Constitutional – Schools & School Boards – CARES Act – Private School Funding

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Since CARES Act funds are received in the state treasury and distributed through it, those funds are “public funds” within the meaning of S.C. Const. art. XI, § 4. Consequently, the governor may not allocate CARES Act funds to support a program that would make tuition grants to allow students to attend private and independent primary and secondary schools.

Congress’s Coronavirus Aid, Relief, and Economic Security (CARES) Act includes the allocation of money to the Governor’s Emergency Education Relief (GEER) Fund. The respondent-governor created the Safe Access to Flexible Education (SAFE) Grants Program to be funded using $32,000,000 of the GEER funds awarded under the CARES Act. The program would provide grants of up to $6,500 per student to cover the cost of tuition for eligible students to attend participating private or independent schools in South Carolina for the 2020-2021 academic year.

Petitioners have public-importance standing to challenge the SAFE Grants Program. The COVID-19 pandemic has posed unprecedented challenges in every area of life and severely disrupted essential governmental operations. A resolution for future guidance is needed here because this case involves the conduct of government entities and the expenditure of public funds, a prompt decision is necessary, and it is likely the situation will occur in the future if and when Congress approves additional education funding in response to the continued COVID-19 pandemic.

“No money shall be paid from public funds nor shall the credit of the State or any of its political subdivisions be used for the direct benefit of any religious or other private educational institution.” S.C. Const. art. XI, § 4.

The GEER funds awarded to South Carolina are to be received from the federal government in the coffers of the state treasury and distributed through the treasury, at the behest of the governor, as a representative of the state, to be used in accordance with the education funding provisions of the CARES Act. When the GEER funds are received in the state treasury and distributed through it, the funds are converted into “public funds” within the meaning of Art. XI, § 4.

We reject the argument that the SAFE tuition grants do not confer a direct benefit on the participating private schools because, unlike the grants in Hartness v. Patterson, 255 S.C. 503, 179 S.E.2d 907 (1971), which were made directly to the student, the SAFE Grants are directly transferred from the state treasury to the selected school through use of a secure online portal. The direct payment of the funds to the private schools is contrary to the framers’ intention not to grant public funds “outrightly” to such institutions. In fact, the CARES Act prohibits direct payment of the funds to individuals and instead permits the grants to be awarded only to entities.

In addition, this case is distinguishable from Durham v. McLeod, 259 S.C. 409, 192 S.E.2d 202 (1972). There, we emphasized the “scrupulously neutral” nature of a student loan program, which left “all eligible institutions free to compete for [the student’s] attendance,” and the aid was not made “to any institution or group of institutions” in particular. Here, the SAFE grants are made available for use only at private educational institutions selected by the governor’s advisory panel. The program does not provide students with the independent choice we found to be acceptable in Durham. Accordingly, we hold the SAFE Grants Program uses public funds for the direct benefit of private educational institutions in violation of Art. XI, § 4 of our constitution.

We also reject the governor’s Supremacy Clause argument. There is no clear congressional intent in the education provisions of the CARES Act to allow the governor to allocate the GEER funds in his discretion in contravention of our state constitution.

We hold the governor’s allocation of $32 million in GEER funds to support the SAFE Grants Program constitutes the use of public funds for the direct benefit of private educational institutions within the meaning of, and prohibited by, S.C. Const. art. XI, § 4.

Adams v. McMaster (Lawyers Weekly No. 010-077-20, 17 pp.) (Donald Beatty, C.J.) Substituted opinion. Skyler Bradley Hutto and W. Allen Nickles for petitioners; Thomas Ashley Limehouse, Anita Fair, Robert Tyson, J. Michael Montgomery, Vordman Carlisle Traywick and Michael Anzelmo, Matthew Todd Carroll, Kevin Hall, Daniel Suhr, Brian Kelsey, Shelly Bezanson Kelly, Shawn David Eubanks, David Keith Avant, Mason Summers and Eugene Hamilton Matthews for respondents; Timothy Newton, Gray Thomas Culbreath, Leslie Davis Hiner, Joshua Dixon, Paul Sherman, Miles Landon Terry, Michelle Terry, Jay Alan Sekulow, Benjamin Sisney, Jordan Sekulow, David Duff, Francisco Negron, Reginald Wayne Belcher, Mark Brandon Goddard, Lindsay Danielle Jacobs, Robert Edward Lominack, Matthew Anderson Nickles, John Marshall Reagle, Vernie Williams, Connie Pertrice Jackson, Eliot Bradford Peace, Lindsey Boney, Peter Michael McCoy, Tina Cundari and Karl Smith Bowers for amici curiae. S.C. S. Ct.