ESAs blocked, but only for right now

Although the Nevada Supreme Court on Thursday blocked the Education Savings Account program from going into effect immediately, it’s still alive and well.

The court swept away the fundamental questions about the constitutionality of the program, which allows parents to use state education funds deposited into individual accounts for everything from private school tuition to books or tutoring.

Only the method of funding the program was found to be unconstitutional; once the Nevada Legislature fixes that, ESAs will move forward unshadowed by legal questions.

While we’re waiting, let’s take note of a few provisions in the ruling.

First, the idea that ESAs will allow state education funds to flow to private, religious schools, despite a constitutional provision that says “no public funds of any kind or character whatever, state, county or municipal, shall be used for sectarian purpose.”

Back in 2015, I wrote this language meant that ESAs — at the very least — could not be used at religious schools. I reasoned that because the money in question was appropriated by the Legislature for educational purposes, put into state-maintained accounts, subject to spending requirements, and returned to state coffers if an account closed, it was “public funds” and constitutionally ineligible for use at religious schools.

I said in that column that “to argue ESA money magically becomes private money requires an active indifference to the facts.”

But the Nevada Supreme Court overturned me.

“Once the public funds are deposited into an education savings account, the funds are no longer ‘public funds’ but instead the private funds of the individual parent who established the account,” the majority wrote. “The parent decides where to spend that money for the child’s education and may choose from a variety of participating entities, including religious and non-religious schools. Any decision by the parent to use the funds in his or her account to pay tuition at a religious school does not involve the use of ‘public funds’ and thus does not implicate Section 10 [of the Nevada Constitution].”

So, according to the Nevada Supreme Court, the money is “public” when the Legislature appropriates it, transubstantiates into private funds once deposited into an ESA, and then transforms back into public funds once the account is closed? That seems … odd, at least. (Of course, I recognize Marbury v. Madison, that it’s “emphatically the province and duty of the judicial department to say what the law is,” and I yield to the court.)

Second, the court ruled that creating an ESA program doesn’t undermine the state’s duty to maintain a system of public schools. “We conclude that as long as the Legislature maintains a uniform public school system, open and available to all students, the constitutional mandate … is satisfied, and the Legislature may encourage other suitable educational measures under Section 1 [of Article 11 of the state constitution].”

Third, the ruling establishes a brand-new “public-importance” exception to the rules governing who may file lawsuits alleging particular legislative spending bills are unconstitutional. Usually, a private citizen would have to show he or she is personally injured before filing a lawsuit claiming that a certain program is unconstitutional. But now, the court says, that requirement is waived if the underlying issue is of public importance, if the lawsuit alleges a spending bill is unconstitutional and if the private citizen is the best person to litigate the case.

That’s a significant change.

And while this case may be remembered as the one that ultimately upheld the constitutionality of most of the ESA program, it will likely be cited in the years to come more for the standing doctrine change.

Steve Sebelius is a Review-Journal political columnist. Follow him on Twitter (@SteveSebelius) or reach him at 702-387-5276 or SSebelius@reviewjournal.com.