Tax subsidies vs. non-tax subsidies

Thu Dec 23 12:21:24 PST 2004

It seems to me that this brings up the old question of the extent to
which tax exemptions are effectively subsidies.  The Court has generally
held that they are, see, e.g., Texas Monthly v. Bullock
(religion-preferential tax exemption violates the Establishment Clause);
Bob Jones Univ. v. U.S. (the government has a compelling interest in not
subsidizing discrimination, which justifies denying tax exemption to a
racially discriminatory schools); Taxation With Representation v. Regan
(special tax exemption for veteran's groups that lets them, but not
other tax-exempt groups, lobby is permissible under the Free Speech
Clause because it's just a subsidy to those groups).  Economists
likewise tell us that they are.

If this is so, then it seems to me that either (1) religious
institutions *must* be denied tax exemptions under the Establishment
Clause, because they are legally allowed to discriminate based on
religion and because they often do so discriminate, or (2) religious
institutions *need not* be denied the ability to participate in
generally available aid programs (at least ones in which the money is
distributed based on objective criteria) even if they discriminate,
since those programs are just like tax exemptions.  (This intentionally
doesn't speak to whether the First Amendment *requires* that religiously
discriminatory organizations be included in the programs, only to
whether it *forbids* such inclusion.)

Now perhaps, as Marty suggests, the answer is indeed different when the
aid program (unlike exemption programs) is administered pursuant to
subjective criteria rather than objective ones.  But if the government
pays for the cost of all school bus service, lets schools hire their own
drivers, and doesn't object when religious schools hire based on
religion, then it strikes me as quite similar to the government giving a
tax exemption to all donors to charitable causes, and doesn't object
when religious recipients of the donations hire based on religion.

Eugene

-----Original Message-----
From: religionlaw-bounces at lists.ucla.edu
[mailto:religionlaw-bounces at lists.ucla.edu] On Behalf Of Marty Lederman
Sent: Thursday, December 23, 2004 12:03 PM
To: Law & Religion issues for Law Academics
Subject: Re: charitable choice hypothetical

	A complicated question, I think, Alan.  I assume, in your hypo,
that the state is simply paying for the cost of bus service, right? --
not actually providing the service through the auspices of a state-run
transporation outfit.  Because if the bus driver were actually an
employee of the state, obviously the state could not limit its
employment decisions to persons of a particular religion.  See Torcaso;
McDaniel; article VI, etc.  Nor could the state cede the power to
religious institutions to cabin the state's own choices of whom to
employ (Larkin).

	So let's assume a program of direct payment to private schools
for the costs of providing bus service.  Under current doctrine (which
might not be for long for this world), the dollars could not be expended
on "specifically" religious activity, such as proselytizing, bible
studies or prayer.  (Bowen v. Kendrick; Tilton; SOC's opinion in Michell
v. Helms.)  The question, then, would be why such dollars could be used
for discriminatory hiring practices -- i.e., why coreligionist hiring is
constitutionally distinct in this cotext from prayer, bible studies,
etc., even though the Religion Clause would prohibit the state itself
from engaging in both forms of activity "directly."  But in order to
answer that question, one would need a fuller, richer account of why
direct aid provided to all schools (e.g., on a per capita basis) cannot
be used for certain religious activity.  Unfortunately, all we know, as
of now, is that according to Justice O'Connor, "the most important
reason for according special treatment to direct money grants is that
this form of aid falls precariously close to the original object of the
Establishment Clause's prohibition."  Not much to go on in that cryptic
statement.  

	I would note, however, that on the Burger Court, even the
anti-separationist Justices thought there was a serious problem in
providing funds to schools that discriminate on the basis of religion.
In his dissent in Lemon, for instance, Justice White acknowledged that
an aid program (e.g., for teacher salaries) would be unconstitutional to
the extent there were evidence that the recipient schools restricted
entry on racial or religious grounds, or required all students to
receive instruction in the tenets of a particular faith.  403 U.S. at
671 n.2.  The Court cited with apparent favor to this footnote in
Norwood, 413 U.S. at 464 n.7.  I suppose one could argue that
discriminating against students is more problematic than discriminating
against employees, because students are the "ultimate" beneficiaries of
the aid program. But then again, it's the employees, not the students,
who actually receive the government dollars. 

