private school. In the case of a tuition
tax credit, only those parents who pay tuition may claim it. A tax credit for non-use of
public schools does not necessarily benefit parochial schools in the same way as the more
direct tuition tax credit or free bus transportation.
Presently, Idaho Code § 63-3029A offers an income tax credit for charitable
contributions to Idaho’s public or private non-profit institutions of elementary, secondary
or higher education. Presuming Idaho Code § 63-3029A is constitutional, it follows that
this proposed initiative is likewise constitutional. It can be logically argued that there is
little to distinguish between the benefits received by private schools under Idaho Code
§ 63-3029A and those under the proposed initiative.

The constitutionality of this proposed initiative under the Idaho Constitution is
also a debatable question. However, given that any benefit to parochial schools is
remote, it follows that the proposed credit may well pass constitutional muster. The
benefit under the proposed scheme flows to parents who choose not to educate their
children within Idaho’s public school system and not to the parochial schools. Neither
the purpose nor the effect of the proposed initiative appear to violate Idaho’s proscription
regarding aid to religious or sectarian schools.
ISSUES RELATING TO IDAHO’S INCOME TAX STATUTES
There are at least five tax-related issues which should be addressed by the drafters
of this initiative:
A.

Differential Treatment of Taxpayers

The initiative requires a student for whom the tax credit is received be a resident
of Idaho for 270 days of the taxable year. If a parent from another state moves into Idaho
during the summer and begins home schooling, that parent will be ineligible for the tax
credit. This residency distinction between taxpayers identical in all other respects may
violate the Commerce Clause of the U.S. Constitution. The drafters may wish to draft
language that would allow a partial or pro rata tax credit for part-year Idaho residents.
B.

Definition of “Qualified Dependent”

The proposed initiative incorporates the definition of “qualified dependent” from
Internal Revenue Code § 151(c)(3). That section of the Code does not define qualified
dependents, but refers to children who may be claimed as dependents. The drafters of
this initiative should clarify the definition of “qualified dependent.” The initiative should
also clearly state that only the taxpayer who is entitled to claim the dependent exemption
for the child may claim the tax credit for nonuse of public schools.
C.

Pupils Transferred to Neighboring States

Idaho Code § 33-1403 allows border school districts to transfer students to schools
in neighboring states. The cost of tuition for such a student is paid by the State of Idaho
and the school district involved. This initiative, as it is currently drafted, would permit
the parent of such a student to claim the tax credit even though the child has been
educated in a public school at the state’s expense. The drafters should remedy this
apparent inconsistency.

D.

Statutory Interpretation

The proposed initiative provides the tax credit for parents of students who do not
attend an Idaho public school. If a student attends a public school, even for part of a
school year or on a limited dual enrollment basis, then his or her parent will be precluded
from claiming the credit.
E.

Effective Date

The initiative will be presented to the voters in November 1996, which is after the
deadline date for printing of state tax forms. Since the Tax Commission will not know
whether the initiative has passed or failed, the tax form must include some explanatory
language and a conditional tax credit. This problem may be alleviated by changing the
effective date of the initiative from January 1, 1996, to January 1, 1997.
CONCLUSION
It is difficult to forecast where the United States Supreme Court will draw the line
between actions that constitute impermissible “aid” to religious institutions and those
which are permissible benefits to individual taxpayers. The Idaho Supreme Court also
has not clearly ruled on this question. The constitutionality of statutory provisions
involving questions of income tax relief which might be construed as having the effect of
aiding religious educational institutions is an extremely difficult issue. However, it
appears the proposed initiative may well pass constitutional muster. The petitioner is
advised to consider making the suggested statutory revisions in order to make the
proposed initiative compatible with Idaho’s statutory tax scheme.
I HEREBY CERTIFY that the enclosed measure has been reviewed for form,
style, and matters of substantive import and that the conclusions set forth above have
been communicated to the petitioner, John Slack, by deposit in the U.S. Mail of a copy of
this certificate of review.
Sincerely,
ALAN G. LANCE
Attorney General
Analysis by:
KIRBY D. NELSON
Deputy Attorney General