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.