	The basic question, I suppose, is whether the government
violates the Constitution by giving money to an entity knowing that the
state moneys will be used to engage in a form of discrimination that
would be forbidden to the state itself.  I don't know that there is a
single answer to that question.  In my view, however, the constitutional
problem is most pronounced where the government aid is discretionary and
selective, and distributed on the basis of highly subjective criteria,
because in such a case, it's much more tenable to conclude that the
government's choice of a discriminating recipient over a
nondiscriminating recipient evidences at least a modicum of government
"endorsement" of the discrimination.  That is to say, the government is
more (constitutionally) responsible for what happens with its funding
when in the first instance it must make discretionary choices of who
should receive that funding.  By contrast, I think the constitutional
concern is less pronounced where the aid is awarded on the basis of
objective criteria, or on a per capita basis.  But cf. O'Connor's
opinion in Mitchell.

	Is that at all responsive?

	----- Original Message ----- 
	From: "A.E. Brownstein" <aebrownstein at ucdavis.edu
<mailto:aebrownstein at ucdavis.edu> >
	To: "Law & Religion issues for Law Academics"
<religionlaw at lists.ucla.edu <mailto:religionlaw at lists.ucla.edu> >
	Sent: Thursday, December 23, 2004 2:24 PM
	Subject: charitable choice hypothetical

	> In reading arguments defending charitable choice provisions
that permit 
	> religious non-governmental providers to discriminate on the
basis of 
	> religion in hiring employees to staff government funded
programs serving 
	> public purposes -- even if the program is entirely supported
by government 
	> funds and is subject to various government regulations and
conditions, I 
	> began to think about the reach of these arguments.
	> 
	> Proponents of discriminatory hiring argue:
	> 
	> 1. This is an accommodation of the religious liberty interest
of religious 
	> individuals to work together with co-religionists.
	> 
	> 2. The accommodation serves the legitimate secular purpose of
permitting 
	> co-religionists to work together.
	> 
	> 3. The accommodation does not impermissibly advance religion.
The reason 
	> religion is not impermissibly advanced is, in part, because
	> 
	> a. The discrimination is not invidious and the persons denied
job 
	> opportunities are not stigmatized by their exclusion from
these job 
	> opportunities.
	> 
	> b. The religious liberty of persons denied employment because
of their 
	> religious beliefs is not burdened by being denied tax payer
funded, public 
	> purpose employment opportunities.
	> 
	> Obviously, I strongly disagree with most of these arguments.
But my 
	> question is this. Suppose a state provides free school bus
service to 
	> students attending both private and public schools. May the
state allow 
	> religious private schools to select the bus driver
transporting their 
	> students to the school and insist that the driver must be of
the same faith 
	> as the school's teachers and administrators -- and may the
state grant such 
	> requests as an accommodation? (Or alternatively, when public
school 
	> teachers are assigned to provide remedial services to students
at a 
	> religious school, may religious schools be granted the
accommodation of 
	> choosing teachers of a particular faith to be assigned to
those duties.)
	> 
	> Wouldn't all of the above arguments apply to these situation?
The religious 
	> discrimination would be an accommodation of religious
individuals desire to 
	> work with co-religionists. (And., of course, the state can
take religion 
	> into account in accommodating religion.) The accommodation
would serve a 
	> secular purpose and not impermissibly advance religion for all
of the 
	> reasons argued above.
	> 
	> If there is an Establishment Clause problem with these
hypothetical 
	> accommodations, what is it? It can't be that public resources
(here labor 
	> instead of capital) are placed under the control of religious
institutions 
	> which practice religious discrimination in using those
resources -- because 
	> that is what charitable choice does.
	> 
	> Alan Brownstein
	> UC Davis
	> 
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