Moms in Montana are suing the State Department of Revenue over newly established rules that prohibit parents from using tax credit scholarships to attend religious private schools.

Lawyers from the Institute for Justice, representing Kendra Espinoza, Jeri Anderson and Jaime Schaefer, argue in a complaint filed this week that the rules violate the moms' constitutional rights to freedom of religion and equal opportunity.

“The rule also violates both the state and federal Constitutions because it allows scholarship recipients to attend any private school except religious ones,” Erica Smith, an attorney with the institute, said in a press release. “That’s discrimination against religion."

The complaint comes as the Treasure State implements a new school choice law passed earlier this year. Its attack on prohibitions to the use of scholarships at religious schools echoes recent appeals to the U.S. Supreme Court by religious schools and their supporters — cases in which the institute is also involved.

Montana's program offers corporate and individual donors a tax credit worth up to $150 for donations to scholarship organizations. The program is capped at $3 million in tax credits per year.

The state Department of Revenue finalized rules for the tax credit scholarship program earlier this week, that make religious private schools ineligible to accept the scholarships. The department claims allowing parents to use the scholarships at religious schools would violate of the state constitution.

During public comments back in November, the Department repeatedly told school choice supporters criticizing the proposed rules that it had the power to "require the exclusion of such direct or indirect monetary benefits as targeted tax credits."

Mike Kadas, Director of Montana Department of Revenue. Source: MTDOR

The so-called Blaine Amendment in Montana's constitution does prohibit "direct or indirect appropriations" to religious organizations, but no court has ever ruled that a tax deduction, tax exemption or even a tax credit is an actual appropriation.

Critics, including Llew Jones (R-Conrad), the primary sponsor of the bill creating the program, charge the department's interpretation oversteps its constitutional authority. (more…)