Court gives Nevada families reason to hope on Education Savings Accounts

Nevada parents and families around the country have reason to hope after today’s Nevada Supreme Court ruling. Responding to claims that Nevada’s education savings accounts are contrary to the state constitution, the Nevada Supreme Court ruled that the accounts do not violate constitutional clauses regarding prohibitions on using public money for private or religious purposes (otherwise known as “Blaine Amendments”).

In the opinion, Justice James W. Hardesty wrote,

Once the public funds are deposited into an education savings account, the funds are no longer ‘public funds’ but are instead the private funds of the individual parent who established the account. 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.’

As other state lawmakers consider making education savings accounts available to families in their states, these policymakers can note that the highest courts in two states have found that the accounts are constitutional even under Blaine Amendment provisions.

This means the accounts belong to families and their children and considered private funds to help students succeed. Justice Hardesty wrote,

That the funds may be used by the parents only for authorized educational expenses does not alter the fact that the funds belong to the parents. And, though the funds may revert back to the State under certain circumstances, we nonetheless conclude that, during the time the funds are in the education savings accounts, they belong to the parents and are not ‘public funds.’

Unfortunately, the Nevada court also ruled that state-specific constraints on education funding requirements mean that lawmakers must find a new funding source. These rules are unique to Nevada’s funding formula, and lawmakers should act quickly in the next legislation session (or before) to adjust state law accordingly.

Meanwhile, Nevada’s Supreme Court ruling made the state the second state after Arizona to find that education savings accounts are different from other forms of parental choice in education. The Blaine Amendment provisions that have derailed or stalled other learning opportunities are not blocking the accounts—excellent news for lawmakers around the U.S. in states with such constitutional language.