September 2022 | Number 477
Stunning Summer Decisions from Two Federal Courts on Private Schools' Tax Exempt Status
Private school advocates were shocked by two federal court decisions this summer declaring that private schools with tax-exempt status must comply with federal Title IX regulations. These entirely unexpected rulings -- one from Maryland and one from California -- represent a stark departure from the previous understanding of the situation. Until now, it was widely understood that private schools were only subject to Title IX if they accepted federal funds. In order to be free of such federal obligations, many private schools have long declined to accept federal funds. Under these new rulings, however, private schools that claim tax exempt status would have to comply with Title IX even if they do not take federal funds. Such a state of affairs would have enormous implications for private schools, and indeed all nonprofit organizations.

CAPE and a coalition of interested parties have signed a petition in support of an amicus brief appealing the Maryland court’s decision. Stay tuned on this one.
Department of Agriculture Issues Important Clarification on Title IX Exemption
For years, religious schools participating in the National School Lunch program have received conflicting advice over whether they need to proactively submit a written request to the Department of Agriculture to claim a religious exemption. In August, the Department issued a statement clarifying that schools do not need to do so. According to the Department, “USDA regulations do not require a religious educational institution to submit a written request for a Title IX exemption in order to claim that exemption.”

This guidance tracks with the position of many religious school advocates, who have long observed that the Title IX statute does not require pre-submission of a religious exemption claim, and that a religious institution does not forfeit its First Amendment rights to religious freedom by not claiming an exemption in advance.

As always, schools should seek professional legal advice on these issues -- CAPE Outlook does not count.
Effort to Repeal Universal ESA Law in Arizona Appears to Fall Short
After having previously claimed more than enough signatures to block Arizona’s new law providing all school age children with education savings accounts, school choice opponents in the state conceded that they had likely failed to garner the number of signatures necessary after all. The new law, under which all 1.1 million K-12 students in Arizona would be eligible for education savings accounts, can take effect once the Arizona secretary of state verifies that the number of signatures on the choice-opponents' petition are insufficient. If enough signatures had been gathered, the law would be put on hold until November 2024, at which time a statewide vote would be held.

Arizona Governor Doug Ducey has called the new law the gold standard of educational freedom in the United States.
CAPE Endorses School Choice Legislation Introduced in Congress
The Educational Choice for Children Act, introduced in both the US House of Representatives and Senate in June, would create a federal tax credit to incentivize individual and corporate contributions to non-profit scholarship granting organizations. Under the bill, up to $10 billion in tax credits would be available each year, with a minimum allotment of $20 million per state.

No public money would go to schools -- the funds flowing to students and schools through scholarships to pay private school tuition would be private funds donated by individuals and corporate entities, for which they would receive a tax credit. It is estimated that if passed, the legislation would help up to 2 million additional students access a school of their choice.
Senator Bill Cassidy (LA), sponsor of the Educational Choice for Children Act, speaks with former education secretary Betsy DeVos at a Congressional School Choice Caucus event on Capitol Hill. Photo provided by the office of Senator Tim Scott (SC).
WV Scholarship Program Heads to State High Court
In July, a West Virginia judge placed an injunction on implementation of West Virginia’s new education savings account program. As a result, students who had planned to attend private schools under the program have had their plans put on hold while the West Virginia Supreme Court considers the case. Oral arguments are scheduled for October 4.
Educator Expense Deduction Rises to $300
From the IRS:

As the new school year begins, the Internal Revenue Service reminds teachers and other educators that they'll be able to deduct up to $300 of out-of-pocket classroom expenses for 2022 when they file their federal income tax return next year.
This is the first time the annual limit has increased since the special educator expense deduction was enacted in 2002. For tax years 2002 through 2021, the limit was $250 per year. The limit will rise in $50 increments in future years based on inflation adjustments.

For 2022, an eligible educator can deduct up to $300 of qualifying expenses. If they're married and file a joint return with another eligible educator, the limit rises to $600. But in this situation, not more than $300 for each spouse.
179D Tax Credits Extended to Nonprofits
From an Orthodox Union press release:

"The 'Inflation Reduction Act of 2022' allows nonprofits to benefit from current energy-related tax credits by making them transferable to for-profit companies. For more than 10 years, Internal Revenue Code section 179D has provided tax credits to building owners to subsidize the cost of making their buildings more energy efficient."

The bill allows nonprofits “to make energy efficiency improvements to their buildings and transfer the value of the credit to for-profit companies designing or installing the new energy systems. The company would then deduct the value from its invoice to the nonprofit.”
NY Regents Approve Substantial Equivalency Regs
On September 13, the New York State Board of Regents unanimously approved new “substantial equivalency” rules after years of debate and continuing controversy. The rules concern the statutory requirement in New York that children at private schools receive instruction that is “substantially equivalent” to that provided to children at the public schools.

CAPE has weighed in on two occasions with public comments and will continue to monitor the situation closely.

National Blue Ribbon Schools Announced
On September 16, Secretary of Education Miguel Cardona recognized 24 exemplary private schools among the 297 schools honored as National Blue Ribbon Schools for 2022. Private schools are nominated by CAPE as being among their state’s highest performing schools as measured by state assessments or national normed tests. A list of the private National Blue Ribbon Schools is available on CAPE's web site.

All winning schools will be honored at an awards ceremony this coming November in Washington, DC.
CAPE Platinum Level Sponsors: Catapult Learning and Archangel
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New CAPE Website!
CAPE is very pleased to unveil its new website, which can be found at CAPEnetwork.org. In the coming weeks and months, we will be working diligently to update some of the data found on the old site that has been transferred to the new one. We'll also be making some updates to the newsletter. We hope the new site serves the private school community well!
Private Education: Good for Students, Good for Families, Good for America
CAPE member organizations:

Agudath Israel of America

Association of Christian Schools
International

Association of Christian
Teachers and Schools

Association of Waldorf
Schools of N.A.

Christian Schools International

Council of Islamic Schools
in North America

Council on Educational Standards
and Accountability
Evangelical Lutheran Church
in America

Friends Council on Education

Islamic Schools League of America

Lutheran Church–Missouri Synod

National Association of
Episcopal Schools

National Association of
Independent Schools

National Catholic
Educational Association
National Christian School
Association

Office for Lasallian Education
Christian Brothers Conference

Oral Roberts University
Educational Fellowship

Seventh-day Adventist
Board of Education

United States Conference of
Catholic Bishops

Wisconsin Evangelical Lutheran
Synod Schools
Affiliated State Organizations a coalition of national associations serving private schools K-12

Executive Director:
Michael Schuttloffel

Outlook is published monthly (September to June) by CAPE.
ISSN 0271-145

1300 Pennsylvania Ave, NW
#190-433
Washington, DC 20004
Tel: 844-883-CAPE
Michael Schuttloffel
Executive Director
Phone: 844-883-CAPE