Monday, May 9, 2022

Charter Schools, Race, and Polygamy

Yesterday, Fox 13 in Utah ran an exposé of Vanguard Academy, a public charter school in West Valley City, UT (which seems to be a suburb of Salt Lake City). The charter school is run by the Kingston family, a Mormon fundamentalist group.

(As a quick aside, Mormon fundamentalism has become a popular culture thing again, largely because of Hulu's "Under the Banner of Heaven." While this blog post is basically not at all about Fundamentalist Mormonism, it's worth noting that there isn't a single fundamentalism; there are disparate groups. Moreover, it's a distinctly modern thing---fundamentalism arose as aa direct response to modernism. Finally, though the polygamy aspects of Mormon fundamentalism swamp discussion of other aspects, honestly, the economic system many of these groups adopt is at least as interesting.)

The reporting focuses on how the board of Vanguard Academy may be conflicted because they all have familial or religious ties. I'm a little skeptical of that claim--it feels a lot like religious stereotyping, accusing members of a disfavored religious group of being unable to think independently. That said, I haven't looked closely either at the board's composition or at the regulatory regime with which a charter school must comply.

But there's another issue: Vanguard Academy is 99.8% white (the other 0.2% are Hispanic/Latino). Meanwhile, West Valley City, UT is about 46% white non-Hispanic/Latino. A full 40% of the city's population is Hispanic or Latinx.

Is that a problem? Well, if Vanguard Academy were a private school, it would be a significant one. In 1975, the IRS published a revenue procedure that required private schools to adopt a racially nondiscriminatory policy with respect to students and to actually operate in accordance with that policy if they wanted to qualify as tax-exempt. It's worth noting that Vanguard Academy has such a policy on its website.

But private schools also have to show that they abide by that policy. And both the IRS and the Tax Court have determined that in determining whether a school acts in accordance with that policy, one factor to consider is whether the racial composition of the school varies wildly from that of the surrounding community.

Vanguard Academy clearly does.

But that variance will not affect its tax-exempt status. Why not? Because the revenue procedure expressly provides that it does not apply to public schools.

And, while Vanguard Academy is privately run, the IRS has repeatedly held that charter schools do not fall under the revenue procedure's nondiscrimination rules. Rather, it stated in its exemption ruling for Renaissance Advantage Charter School, "You are not subject to the publishing requirements of Rev. Proc. 75-50, 1975-2 C.B. 587, so long as you operate a charter school. If your method of operation changes to the extent that your charter is terminated, cancelled or not renewed, you should notify your Key District Office. If you continue to operate a school, you will be required to comply with the publishing requirements of Rev. Proc. 75-50." (I can't find the ruling on the public internet, but if you want to read it, its Westlaw citation is 2004 WL 1194469.)

Honestly, this strikes me as a bad conclusion, especially as charter schools proliferate. To the extent charter schools enjoy tax-exempt status, they should face the same obligations as private schools, including the same requirement that they actively not discriminate on the basis of race.

Samuel D. Brunson

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