The Montana Department of Revenue will continue to fight a court ruling that money from a tax credit program can benefit religious schools.
District Judge Heidi Ulbricht ruled in May that the department incorrectly excluded religious schools from the program, which is funded by donations that can be offset by up to $150 in nonrefundable tax credits. The 2015 bill that created the program limited its annual tax credits to $3 million.
The department filed its appeal with the Montana Supreme Court on Thursday.
The bill was the first time Montana had dipped a toe into school choice, a catch-all umbrella for programs that allow public money to be used to pay for the education of students in nonpublic schools. Legislators who supported the bill were irate when the department announced the rule banning religious schools, and three parents whose children attend Stillwater Christian School in Kalispell challenged the rule with the help of the Institute for Justice, a libertarian public interest law firm.
The department said an institution controlled by any church or religious sect could not be considered a "qualified education provider," arguing that the state constitution prohibits appropriations to faith-based schools.
In March 2015, District Judge David Ortley granted a preliminary injunction to prevent the department from implementing the rule.
Ulbright found that the program is funded through tax credits, not appropriations, and the constitution does not address the use of tax credits. "Nonrefundable tax credits simply do not involve the expenditure of money that the state has in its treasury," Ulbright wrote.
The notice filed Thursday merely informed the state Supreme Court of the department's appeal, not its grounds for appeal.