Arizona Christian School Tuition Organization v. Winn

I. Arizona provides a dollar-for-dollar tax credit for contributions to school tuition organizations (STOs)

        ---tax credit of $500 per individual or $1000 per married couple
        ---these tax credits are very popular with an estimated total of $50 million per annum
        ---STOs are non-profits that use these contributions to fund scholarships for students attending private schools, many of which are religious
         ---Respondents sued as taxpayers who claim that the tax credit program violates the Establishment Clause

II. Taxpayer Standing: Do state taxpayers have Art. III standing to challenge a tax credit program such as Arizona's in federal courts?

A. General Rule--No taxpayers do not have standing to sue in federal court under Art. III's "case or controversy requirement" (Frothingham v. Mellon, 262 U.S. 447 (1923)

         ---no injury-in-fact: taxpayers economic injury was too "remote, fluctuating, and uncertain" to satisfy the case or controversy requirement

          ---moreover, taxpayers complaint is essentially nothing more than a generalized grievance, one "necessarily shared with millions of others"

          ---thus, held Frothingham, taxpayers did not present the Court with a "judicial controversy" but rather only a "matter of public ...concern" that should be pursued not through federal litigation but rather "through the political process."

Contrast:

A. Congress enacts a $200 million program providing diversity scholarships for minorities to attend college, Grumpy taxpayer (not a student excluded from the program, just a grumpy taxpayer) sues to enjoin the diversity scholarship program as a violation of the Equal Protection Clause. Result: No standing. Taxpayers do not suffer a concrete, redressable economic injury. Enjoining the program would not give Grumpy any benefit other than a generalized, ideological victory.

B. Congress enacts a $200 million program providing "theology scholarships" for full time clergymen to obtain advanced degrees in theology. Grumpy taxpayer sues to enjoin the program.

Should Example B be decided the same way as Example A (i.e., no taxpayer standing in either case, or taxpayer standing in both cases)?

III. Taxpayer Standing and the Establishment Clause

1. Flast v. Cohen provides a "narrow exception" to the general rule against taxpayer standing for federal taxpayers challenging a "congressional statute that allowed expenditures of federal funds from the General Treasury" to support religious schools. ("The concern of Madison and his supporters was quite clearly that religious liberty ultimately would be the victim if government could employ its taxing and spending powers to aid one religion over another or to aid religion in general. The Establishment Clause was designed as a specific bulwark against such potential abuses of governmental power, and that clause of the First Amendment operates as a specific constitutional limitation upon the exercise by Congress of the taxing and spending power conferred by Art. I, s 8."  Flast v. Cohen, 392 U.S. at 103-104.)

Art. I, section 8: "The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States."

Establishment Clause of the First Amendment: "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof."

2. Valley Forge Christian College case refused to extend the Flast exception to federal taxpayers challenging the grant of federal land (not tax dollars, but surplus land owned by the federal government). The Court denied taxpayer standing and explained (454 U.S. at 479-480):  

The plaintiffs in Flast satisfied this test because “[t]heir constitutional challenge [was] made to an exercise by Congress of its power under Art. I, § 8, to spend for the general welfare,” id., at 103, 88 S.Ct., at 1954, and because the Establishment Clause, on which plaintiffs' complaint rested, “operates as a specific constitutional limitation upon the exercise by Congress of the taxing and spending power conferred by Art. I, § 8,” id., at 104, 88 S.Ct., at 1954. The Court distinguished Frothingham v. Mellon, supra, on the ground that Mrs. Frothingham had relied, not on a specific limitation on the power to tax and spend, but on a more general claim based on the Due Process Clause. 392 U.S., at 105, 88 S.Ct., at 1955. Thus, the Court reaffirmed that the “case or controversy” aspect of standing is unsatisfied “where a taxpayer seeks to employ a federal court as a forum in which to air his generalized grievances about the conduct of government or the allocation of power in the Federal System.” Id., at 106, 88 S.Ct., at 1956.

Unlike the plaintiffs in Flast, respondents fail the first prong of the test for taxpayer standing. Their claim is deficient in two respects. First, the source of their complaint is not a congressional action, but a decision by HEW to transfer a parcel of federal property.^FN15 Flast limited taxpayer standing to challenges directed “only [at] exercises of congressional power.” Id., at 102, 88 S.Ct., at 1954. See Schlesinger v. Reservists Committee to Stop the War, 418 U.S., at 228, 94 S.Ct., at 2935 (denying standing because the taxpayer plaintiffs “did not challenge an enactment under Art. I, § 8, but rather the action of the Executive Branch”).

Second, and perhaps redundantly, the property transfer about which respondents complain was not an exercise of authority conferred by the Taxing and Spending Clause of Art. I, § 8. The authorizing legislation, the Federal Property and Administrative Services Act of 1949, was an evident exercise of Congress' power under the Property Clause, Art. IV, § 3, cl. 2. ^FN16 **763 Respondents do not dispute this conclusion, see Brief for Respondents Americans United et al. 10, and it is decisive of any claim of taxpayer standing under the Flast precedent.

3. In the Hein case, the Court denied taxpayer standing to taxpayers who brought an EC challenge against funds expending by the President as a matter of Executive discretion under general appropriations. ("The link between congressional action and constitutional violation that supported taxpayer standing in Flast is missing here. Respondents do not challenge any specific congressional action or appropriation; nor do they ask the Court to invalidate any congressional enactment or legislatively created program as unconstitutional. That is because the expenditures at issue here were not made pursuant to any Act of Congress. Rather, Congress provided general appropriations to the Executive Branch to fund its day-to-day activities.^FN4 These appropriations did not expressly authorize, direct, or even mention the expenditures of which respondents complain. Those expenditures resulted from executive discretion, not congressional action." 551 U.S. at 605).


IV. Taxpayer Challenges to State Expenditures


Does Flast even apply to taxpayer challenges brought against state tax expenditures appropriated by state legislatures? Even if the EC provides a specific structural limitation on the power of Congress to tax and spend under Art. I, section 8, how does that sturctural limitation of Congress get itself incorporated as an individual liberty interest under the doctrine of incorporation?