U.S. Supreme Court Rules that State Scholarship Program May Not Exclude Religious Schools

In Espinoza v. Montana Department of Revenue, the U.S. Supreme Court held that Montana’s scholarship program for private school students cannot exclude students attending private religious schools simply based on the schools’ religious status. In 2015, the Montana legislature created a scholarship program that grants tax credits to individuals who donate to organizations that award scholarships for private tuition. The Montana Constitution, however, contains a provision barring government aid to any school controlled by a church, sect, or denomination. To reconcile the scholarship program with this no-aid provision, the Montana Department of Revenue issued a rule prohibiting the use of the scholarships at religious schools. Three mothers who were prevented from using the scholarship to pay their children’s tuition at religious schools sued, alleging that the rule discriminated on the basis of their religious views and the religious nature of the schools they had chosen for their children.

The U.S. Supreme Court held that the application of the no-aid provision to the scholarship program violated the mothers’ right to free exercise of religion under the U.S. Constitution. Under the Court’s precedent, if a law disqualifies otherwise eligible recipients from a public benefit solely because of their religious character, then that law violates the Free Exercise Clause unless it satisfies strict-scrutiny review (i.e., the law is narrowly tailored to a compelling state interest). In this case, the no-aid provision does not zero in on any essentially religious course of instruction. Rather, it bars aid to a school and students who attend the school solely because of the school’s status as a religious school. Consequently, strict-scrutiny review applies to the no-aid provision.

The Court then determined that the application of the no-aid provision failed strict-scrutiny review. In the Court’s view, none of the interests allegedly served by the no-aid provision were compelling. Although the Montana Department of Revenue argued that the no-aid provision provides greater separation of church and state than the U.S. Constitution and promotes religious freedom, the Court found that these interests still do not justify excluding religious school students. Montana’s purported interest in religious freedom and separation of church and state cannot qualify as compelling where, as here, it infringes on the mothers’ constitutional right to free exercise of their religion. Finally, safeguarding public education is not a compelling state interest because only religious private schools were subject to the no-aid provision.

This case clarifies that a state need not subsidize private education, but once a state decides to do so, it cannot disqualify some private schools solely because of the schools’ religious status. Consequently, the case significantly narrows a state’s ability to limit aid to religious organizations without violating the federal guarantee of free exercise of religion. This is important for the 37 states (including Illinois) that have no-aid provisions similar to Montana’s. In Illinois in particular, appellate courts have ruled that a tax-credit program benefiting students of private religious schools does not violate the Illinois no-aid provision. The U.S. Supreme Court’s ruling in Espinoza reinforces those rulings.

Nonpublic school inquiries and questions about the specifics of the Espinoza decision can be directed to Vanessa Clohessy.

Source: Espinoza v. Montana Dep’t of Revenue, 140 S. Ct. 2246 (2020)

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