I'm a few months late in reporting this one, but as the matter has been proceeding at a snail's pace, it doesn't matter.
The case formerly known as Winn et al v Hibbs et al, now known as Winn et al v Garriott et al, a challenge to Arizona's dollar-for-dollar tax credit for donations to school tuition organizations (STOs), charities that pay some or all of multiple students' private school tuition fees, has taken quite the roundabout path through the courts. Back in 2004 it was before the (U.S.) Supreme Court, not (yet) to address the First Amendment concern, but rather to decide whether or not the Tax Injunction Act precludes Federal jurisdiction in the matter.
It was subsequently dismissed by the district court for failure to state a claim de novo, taken to the appeals court again, and has now been remanded to the district court. The Ninth Circuit panel ruled that the Zelman v Simmons-Harris decision does not preclude a First Amendment challenge to the STO scheme because the nature of the private choice involved is different than that of the programs upheld in Zelman.
Supposing that the district court, or the 9th Circuit again, or SCOTUS finds for the plaintiffs, the 9th circuit's remand order points the way to a solution: replace the STO scheme with an individual tax credit for anyone who pays any portion of a particular child's tuition fee. That would be a better solution, too, addressing the double-payments market failure per se.
I still doubt the bona fides of the First Amendment claim. The notion that a tax relief program with clear secular purpose and violates the Establishment Clause because donors receiving tax relief chose too often to donate to organizations with religious organizations is absurd. Establishment is an act of government, not of the people.
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