New lawsuit challenges Idaho’s private school tax credit program

By Zach Hagadone
Reader Staff

Idaho’s controversial private school tax credit program is being challenged in court, with a lawsuit announced Sept. 17 in Boise arguing that House Bill 93 is unconstitutional.

According to Idaho Education News, the challenge is brought by the Idaho Education Association; Moscow School District; Mormon Women for Ethical Government; former-Superintendent of Public Instruction Jerry Evans; Rep. Stephanie Mickelsen, R-Idaho Falls; the Committee to Protect and Preserve the Idaho Constitution; and several citizens. 

The lawsuit centers on the obligation under Idaho Constitution’s that the state “establish and maintain a general, uniform and thorough system of public free common schools.” Meanwhile, the Idaho Parental Choice Tax Credit, passed by the Legislature in the 2025 session and signed by Gov. Brad Little, allocates $50 million in taxpayer money each year to provide families with students in private or religious schools with support for tuition costs and other expenses.

Referring to the Constitution’s requirement to support statewide public education, Boise attorney and president of the Committee to Protect and Preserve the Idaho Constitution Daniel Mooney said: “These 14 words are simple, yet they’re profound, and H.B. 93 has no basis in them.”

Under the provisions of the program, recipients are eligible for a tax credit up to $5,000 per child enrolled in a private or religious school, and $7,500 per student with special needs.

Rep. Wendy Horman, R-Idaho Falls, who co-sponsored H.B. 93, told Idaho EdNews that she is “as confident as we ever have been in the constitutionality of this bill, both with the Idaho Constitution and the United States Constitution.”

At the same time, Reclaim Idaho is gathering signatures for a petition titled “Not A Dollar More!” to oppose H.B. 93, available at reclaimidaho.org. 

The lawsuit comes amid a series of town halls hosted throughout the state by the Save Our Schools organization, which came to Ponderay on Sept. 11, and Priest River and Post Falls on Sept. 13. 

Moderated by educator and high school debate coach Marcy Curr, the Ponderay town hall included panelists Jan Bayer, Boundary County School District superintendent; education policy researcher Elizabeth Wargo; and Kim Keaton, of the Idaho Building Capacity Project and former Sandpoint Middle School principal.

“For the first time in Idaho history, our tax dollars are going to private education,” Curr said during her introductory remarks, later adding, “This is not just a matter of families taking their dollars to another school of choice, they’re taking all of our dollars with them.”

Curr went on to say that in addition to H.B. 93 channeling public funds toward private education, it lacks accountability. When the tax credit goes into effect in January 2026, it will be the only educational program administered by the Idaho Tax Commission, which raises concerns about whether those funds will be appropriately put toward legitimate educational needs. 

While recipients are required to show proof of their use of the money, Curr said there have been examples in other states with similar programs of credits or vouchers being used to buy LEGOs or trips to Disneyland. Public schools are audited every year and those results made public.

“They’re only held accountable if they’re audited, and right now fewer than 2% of tax returns in Idaho are being audited,” she said.

H.B. 93 passed the Legislature and secured Little’s signature despite “20 to 1 opposition” from the public, including a letter signed by 73 superintendents from around the state urging the governor to veto the bill, Curr said.

Bayer said that while she’s “not opposed at all to parent choice, it’s just very difficult when we have to go out and beg the public for a supplemental levy and a bond and we can’t hardly pass those, and we continue then to fight an uphill battle and funds are diverted.”

She argued that the state should first fulfill its constitutional obligation to fully fund public education, “and once that’s accomplished, I don’t mind those funds being diverted.”

Wargo warned that “an enormous amount of money is going to for-profit companies, most of which are nowhere near Idaho, in ways that don’t benefit kids. Those dollars are your tax dollars. … I don’t frankly believe that that’s what’s going to be best for our communities and the Idaho panhandle, specifically.”

Kim Keaton said Idaho’s “one-size-fits-all” funding formula doesn’t work for every school — especially rural schools where enrollments are small — requiring levies to make up the difference. Taking $50 million more out of the budget only makes that situation worse.

“In areas that don’t have the income that urban areas do … we need to have enough money for them,” he said, later adding, “Have we created more choice with private schools? They already existed. … [T]hey’re just going to get tax money.”

The potential windfall for the $300 billion education technology industry is obvious, Wargo said.

“If you don’t think that folks are trying to capitalize now knowing that that money is potentially there, you’re wrong,” she said.

While H.B. 93 came with a cap of $50 million, Wargo added that one of the advocates of the bill said that figure will rise to $250 million “in the blink of an eye.” In other states, such as Arizona and Florida, where similar programs are in place, appropriations have spiraled into hundreds of millions of dollars.

Sen. Jim Woodward, R-Sagle, explained his vote against H.B. 93, saying, “Our forefathers set in place this system where we said those who would otherwise not receive an education do. And that’s what the public system is doing — it creates community and a sense of belonging in the state. That is not to take away at all from what some parents do … but if we have to prioritize the money, we have to make sure that public system is taken care of. That’s been a real challenge.”

He echoed Wargo’s warning that the $50 million cap on H.B. 93 is no protection against increasing allocations.

“I think that made the legislation more palatable, but that cap will be challenged,” said Woodward, who serves on the budget-setting Joint Finance and Appropriations Committee. “If it’s not removed by the Legislature, then that cap will be challenged in court, I believe.”

Rep. Mark Sauter, R-Sandpoint, also voted against the bill, in part because he’s a strong supporter of public education, but also because he said it wasn’t a responsible use of tax dollars.

“I just didn’t think it was right that we would shift $50 million to something it was estimated that somewhere between 7% and 10% of our families might benefit from.”

Rather, he argued that those dollars should have been put toward property tax relief. What’s more, Sauter didn’t see how H.B. 93 increased school choice.

“There’s lots of school choices across districts, as well,” he said. “I just thought, for a myriad of reasons, I just couldn’t bring myself to vote for [H.B.] 93. I think there’s got to be better ways for us to support public education and school choice. … but we have to vote ‘no’ sometimes, and this was one that it wasn’t that hard for me to push the button.”