Both sides look to high court to settle segregated-school tax issue
Washington — Sen. Robert Dole (R) of Kansas spoke wistfully. ''The more you explore this issue, the more complicated it becomes,'' he told his Senate Finance Committee, meeting this week to discuss tax exemptions for segregated private schools. He wished out loud that the Supreme Court of the United States would untangle the mess.
Ever since President Reagan announced that the Internal Revenue Service (IRS) has no authority to deny tax exempt status to racially segregated schools, the dispute has followed a Byzantine path.
Even the timing of the announcement raises questions. The Treasury Department told reporters at 4 o'clock on a Friday afternoon (Jan. 8) so that they would then have little time to seek out responses, according to a Treasury memorandum just made public.
The tactic was not successful in holding back the controversy for long. In the firestorm of criticism after the announcement, President Reagan backtracked, proposing a bill that would require the IRS to deny tax exemptions to private schools that discriminate. His bill would be retroactive to 1970, the year IRS installed its antidiscrimination rule.
Administration officials told the Senate Finance hearing Feb. 1 that they had canceled the IRS regulation solely because they found it had no legal basis. They firmly rejected any racial motive.
Sen. David L. Boren (D) of Oklahoma wanted to know why the administration had not first proposed new legislation to legalize the regulation. ''Why only after the criticism'' did the administration act? he asked.
''You're absolutely right,'' said Deputy Treasury Secretary R. T. McNamar, conceding that he had mishandled the issue.
Now that the administration does have a bill, it appears to be in deep trouble.Senator Dole, who has agreed to introduce it, gives the measure little chance of early passage. Opponents are lining up on all sides.
Sen. Gary Hart (D) of Colorado has announced that he has one-third of the Senate backing a resolution asserting that the IRS already has power to deny tax exemptions to segregated academies. US Rep. Don Edwards (D) of California is sponsoring a similar action in the House.
Benjamin Hooks, executive director of the National Association for the Advancement of Colored People, said this week that any legislation except such a resolution would be a ''dangerous precedent'' that would legitimize the President's action. He called for letting the courts act first on the regulations.
Supporters of Christian schools are equally unhappy with the Reagan legislation, which they have branded as a betrayal.
Orin G. Briggs, special counsel for the American Association of Christian Schools, said that the government should have no regulations for religious schools. However, he went along with both Senator Dole and Mr. Hooks on one issue. He, too, said he wants the Supreme Court to resolve the dispute.
Still in the US Supreme Court is a major case involving Bob Jones University of South Carolina and a Christian school in North Carolina, both of which are challenging an IRS denial of tax exempt status. Both schools maintain that their religious faith requires them to discriminate by race.
The Reagan administration asked the high court to drop the two cases when it moved Jan. 8 to cancel the IRS regulations. The justices have not yet announced whether they will comply. However, at least two other related cases are in process. So the court may yet provide some clear answers on the constitutional issues, as well as an escape route for lawmakers who wish to avoid the dispute.