Tuition tax credit case: high court to set vital precedent

Once again the ''establishment of religion'' clause of the First Amendment of the US Constitution is on the line. Some observers say the outcome of a tuition tax deduction case now before the nation's Supreme Court could: (1) determine the fate in Congress of President Reagan's proposed legislation providing tuition tax credits to parents of children attending private or parochial schools; (2) set a precedent and guidelines for states seeking to draft laws setting up tax credit plans; (3) encourage or discourage ballot initiatives across the United States that support public funds for private education.

In Mueller v. Allen, the high court must decide whether to strike down a Minnesota law that grants tax deductions for tuition paid to parochial schools. If the Supreme Court overturns the law, it would reverse a decision of the US Court of Appeals, Eighth Circuit. But it would also reaffirm a host of previous Supreme Court decisions that have held that tax deductions for tuition payments to parochial elementary schools violate the establishment clause of the First Amendment.

The First Amendment provides: ''Congress shall make no law respecting the establishment of religion or prohibiting the free exercise thereof.''

The Minnesota plan grants tax deductions of up to $700 for educational expenses at private or public elementary and secondary schools. Approximately 86 ,000 taypayers now claim an average deduction of $371 per year. Because public schools charge no tuition and have few fees, an estimated 95 percent of those who claim deductions send their children to parochial schools.

Those who vigorously support the legal principle of separation of church and state point out that case law has held that the due process clause of the 14th Amendment makes the religious clauses of the First Amendment binding on the states.

The main supporter of the Minnesota law is the Roman Catholic Church. Those who want the law struck down include teacher groups, Americans United for Separation of Church and State, and various Jewish and Protestant religious organizations.

In a friend-of-the-court brief, the United States Catholic Conference (USCC) holds that ''a reversal of the decision of the Court of Appeals (which upheld the Minnesota law two years ago) would adversely affect parents of school-age children, Catholic as well as others, by increasing their tax burdens.''

USCC general counsel Wilfred R. Caron says that the establishment clause ''does not explicitly prevent a state from allowing an income tax deduction'' for educational expenses incurred by the parents of children attending public and private schools because some of the children attend religious or church-related schools.

The USCC brief adds that the framers of the Constitution ''did not explicitly or impliedly classify aid to churches or religious groups as inherently objectionable.'' And it adds that the Minnesota law doesn't violate the establishment clause, because it doesn't constitute establishing a religion - and therefore is not a threat to anyone's religious liberty.

On the other hand, a friend-of-the-court brief filed by the Baptist Joint Committee on Public Affairs (BJCPA) - a denominational umbrella group - views the Minnesota law as a clear violation of the First Amendment.

A current issue of BJCPA's newsletter offers this analysis: ''When public funds, which are collected from all taxpayers regardless of religious belief or lack of religious belief, are used to aid, either directly or indirectly, elementary or secondary schools which teach religion, all taypayers are compelled to assist in the support of that teaching of religion.

''State-coerced financial support of religion is one of the oldest and purest forms of the establishment of religion and is clearly at odds with the establishment clause of the First Amendment,'' the BJCPA concludes.

Lee Boothby, general counsel for Americans United for the Separation of Church and State, warns that if the court approves such aid, it ''would undermine the character and independence of religious schools, open the public treasury to further demands of pervasively sectarian institutions (and) spawn a whole new generation of 'parochiaid' litigation.''

According to the American Bar Association, Mueller v. Allen is only one of two cases in recent years where lower federal courts have held state tuition tax deduction statutes to be constitutional.