- Associated Press - Thursday, November 5, 2015

HELENA, Mont. (AP) - Public-school advocates argued Thursday that a state agency correctly determined the Montana Constitution prohibits private religious schools from participating in a new scholarship tax credit program, while private-school supporters said the Department of Revenue overstepped its bounds.

The department held a public hearing on the proposed rules on how to implement a new law that will allow tax credits for donations of up to $150 a year to scholarships to private schools or to innovative educational programs in public schools. The annual limit is $3 million.

The draft rules excluded religious schools from the program, a surprise for many of the program’s supporters who had tracked the bill through the state Legislature earlier this year.

Revenue department officials said the exclusion was written to follow the Montana Constitution’s provisions that prohibit direct or indirect appropriations to religious organizations.

Scholarship tax credit programs are an alternative to school voucher programs, and 15 states as of last year had some version of the tax credits, according to the National Conference of State Legislatures.

Nine people, including legislators and representatives of religious organizations and schools, spoke against the proposed Montana rules, saying it takes school choice away from parents. They said the Legislature intended the tax credit to benefit all students and the department was acting as a court in deciding unilaterally what is constitutional and what is not.

The bill’s sponsor, Sen. Llew Jones, R-Conrad, also panned the proposed rules as an unauthorized rewrite of his legislation. “If the bill says the sky is pink, the rules need to say that they sky is pink,” Jones said.

Eric Feaver of the teachers’ unions MEA-MFT responded that the bill itself states the administration of the tax-credit program must comply with the sections of the Montana Constitution that restrict appropriations for sectarian purposes. “The bill says the sky is blue, not pink,” Feaver said.

Four others spoke in favor of the Department of Revenue’s changes, most representing public school associations.

Opponents of the changes argued that the tax credits are not an appropriation, but the transfer of private money to a private scholarship organization.

Both sides acknowledged the issue is likely to go to court, and an attorney for one pro-school choice institute pledged to sue if the rules stand as they are currently written.

“The rule is hostile to religion,” said Erica Smith, attorney for the Arlington, Virginia-based Institute for Justice.

There are more than 145,000 students in public schools and an estimated 7,200 in private schools in Montana.

Jones has previously said the religious exclusion would prevent about 60 percent of private schoolchildren from receiving benefits from the tax-credit program.

Revenue Director Mike Kadas said the public comment period on the draft rules ends on Nov. 17, and he planned to have the final rules prepared by mid-December.

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