Would an Education Scholarship Account law be found constitutional in South Carolina?

February 9, 2023

Oran P. Smith, Ph.D

Senior Fellow

With not one, but two education choice bills moving in South Carolina, it is time for some straight talk about the likelihood of education choice legislation being found unconstitutional if passed by the General Assembly and signed by Governor McMaster.

But in order to arrive at an answer to that fundamental question, we must first understand the diversity of school choice in the 65 programs in America that offer private educational options using public funds or public mechanisms. Though the media delights in calling all education choice programs “vouchers!,” there are actually four general categories of private education choice programs in America. These are vouchers, tax credit scholarships, formula-funded Education Scholarship Accounts, and tax credit-funded Education Savings Accounts. Each has a slightly different path to constitutionality.

For states without “no aid” or “Blaine” amendments in their constitutions, all four are normally constitutional unless there is some other constitutional impediment besides a Blaine Amendment.

For states with Blaines, like South Carolina, the question is more complicated.

Vouchers? A voucher program, where parents pay for private school tuition with a coupon that is redeemable with the state for real money, would present a problem. The South Carolina Blaine Amendment prevents direct aid to religious or private schools. A voucher program would likely be seen by a court as just a front for assisting private (independent) schools.

Tax Credit Scholarships? It would be highly unlikely for a tax credit-funded scholarship program or a tax credit-funded Education Scholarship Account program to be overturned. The legal understanding is that when a person diverts his or her existing state tax liability to scholarships rather than remitting those funds to the state treasury, those funds never become state funds. So, Blaine strictures would not apply.

Education Scholarship Accounts? ESA programs are often funded by dollars that would otherwise have gone to a child in his or her public school based on a formula. These programs have been found constitutional as well. They have withstood challenges in Blaine states precisely because of their legal differences from vouchers. Arizona, home of the nation’s oldest ESA program, provides the framework. According to the Institute for Justice (IJ), which successfully defended Arizona’s ESA program in state court and also won the recent Espinoza school choice victory before the U.S. Supreme Court, the key is to read Arizona’s Cain v. Horne in light of Niehaus v. Huppenthal:

In Cain v. Horne, the Arizona Supreme Court said vouchers were not constitutional and struck down two programs because parents had no choices other than private schools. Put another way, parents in the voucher program had no options other than to endorse a state check over to a private school.

But in Niehaus v. Huppenthal, the Arizona Court of Appeals found that the Empowerment Scholarship Account (ESA) program provided parents with ample choices as to where and how to spend their money. The Empowerment Scholarship Account program clearly transfers state funds to parents, empowering them to choose from a wide variety of educational services, including tutoring, therapy, and other options outside of private or religious school tuition.

In 2020, Adams v. McMaster overturned South Carolina’s COVID-recovery SAFE Grants tuition grant program. The South Carolina Supreme Court followed Cain v. Horne but did not make the next logical step to Niehaus v. Huppenthal possibly because there were no other options in the SAFE Grants program besides private (independent) school tuition.

The ESA bill currently before the South Carolina legislature was drafted after the Adams decision, avoiding the narrow set of facts in play in the federally-funded SAFE Grants program, and following Arizona’s clear and successful roadmap to a constitutionally-sound program: a variety of educational options for parents to spend dollars allocated to them.

Epilogue: State Blaine Amendments have taken it hard on the chin in three rulings of the Supreme Court of the United States in recent years. The high court sees state Blaines as born in bigotry and in play for being held unconstitutional. Whether that hammer actually falls or not, the State of South Carolina could use the breadcrumbs provided by SCOTUS, Arizona, and our own legal and constitutional history to craft a bill that would withstand court scrutiny on Blaine constitutionality.

A bill in the South Carolina House would repeal the entire state Blaine Amendment. This would require voter approval. Such a move would fully remove the nonsensical argument that state aid to students in our 4K and higher education programs is “indirect” as required by the Constitution, but somehow an identically-structured K-12 program would be unconstitutionally “direct.” Repeal would eliminate this manufactured confusion to be sure, but would not be necessary as an antecedent for standing up a robust ESA and/or tax credit scholarship program in the Palmetto State.