Can States Exclude Religious Schools from Federal Education Freedom Tax Scholarships? The Answer May Lie in Colorado

Religious schools are anticipating an influx of students early next year, supported by scholarships funded by the Education Freedom Tax Credit. Whether they will actually be eligible to receive these students, however, is an open question in Vermont, Colorado, and likely other states.
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This question will likely be answered not through a direct legal challenge, but in a pending U.S. Supreme Court case involving an unrelated state program in Colorado. That case is St. Mary Catholic Parish v. Roy, for which the U.S. Supreme Court has set oral argument on Nov. 3.
 
St. Mary’s asks whether Colorado may require Catholic preschools to surrender faith-based admissions policies as a condition of participating in the state’s universal preschool program. What does this have to do with the Education Freedom Tax Credit?
 
A brief filed by 43 members of Congress explains that the Court’s ruling in St. Mary’s could decide whether states may similarly exclude religious schools from the new federal Education Freedom Tax Credit program.
 
While these are different programs, the underlying principles – freedom of religion and the right to free association – are the same.
 
Here’s the background: Colorado’s program provides funding for families to send their children to participating public or private preschools. The state requires schools to offer families an equal opportunity to enroll, regardless of sexual orientation or gender identity.
 
St. Mary and St. Bernadette Catholic preschools maintain that those conditions conflict with Catholic teachings on marriage, sexuality, and biological sex. Colorado, in turn, demands the schools to comply with rules the schools say violate their Catholic teachings. When the case went before the Tenth Circuit, the court sided with the state against the Church.
 
The congressional brief holds that Colorado is accomplishing indirectly what the Constitution forbids it to do directly – excluding religious schools from a generally available public benefit because they follow their faith.
 
The brief was signed by eight senators, led by Sen. James Lankford, and 35 House members, led by Rep. Tim Walberg. They contend that allowing Colorado’s policy to stand would give other states “a playbook to discriminate against religious organizations while doling out federal educational benefits.”
 
That concern is especially pressing because the Education Freedom Tax Credit takes effect Jan. 1, just eight weeks after the Court hears the St. Mary’s case. The program offers taxpayers a federal tax credit of up to $1,700 for donations to scholarship-granting organizations. Families may use the resulting scholarships for expenses at public, private secular, or private religious schools.
 
States must opt in and submit lists of approved scholarship organizations. This process gives state officials an opening to impose additional eligibility requirements that could ice out many religious schools. As EFTC Credit reports, Vermont has already enacted nondiscrimination conditions governing organizations that participate in the federal program. Colorado lawmakers have considered similar legislation.
 
Supreme Court precedents hold that states generally cannot bar religious institutions from public-benefit programs simply because they are religious or use funds for religious education. The question now is whether states may achieve much the same result through conditions framed as neutral nondiscrimination rules.
 
You may disagree with the stringent standards set by the parishes in Colorado, but we should all agree that the First Amendment’s guarantee of the free exercise of religion – and the associational rights of those who share the same beliefs – serves us all, whether your association is with a church, a political party, or the National LGBTQ+ Chamber of Commerce.
 
The First Amendment protects more than the right to hold religious beliefs in private. It also protects religious institutions from government efforts to make them conform as the price of equal participation in public life. In similar ways, it protects the right of every American to believe as we choose.
 
And in that way, it protects us all.

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