In Kentucky, The Court Rejects Tax Credit Scholarship Voucher Program.

In my most recent Forbes post, I explain tax credit scholarship with pickles, and cover why Kentucky just killed a brand new voucher program.

Kentucky’s Supreme Court has ruled that Kentucky’s tax credit scholarship program is unconstitutional.

Tax credit scholarships are a means of funding school vouchers. Here’s how they work.

You love a certain brand of pickle. Your spouse says that the family already has some perfectly good pickles, and under no circumstances will they allow you to spend household budget money on your brand of pickles. So you make a deal with your employer; when it’s time to pay you, they will spend fifty dollars of what they would have paid you to buy pickles instead, the give you the pickles and a check that is fifty dollars lighter. “Look,” you tell your angry spouse. “I didn’t spend a cent of our household budget on pickles.” But your spouse notes that the household budget is still fifty dollars short.

In a tax credit scholarship program, corporations or individuals contribute money to a “scholarship” fund that will pay part of some student’s tuition at a private school. The state then counts that contribution towards taxes. Proponents argue (as Betsy DeVos did when she proposed a federal version of this system) that this does not constitute spending taxpayer funds on private or religious schools because the money was never actually in the government’s hands, despite the fact that the government will then face a revenue shortfall.

The Kentucky Supreme Court was unimpressed by this argument.