Kentucky Supreme Court hears issue of private school tax credit funding

LOUISVILLE, Ky. (WDRB) -- Tax credits to help fund private schools went before Kentucky's Supreme Court on Wednesday in Shelbyville.

"It is an appropriation, it is a wolf in sheep's clothing to say this isn't an appropriation, it's a total ignoring of the facts," Chief Justice John D. Minton Jr. said.

Supporters of House Bill 563 barely started their presentation when justices started questioning the way the program would work.

The law allows tax credits in return for donations to education opportunity accounts, that can be used to fund private school for families in the state's larger counties who can't afford tuition.

The state set aside $125 million over five years for the credits. Public school districts are fighting to block the funding, saying it's a back door way for public dollars to fund private education.

The credit is nearly a dollar for dollar match for donors up to a million dollars.

Justices questioned whether it's more of an appropriation than a tax credit and whether it would work more like a tax refund than a traditional credit.

"Section 16 of HB 563 expressively says the credit is non-refunded, so if a taxpayer then receives a refund, that is not an appropriation," Benjamin Field, an attorney at the Institute for Justice, said.

Justices will issues their decision on a later date. The proceedings on Wednesday occurred in Shelbyville in front of a large crowd.

Every year, the state's highest court takes a hearing outside the normal Frankfort setting as a way for the public to see and better understand how the court works.