Appeal from Circuit Court of Sangamon County No. 99MR413 Honorable Thomas R. Appleton, Judge Presiding.
The opinion of the court was delivered by: Justice Garman
Plaintiffs filed a complaint in the Sangamon County circuit court, alleging that section 201(m) of the Illinois Income Tax Act (Tax Code) (35 ILCS 5/201(m) (West Supp. 1999)) is unconstitutional, in that it violates section 3 of article I (Ill. Const. 1970, art. I, §3), section 3 of article X (Ill. Const. 1970, art. X, §3), section 1(a) of article VIII (Ill. Const. 1970, art. VIII, §1(a)), and section 2 of article IX (Ill. Const. 1970, art. IX, §2) of the Illinois Constitution of 1970 (Illinois Constitution). The trial court granted defendants' motion to dismiss (735 ILCS 5/2-615 (West 1998)), and plaintiffs appeal. We affirm.
Section 201(m) of the Tax Code allows, beginning with tax years ending after December 31, 1999, a credit (hereinafter Credit) of up to $500 against income tax liability equal to 25% of qualified education expenses incurred on behalf of qualifying pupils. The term "qualifying pupils" means individuals who (1) are Illinois residents, (2) are under the age of 21 years at the close of the school year for which a credit is sought, and (3) were full-time pupils enrolled in a kindergarten through twelfth-grade education program at any public or nonpublic school that is in compliance with Title VII of the Civil Rights Act of 1964 (42 U.S.C. §2000e et seq. (1994)) and attendance at which satisfies the requirements of section 26-1 of the School Code (105 ILCS 5/26-1 (West 1998)). "Qualified education expense" is defined as an amount incurred on behalf of a qualifying pupil in excess of $250 for tuition, book fees, and lab fees at the school in which the pupil is enrolled. 35 ILCS 5/201(m) (West Supp. 1999).
Plaintiffs filed their complaint for declaratory relief in November 1999. In attacking the statute's constitutionality, plaintiffs alleged that (1) few, if any, taxpayers whose children attend Illinois public schools will receive any benefit from the Credit, because (a) public schools do not charge tuition to pupils who reside in the school district in which the school is located; (b) public schools do not charge book or lab fees in excess of $250 per year per pupil; (c) although tuition is charged for pupils who attend a school not in the district where they live, that number is small; and (d) according to the Illinois State Board of Education (Board), during the 1998-99 school year, less than 1% of the 2 million students enrolled in public schools attended schools outside their home district; (2) the Credit discriminates against low-income parents because they earn insufficient income to claim the Credit; (3) since the Credit allows money that would otherwise be paid to the State in income taxes to be used to pay private school expenses, it will reduce the State's annual revenue and is the practical equivalent of a legislative appropriation; (4) virtually all the money that will be diverted from the State treasury as a result of the Credit will be expended at private schools, the vast majority of which are sectarian; (5) the Credit requires plaintiffs to support a ministry or place of worship against their consent and a preference is given by law to a religious denomination or mode of worship, in violation of section 3 of article I of the Illinois Constitution; (6) the diversion of State revenue resulting from the Credit constitutes an appropriation or payment from a public fund and a grant or donation of money made by the State to help support sectarian private schools and for other sectarian purposes, in violation of section 3 of article X of the Illinois Constitution; (7) because religious education and activities are not "public purposes," the Credit violates the requirement in section 1(a) of article VIII of the Illinois Constitution that public funds shall be used only for public purposes; and (8) a distinction exists between low-income and high-income taxpayers as to who will be able to take full advantage of the Credit, and since this distinction bears no reasonable relationship to the Credit's stated objective, it violates section 2 of article IX of the Illinois Constitution.
The trial court allowed a group of parents to intervene as defendants. Intervenors and defendants filed separate motions to dismiss the complaint. Plaintiffs filed a motion for summary judgment.
In April 2000, the trial court entered a written order dismissing plaintiffs' complaint and denying plaintiffs' motion for summary judgment. The court found that (1) money accruing from the Credit did not constitute public money or an expenditure of public money, (2) the Credit did not constitute an unreasonable tax classification, and (3) the Credit did not provide support for sectarian schools. The court noted that money is not public until it belongs to the State and the fact that a State allows individual taxpayers to keep more of their own money does not make it the State's money. Thus, no one was required to support religion. The trial court also found the United States Supreme Court's decision in Mueller v. Allen, 463 U.S. 388, 77 L. Ed. 2d 721, 103 S. Ct. 3062 (1983), controlling. Plaintiffs appeal.
A motion to dismiss under section 2-615 of the Code of Civil Procedure (Procedure Code) (735 ILCS 5/2-615 (West 1998)) attacks the legal sufficiency of the complaint. The question presented is whether the allegations of the complaint, when viewed in a light most favorable to plaintiffs, are sufficient to state a cause of action upon which relief can be granted. Vernon v. Schuster, 179 Ill. 2d 338, 344, 688 N.E.2d 1172, 1175 (1997). A reviewing court will uphold a trial court's decision to dismiss a complaint with prejudice for failure to state a cause of action if it clearly appears that no facts could be set forth that would entitle plaintiffs to relief. Mattis v. State Universities Retirement System, 296 Ill. App. 3d 675, 683, 695 N.E.2d 566, 571 (1998).
Legislative enactments enjoy a heavy presumption of constitutionality. The party challenging the constitutionality of a statute has the burden of clearly establishing its invalidity. In re Marriage of Lappe, 176 Ill. 2d 414, 422, 680 N.E.2d 380, 384 (1997). Courts must resolve all doubts in favor of the statute's constitutionality. Lappe, 176 Ill. 2d at 422, 680 N.E.2d at 384-85.
B. Whether the Credit Constitutes an Appropriation or a Public Fund
The trial court found that the Credit did not violate the constitutional provisions cited by plaintiffs because it does not constitute public funds but merely allows people to keep more of their own money. Plaintiffs argue that following the trial court's reasoning would permit the State to do indirectly through the Tax Code what it cannot do directly. Plaintiffs insist that the effect of reimbursing parents for private school tuition expenses through the Credit is exactly the same as reimbursing them through payments from the State treasury. The cost of a tax benefit given to certain taxpayers is necessarily borne by other taxpayers in the form of higher taxes or reduced services; thus, these taxpayers are compelled to support the religious preferences of those who will be able to claim the Credit.
Section 3 of article I of the Illinois Constitution guarantees the free exercise of religion and also states:
"No person shall be required to attend or support any ministry or place of worship against his consent, nor shall any preference be given by law to any religious denomination or mode of worship." Ill. Const. 1970, art. I, §3.
Section 3 of article X of the Illinois Constitution prohibits the State and its political subdivisions from making any appropriation or paying from any public fund anything in aid of any church or sectarian purpose, or to help support or sustain any school or other literacy or ...