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(The Center Square) – Advocates for school choice in Kentucky suffered a defeat late last week when a judge ruled a new state law that establishes tax credits and educational grants was unconstitutional.

However, proponents of the measure said they will appeal the ruling, possibly straight to the state’s Supreme Court.

In his 30-page ruling, Franklin Circuit Judge Phillip Shepherd said the tax credit package the Kentucky General Assembly passed in House Bill 563 earlier this year would need approval from “the legal voters” to become legal.

State Sen. Ralph Alvarado, R-Winchester, told The Center Square school choice has broad support across the state, including rural and urban communities. Residents have been “begging” for such legislation for decades.

He believes Shepherd’s ruling will be overturned.

“The people have elected legislators who purposefully support this initiative, and a bill was legally passed in 2021,” said Alvarado, a longtime supporter of school choice programs. “Today’s judicial ruling is one lower judge’s opinion, who has been wrong on many occasions before.”

The program establishes $25 million in tax credits annually for five years. Individuals and companies that contribute to state-approved account-granting organizations (AGO) would be eligible for the credits.

In turn, the AGOs would award education opportunity accounts (EOA) to families meeting certain economic criteria. Families receiving the grants would be able to use them to pay for a number of school-related expenses. That includes tuition at out-of-district public schools and private school tuition in counties with populations exceeding 90,000.

The Council for Better Education, two school boards and a group of parents with children in public schools filed the lawsuit claiming the program would divert millions of tax dollars away from public schools that rely on that funding.

A message to the council was not immediately returned.

Attorney General Daniel Cameron’s office, as well as lawyers for groups supporting school choice and families seeking to take advantage of the program, argued before Shepherd last month that the program uses private contributions to fund the accounts.

Shepherd disagreed.

“The taxpayers who will fund this program will pay the money they already owe to the Commonwealth in income taxes to private AGOs, in lieu of paying their tax liability,” the judge wrote in his order. “In establishing this program, the legislature has essentially taken an account receivable to the Commonwealth of Kentucky, assigned it to these private AGOs, and forgiven the taxpayer’s liability to the state.”

In a statement to The Center Square, House Majority Whip Chad McCoy, R-Bardstown, said he and other supporters were disappointed by the ruling.

“The Education Opportunity Act and scholarship tax credits provide parents with the resources their children need to reach their full potential - regardless of where they live or how much money they make,” said McCoy, the bill’s primary sponsor. “Today’s ruling seems to ignore the very fact that HB 563 would pour more money into education, particularly as children across the state are struggling with the impact of pandemic learning and have fallen further behind.”

Andrew Vandiver, president of EdChoice Kentucky, said in a statement that Friday’s decision goes against others made in courts across the nation, including the U.S. Supreme Court. However, he said proponents remain undeterred.

“EdChoice Kentucky and our partners will keep fighting to give Kentucky parents the resources they need to move their students to the head of the class,” he said.

Shepherd also found that the limitation on private schools was unconstitutional. Only residents in nine of Kentucky’s 120 counties would have been eligible for that program.

Yet, Shepherd noted that some smaller counties like Nelson County (46,738, per the U.S. Census Bureau) had more private schools than neighboring Hardin County (110,702). He found the law’s language “arbitrary and discriminatory” against the smaller counties.

“There is simply no rational basis to exclude counties like Franklin County, Nelson County, and many others with a strong existing base of private schools from the tuition assistance program,” he wrote.

Ben Field, an attorney for the Institute for Justice, told The Center Square he disagreed not only with Shepherd’s interpretation of the private school language tied to county population but also with the judge’s ruling in general on that provision.

The institute, a law firm that represents clients in cases involving school choice, property rights, free speech and economic liberty, represents families who would benefit from the law.

“If there is a problem with the population restriction, Kentucky statute is very clear that courts should be surgical in removing only the narrow offending provision,” Field said. “And so the correct solution was to make educational choice available to all Kentucky families rather than to strip it from all of them.”

Field said they plan to quickly appeal the matter and will work in conjunction with Cameron’s office in planning that. Taking the matter directly to the state Supreme Court could help make the program available for the 2022-23 school year.

A spokesperson for Cameron’s office told The Center Square they are reviewing the ruling.

This article originally ran on thecentersquare.com.

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