Federal Free Exercise Clause Defeats State No-aid Provisions

by Brita Darling

Loyal readers of LegiSource[1] are already aware of the evolving body of law concerning the Free Exercise Clause of the U.S. Constitution and the religious “no-aid” provisions contained in many states’ constitutions, including Colorado’s.[2] The U.S. Supreme Court’s recent decision in Espinoza v. Montana Department of Revenue,[3] while not declaring these state no-aid provisions unconstitutional, significantly narrowed the instances in which state aid may be restricted from flowing to religious schools.

The case concerns a tax credit program created by the Montana legislature. Under the program, a person donating to a nonprofit organization that provides scholarships to low-income students to attend secondary schools may receive an income tax credit of $150 for a contribution of $150 or more. Upon award of a scholarship from the nonprofit organization, the parent and student decide which private school to attend. The school must meet the broad statutory definition of a “qualified education provider,” which definition includes religious and nonreligious schools.

Montana has a constitutional no-aid provision, similar to Article IX, Section 7 of the Colorado Constitution, which prohibits the state from providing aid to a school that is controlled by a “church, sect, or denomination.” While the Montana statute creating the tax credit program did not exclude religious schools from the broad definition of qualified education provider, the statute specifically states that the program must be administered by the state’s Department of Revenue in compliance with the constitutional no-aid provision. To that end, the department adopted a rule that prohibited a parent and student from using the scholarship at a religious school.

Three parents sued to challenge the rule that excluded religious schools from the program. The Montana Supreme Court held that the department exceeded its authority in promulgating the rule, because the rule conflicted with the statutory definition of qualified education provider. The court also held that the program was unconstitutional because, by including religious schools in the definition of qualified education provider, the statute violated the state’s no-aid provision. Because the court had no mechanism to bring the program into compliance with the no-aid provision, the court invalidated the entire program.

In a 5-4 decision by Chief Justice Roberts, the Court held that Montana’s application of its no-aid provision violated the Free Exercise Clause because it excluded aid to certain schools based purely on their status as religious schools. Citing the Court’s 2017 holding in Trinity Lutheran Church of Columbia, Inc. v. Comer,[4] “[t]he Free Exercise Clause, which applies to the states through the Fourteenth Amendment, ‘protects religious observers against unequal treatment’ and against ‘laws that impose special disabilities on the basis of religious status.”‘ In Trinity Lutheran, the Court’s holding was limited to religious status discrimination in a playground resurfacing program, with the Court specifically declining to decide the issue of religious use of state aid.

Acknowledging the Court’s distinction between religious status and religious use in Trinity Lutheran, the Court noted that concerns about religious use of the money were not the basis on which the Montana Supreme invalidated the program. Similar to the reasoning in Trinity Lutheran, the Court stated, “[t]his case also turns expressly on religious status and not religious use.” Discrimination based on religious status must satisfy the strict scrutiny standard of legal review. Applying that standard, the Court found that Montana failed to show sufficiently compelling state interests to justify its discrimination against religious schools. Further, the Court reinstated the program, explaining that the Montana Supreme Court should have recognized that applying the no-aid provision violated the federal Free Exercise Clause and should have therefore “rejected the invitation” to do so in favor of deciding the case under federal law as required by the Supremacy Clause of the U.S. Constitution.[5] Had it done so, the Court stated, it would not have invalidated the scholarship program under state law.

However, similar to Trinity Lutheran, the Court did not declare Montana’s no-aid provision unconstitutional on its face, but only as applied in this case. This leaves Colorado’s constitutional no-aid provision technically intact for now. And the Court seems to leave some room for constitutionally denying aid to a private organization on the basis that the aid will be put to a religious use.[6] However, it is difficult to predict what this type of exclusion would look like or how it could be implemented while still avoiding government’s excessive entanglement with an organization’s religious practices, which has been prohibited in earlier cases.[7]

What does Espinoza mean for Colorado?

Does the holding in Espinoza mean that the state is required to fund religious organizations or schools – or any private organizations or schools? The short answer is, “No.”

Nothing in the Espinoza decision requires the state to fund private education or school choice scholarships, tax credits, or other programs that have the effect, directly or indirectly, of supporting private organizations or schools, whether religious or nonreligious. The Espinoza Court states this clearly:

The State need not subsidize private education. But once a State decides to do so, it cannot disqualify some private schools solely because they are religious.

The state may continue to use 100% of available public money to support public institutions and public schools and, in fact, the Colorado Constitution requires the state to establish and maintain public schools.[8] Further, the General Assembly remains free to weigh policy decisions regarding the best use of public funds, whether to forego tax revenue, and whether to condition the receipt of public funds on compliance with participant qualifications, program outcomes, and financial reporting.  However, Colorado should be cautious if religious organizations or schools appear to be categorically excluded from sharing in the same opportunities or benefits that flow to nonreligious private organizations or schools, whether due to statute or the application of the no-aid provision.



[1] U.S. Supreme Court Resolves a Playground Fight, August 3, 2017; Missouri Tires – Colorado Schools, March 10, 2017.

[2] Article IX, section 7 of the Colorado Constitution prohibits the state from using public funds in aid of a church, or for a sectarian purpose, or to help support or sustain a church school. Colorado’s provision and other states’ provisions are also referred to as “Blaine amendments” after a failed effort by U.S. Representative James Blaine to include similar language in the U. S. Constitution.

[3] Espinoza v. Montana Department of Revenue, et al., No 18-1195 (2020).

[4] Trinity Lutheran Church of Columbia, Inc. v. Comer, 582 U.S. ___, 137 S. Ct. 2012.

[5] Id. at 22.

[6] Id. at 11-12. However, the Court recognized that some Court members “have questioned whether there is a meaningful distinction between discrimination based on use or conduct and that based on status.”

[7] See, e.g., Colorado Christian University v. Weaver, 534 F.3d 1245 (10th Cir. 2008).

[8] Article IX, section 2 of the Colorado Constitution.