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Supreme Court Rules that Religious Schools Cannot be Excluded from State Funding for Private Schools

Education groups and activists on all sides of the debate over private school choice agree that a recent ruling by the U.S. Supreme Court will be tremendously consequential. In a 5-4 decision in Espinoza v. Montana Department of Revenue, the court held that a Montana prohibition on families from using state tax-credit scholarships at religious schools was an unconstitutional violation of religious freedom.

Montana is one of 38 states that have amendments in their state constitutions (AKA “Blaine amendments) or “no-aid” rules that bar distribution of public funds to religious institutions. Montana’s Department of Revenue, which administers its program that provides tax-credits in exchange for donations to modest scholarships, had determined that, under the no-aid provision, families benefiting from the state’s program could not use those scholarships to send their children to religiously affiliated private schools.

The U.S. Supreme Court held that Montana’s no-aid provision “bars all aid to a religious school simply because of what it is, putting the school to a choice between being religious or receiving government benefits,” and so is subject to “the strictest scrutiny” under the Free Exercise Clause. The Supreme Court of the United States further held that “achieving greater separation of church and State than is already ensured under the Establishment Clause” is not a compelling state interest, and that the no-aid provision does not advance Montana’s interest in focusing financial support on public education, because it cuts off funding only to religious schools while allowing funding for other non-public schools.

The plaintiffs at the center of the Montana case argued that decision violated their religious liberty. The state argued that that the constitutional provision kept Montana’s “own state legislature out of the business of funding of religious schools” and that it didn’t discriminate because the same rules applied to all scholarship families, regardless of their religion.

SCOTUS rejected the argument that there was no Free Exercise violation because the Montana courts struck down the entire scholarship program for both religious and non-religious private schools. The Court explained that, since the Free Exercise Clause precludes applying Montana’s no-aid provision, the federal Constitution eliminates any “basis for terminating the program.”

The Supreme Court of the United States sided with the families in a 5-4 vote. Chief Justice Roberts delivered the opinion of the Court, joined by Justices Thomas, Alito, Gorsuch, and Kavanaugh. Justice Thomas filed a concurrence, joined by Justice Gorsuch, and Justices Alito and Gorsuch each filed separate concurrences. Justice Ginsburg filed a dissent joined by Justice Kagan; Justice Breyer filed a dissent joined in part by Justice Kagan; and Justice Sotomayor filed a separate dissent.

Seventeen states operate 22 tax-credit scholarship programs that provided awards to about 300,000 students in 2017, according to a 2019 report from the Government Accountability Office.

Some public education advocates that oppose public funding for private school choice programs have argued that a ruling for the families in the Espinoza case could swing open the doors for greater public funding of private, religious education. But, if that’s true, the effect won’t be immediate in most states.

There is nothing in the U.S. Supreme Court’s opinion that would require a state to start a private school choice program if it doesn’t already have one. Of the states with no-aid provisions, 14 have determined those rules bar the use of publicly funded school choice programs to private religious schools. Some of those states have not established voucher

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