Tuesday, January 16, 2024

Wait a minute. . .

In what is surely destined for the Supreme Court, a judge in Maryland has applied the rule of the 501(c)(3) tax exemption to the question of whether or not independent schools are subject to Title IX (and other federal requirements).  In his argument, the tax exemption is itself a federal subsidy.  If you don't pay a tax, you are therefore being subsidized by the government and cannot argue that you do not have to follow the government's rules.  For as long as anyone can remember, refusing government money has been the presumed insulation between Christian or other conservative schools (including colleges and universities) against the overreach of the government.  This is the first crack in that bedrock -- although it remains to be seen if it is upheld. 

Remember here that the idea is that the tax exempt status is the equivalent of a government subsidy.  Again, it was a school of the Lutheran Church Missouri Synod that was at the heart of this ruling but it affects many more schools -- including Hillsdale College. In the case Buettner-Hartsoe v. Baltimore Lutheran High School Associationsome graduates of Concordia Preparatory School allege that they while they were students they were sexually harassed and assaulted by other students at the school.  Furthermore, they allege that the school did not follow the Title IX specified requirements for handling such cases -- procedures and requirements mandated by the federal regulation forbidding sex discrimination in schools.

Concordia Prep use the familiar argument that they are not subject to Title IX because they do not receive any federal funding.  This has been the presumption for a very long time.  According to the  Federal Society, “Traditionally, independent schools that do not receive federal financial aid have not been considered to be subject to Title IX’s requirements.”  The Maryland district court listened to this old expectation but ruled that Concordia Prep (and all other 501(c)(3) tax exempt organizations) is subject to Title IX simply because it receives a federal tax exemption as a 501(c)(3) non-profit organization.  Not paying taxes is the equivalent to actually receiving federal money.  This idea could have far reaching consequences.  Not paying a tax is the same as receiving a taxpayer subsidy.

Of course, Concordia Prep is appealing the case and I am sure it will make it to the Supreme Court where it will likely be overturned.  That, however, has not prevented a similar action against Hillsdale College, a school which has scrupulously refused taxpayer dollars even in the indirect form of student loans or grants.  Two women there have sued Hillsdale for the same reason as Concordia Prep -- not following Title IX in handling their sexual assault complaint against two male students.  Hillsdale insists that they had a more rigorous response than even Title IX would have mandated.

“The proposition that nonprofit tax status should subject private institutions to the regulations applied to government grantees would be a radical departure from longstanding tax and legal principles and would put at risk the fundamental independence of America’s private charitable and educational sectors, to say nothing of its religious institutions.”  (Cato Institute, Walter Olson)

This is not a chicken little cry against those who would avail themselves of every possible means of restricting what happens in religious schools and within religious facilities.  This is a warning shot that those who defy the extent of government overreach will be on notice to be harassed.


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