On June 30, 2020, the Supreme Court, in Espinoza v. Montana Department of Revenue, ruled that states must allow religious schools to participate in programs that provide scholarships to students attending private schools.

Background of Espinoza Case

The Montana Legislature established a program that granted tax credits to people who donated to organizations that award scholarships for private school tuition. However, the Montana Constitution contains a “no-aid provision” that prohibits government aid to flow to any school “controlled in whole or in part by any church, sect, or denomination.” To reconcile the program with this state constitutional provision, the Montana Department of Revenue (“Department”) promulgated a rule that prohibited families from using tax credit program scholarship money at religious schools. When the Department’s rule prevented three mothers from using the scholarship money at Christian schools, they sued the Department and alleged that the Rule discriminated on the basis of their religious views and the religious nature of the schools they had chosen. The Montana Supreme Court held that the tax credit scholarship program, without the rule, violated Montana’s no-aid provision and invalidated the program entirely.

The Opinion

Chief Justice Roberts wrote the majority opinion for a 5-4 majority, including Justices Alito, Kavanaugh, Gorsuch, and Thomas. Justices Breyer, Ginsburg, Kagan, and Sotomayor dissented, in three different dissenting opinions.

Chief Justice Roberts treated the issue in Espinoza as nearly identical to that decided three years ago in Trinity Lutheran Church of Columbia, Inc. v. Comer. In Trinity Lutheran, the Supreme Court held that the exclusion of churches or religious organizations from an otherwise neutral and secular aid program violated the First Amendment. Rather than the tuition tax credit at issue in Espinoza, that earlier case involved a daycare operated by a church, which applied for a grant to resurface a playground. The Missouri Department of Natural Resources had denied the daycare’s grant application because of a similar no-aid provision in the Missouri Constitution. The Court, in a narrow opinion, held that denial to be a violation of the Free Exercise Clause.

In Espinoza, the Court has extended Trinity Lutheran’s analysis to apply to tuition tax credits as well. The Court held that if a state chooses to subsidize private education, it cannot disqualify private religious schools solely based on their religious status. In the majority’s view, the application of the no-aid provision did just this and was therefore unconstitutional.

While many religious liberty cases are decided and based on a careful balancing of both Establishment Clause and the Free Exercise Clause considerations, the Espinoza majority quickly dismissed any arguments concerning the Establishment Clause here, stating: “We have repeatedly held that the Establishment Clause is not offended when religious observers and organizations benefit from neutral government programs.” The focus of the Court’s opinion, therefore, was whether the application of the no-aid provision to the scholarship program violated the Free Exercise Clause. The Free Exercise Clause protects religious observers against unequal treatment on the basis of religion. Quoting its decision in Trinity Lutheran, the Court said that “disqualifying otherwise eligible recipients from a public benefit ‘solely because of their religious character’ imposes a ‘penalty on the free exercise of religion that triggers the most exacting scrutiny.’”

Applying that standard from Trinity Lutheran, the Court here found that Montana’s application of the no-aid provision “bar[red] religious schools from public benefits solely because of the religious character of the schools.” Therefore, because Montana imposed unequal treatment based on the religious status of the schools, Montana had to satisfy the “strict scrutiny” standard of review—meaning that the application of the no-aid provision must further a compelling governmental interest, or an interest “in the highest order,” to survive review.

Montana argued that it had a compelling governmental interest in separating church and state “more fiercely” than the United States Constitution and the Establishment Clause. The Court disagreed, and said, “A state’s interest ‘in achieving greater separation of church and State than is already ensured under the Establishment Clause . . . is limited by the Free Exercise Clause.’” In short, the Court found that going beyond what is minimally required by the Establishment Clause is not a valid reason to infringe upon free exercise of religion.

The Court also attempted to distinguish the denial of state funding based on religious status and the denial of state funding based on religious use. Apparent from its text, the Montana no-aid provision was intended to prevent the use of state funds for religious education; but the Court instead dismissed that concern and said, “Status-based discrimination remains status based even if one of its goals or effects is preventing religious organizations from putting aid to religious uses.”

Justice Ginsburg’s dissent, in which Justice Kagan joined, argued that the Montana Supreme Court “remedied the state constitutional violation by striking the scholarship program in its entirety.” By eliminating the program entirely, Justice Ginsburg argued that Montana treated secular and sectarian schools equally, in that both were ineligible for the scholarship program benefits. Therefore, Justice Ginsburg reasoned, Montana did not place a burden on the petitioners’ Free Exercise rights.

Justice Breyer’s dissent focused on the relationship between the Establishment and Free Exercise Clauses, and explained that this case should be not be controlled by Trinity Lutheran, but instead should be controlled by a more similar case, Locke v. Davey. In Locke, the Supreme Court held that a state does not violate the Free Exercise Clause when it forbids, by application of a no-aid provision, state scholarship funds for devotional theology majors.

Justice Sotomayor’s dissent, in which Justice Kagan joined in part, argued that the Court “ask[ed] a question that this case does not raise and that the Montana Supreme Court did not answer,” therefore failing to heed constitutional principles governing the Supreme Court. She argued that by ruling on the question of whether excluding religious schools and affected families from a program violated the Constitution, the majority first turned an “as-applied” challenge into a facial constitutional challenge of the no-aid provision, and then decided it incorrectly.

Going Forward

One of the most apparent consequences of this decision is that a state may not prohibit the use of tuition tax credit and school voucher programs at religious education institutions if the state permits their use at non-religious private institutions. Some states already permit school vouchers to be used at private religious institutions, which the Supreme Court held Zelman v. Simmons-Harris did not violate the Establishment Clause. But now it appears that states may be required to subsidize religious education if they subsidize private education at all. This issue presents potentially large consequences because it may encourage states to take money away from public school funding to provide additional support to religious schools.

Furthermore, an increase in the amount of public funds flowing to private religious schools also may have unintended consequences of the sort the Establishment Clause has long been invoked to prevent. For example, with greater public funding, states may demand a higher level of oversight and other involvement in religious schools. Justice Breyer’s dissent argues that the majority’s approach “risk[s] the kind of entanglement and conflict that the Religion Clauses are intended to prevent.”

It is also important to note that many states have similar “no-aid” provisions in their constitutions—sometimes called “Blaine amendments” or “baby Blaine amendments.” The Court stopped short of holding that Montana’s provision was unconstitutional. Instead, the Court held only that its application to the scholarship program was unconstitutional. However, lower courts may interpret the Espinoza opinion broadly, which would further undermine Blaine amendments and other state constitutional provisions that prohibit state support of religion more generally.

Similarly, the Establishment Clause—which prevents the government from advancing religion—seems to no longer be on equal footing with the Free Exercise Clause. States now do not have a “compelling governmental interest” in ensuring that government does not advance religion if it means that doing so may infringe on free exercise rights. While these two clauses always have promoted competing interests, the Supreme Court has noted that there must be a “play in the joints” between the two. With Trinity Lutheran and Espinoza, it appears that the Roberts Court is significantly more concerned with Free Exercise rights than Establishment Clause prohibitions. When taken together, Trinity Lutheran and Espinoza could stand for the broad premise that states may not disqualify religious educational institutions from receiving state aid solely because of their religious nature.