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LOUISVILLE, Ky. (WDRB) -- The Council for Better Education is challenging part of a new Kentucky law creating state tax credits for donors to groups that can help families living in the state's most populous counties pay for private school tuition.

The nonprofit organization contends in the lawsuit, filed Monday in Franklin Circuit Court, that that portion of House Bill 563 is unconstitutional in Kentucky because it sends public dollars to private schools through tax credits.

The state Constitution “demands that public funds be used to improve public schools in Kentucky and prohibits public money from being shifted to unaccountable private schools,” the Council for Better Education said in a news release announced the litigation.

“As our Supreme Court made clear in its landmark decision in Rose v. Council for Better Education, the General Assembly has an unyielding obligation to provide for and oversee an efficient system of common schools and cannot redirect public funds to private schools that serve a select few,” the nonprofit said in a news release. “The Constitution requires any programs that fund schools other than the common schools be approved by Kentucky voters.”

Boards of education for Frankfort Independent Schools and Warren County Public Schools recently voted to work with the Council for Better Education on the case and joined the Council for Better Education in the litigation alongside three individuals, the group said in a news release.

Lawmakers passed HB 563 and overrode Gov. Andy Beshear’s veto of the measure in this year’s legislative session.

The bill dedicates up to $25 million annually for five years toward tax credits for donors to organizations that award education opportunity accounts. Donors can recoup up to $1 million per year in state tax credits.

The flexible spending accounts can help students in counties with at least 90,000 residents pay tuition for private schools, which drew the ire of public education groups like the Kentucky Education Association.

Michael Bindas, senior attorney for the Institute for Justice, said his organization planned to file a motion to intervene in the case in the coming days in defense of Kentucky's new school choice law. The group, which has won 24 legal battles related to school choice including three at the U.S. Supreme Court, filed that motion on behalf of two northern Kentucky families Wednesday.

The group advocated for HB 563 in this year's legislative session and anticipated a legal challenge from "proponents of the status quo" in education, he said.

"This lawsuit is nothing more than an attempt to take away educational opportunity from Kentucky schoolchildren," Bindas said.

He called the case "baseless" and said he expected the new law would survive this legal challenge.

"We're confident that at the end of the day Kentucky schoolchildren will have access to the opportunity that the legislature wanted them to have," he said.

KEA President Eddie Campbell praised the lawsuit and said HB 563 would “steal away $125 million vital taxpayer dollars to give to private schools and unaccountable, unregulated, ‘education service providers.’”

“The General Assembly has tried to conceal HB 563’s constitutional defects by funding it through tax handouts to wealthy donors and allowing private management organizations — in exchange for a generous fee — to set up a publicly-funded education system that operates outside the common schools,” Campell said in a statement. “Bad legislation like HB563 is not policy taxpayers of Kentucky need from their legislature.”

Supporters of the new law have previously pointed to legal victories for similar programs in their belief the it would stand legal muster. The U.S. Supreme Court ruled 5-4 in June 2020 that the Montana Constitution wrongfully barred religious schools from receiving state aid in the form of scholarship tax credits. The Institute for Justice represented parents who sued in that case.

“Shameful delay tactics like this lawsuit only hurt the students who need the help the most,” EdChoice Kentucky said in a statement on Twitter. "Kentucky's superintendents should be spending their time and taxpayer dollars looking for every opportunity to put students first but instead some are engaging in a final act of desperation to protect the status quo."

"The only taxpayer dollar diversion happening here is this: some superintendents taking public dollars meant for education K-12 students and spending it on a lawsuit aimed at prevent students in need from getting the education opportunities they deserve," the group said, noting that other courts have maintained the constitutionality of similar programs.

Louisville-based law firm Wyatt, Tarrant & Combs is representing the Council for Better Education, whose legal challenge led to the landmark 1989 Kentucky Supreme Court ruling that ultimately ushered in the Kentucky Education Reform Act that overhauled the state’s public school system a year later.

The Kentucky Finance and Administration Cabinet and the Kentucky Department of Revenue are the only named defendants.

HB 563 also eases enrollment restrictions for students who want to attend districts outside of their residence areas. The Council for Better Education did not challenge that portion of the new law in its litigation.

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