The Supreme Court appeared closely divided Wednesday about an Arizona tax-break program that provides millions of dollars in scholarships for students at private religious schools.
The conservative justices indicated they are likely to rule against a challenge to the Arizona program that says it amounts to an unconstitutional state endorsement of religion. The court's liberals suggested they have problems with the state's tax credit.
Justice Anthony Kennedy, often the decisive vote in ideologically divided cases, asked questions of both sides that did not tip his hand.
The Obama administration joined with the state in arguing in strong defense of the program, saying the Arizona residents who oppose it should not even be allowed to bring their lawsuit in federal court.
For the past 13 years, Arizona has allowed residents to send up to $500 to a tuition scholarship organization that they would have otherwise paid the state in taxes on their incomes.
The problem, in the view of the American Civil Liberties Union-backed challenge to the program, is that most of the money goes to groups that award scholarships on the basis of religion and require children to enroll in religious schools.
Paul Bender, the lawyer who argued for Arizona residents opposed to the program, said there is a big difference between the Arizona scheme and voucher programs that the Supreme Court has upheld.
"In giving parents a voucher, nobody said to the parents, 'What's your religion?'" Bender said.
But Chief Justice John Roberts and Justices Samuel Alito and Antonin Scalia voiced varying degrees of support for the Arizona program.
Roberts said many of the scholarship organizations are secular and that the "state doesn't care" which group taxpayers select.
Alito and Scalia said they see little difference between the tax credits in Arizona and a more typical donation that a taxpayer can make to any charity, religious or otherwise, and then deduct from income taxes.
Scalia said that the import of the case was no more than where the state put the scholarship donation on its income tax form. "This is a major lawsuit?" he said.
But Bender said the distinction between a charitable donation and the Arizona program is crucial. Charity costs the donor something, even if the government subsidizes the cost through a tax deduction, he said.
The Arizona program takes money that would otherwise go into the state's treasury and allows it to be redirected to a scholarship organization, Bender said. "It won't cost you anything," he said.
Acting Solicitor General Neal Katyal, the administration's top Supreme Court lawyer, told the justices that the challenge should be dismissed because the residents who filed the lawsuit do not send money to the religious organizations.
"Not a cent, not a fraction of a cent" of the challengers' money goes to fund religion," Katyal said. Justice Elena Kagan, who was Katyal's supervisor before she joined the court in August, was one of several liberal justices who took issue with Katyal's assertion. Kagan called it "silly."
But the court in recent years has cut back on the ability of taxpayers to file lawsuits in the area of government involvement with religion.
A decision should come before the summer.
The consolidated cases are Arizona Christian School Tuition Organization v. Winn, 09-987, and Garriott v. Winn, 09-991.