School choice has been a hot political issue this year, and now it is firing up the courts as well. The U.S. Supreme Court has long held that the Establishment Clause allows the government to include religious options in school choice programs. But it is still unclear whether the government may exclude religious options from these programs. A case now at the Montana Supreme Court, Espinoza v. Montana Department of Revenue, raises this issue. 

Espinoza involves Montana’s new tax-credit scholarship program, enacted in 2015. The program encourages people to donate to private scholarship programs for low-income families, in exchange for a modest $150 tax credit. Soon after the program passed, however, the State Department of Revenue enacted a rule limiting scholarships to only families choosing nonreligious schools. The Department justified this rule on Montana’s “Blaine Amendment,” which prohibits “a “direct or indirect appropriation or payment from any public fund” from aiding religious institutions. Mont. Const. Art. X, § 6. 

Last year, a Montana trial court ruled that the Department’s rule was ultra vires as it contradicted the will of the legislature and it was not required by the Montana Constitution. As the court ruled, tax credits are not public appropriations, but instead simply allow taxpayers to keep more of their own money. This holding is backed up by the unanimous conclusion of courts across the country, including the U.S. Supreme Court. If the Montana Supreme Court disagrees, however, and finds that the Department’s rule is in fact required by Montana’s Blaine Amendment, then the Court will have to squarely address whether the federal Free Exercise and Establishment Clauses allow the government to discriminate against families choosing religious options. They do not.

One of the central tenets of the Religion Clauses is government neutrality toward religion, and the U.S. Supreme Court has consistently held that either a primary discriminatory purpose or a primary discriminatory effect is sufficient to violate both clauses. Here, excluding religious options from school choice programs has both the purpose and the effect of discriminating against religion. This conclusion is supported by Trinity Lutheran Church v. Comer, 137 S. Ct. 2012 (2017), decided last summer. Trinity Lutheran held that excluding a religious daycare from Missouri’s grant program for playground resurfacing, just because the daycare was religious, violated the Free Exercise Clause.  As the Court reasoned, Missouri’s program “expressly discriminates against otherwise eligible recipients by disqualifying them from a public benefit solely because of their religious character” and “religious status.”  Id. at 2021. 

The same is true of Montana’s rule. The rule excludes religious schools from participating in the school-choice program solely because of their religious status. The rule also discriminates against religious parents who wish to send their children to a religious school that aligns with their beliefs. Instead, the rule forces parents to choose between their beliefs and receiving hundreds or even thousands of dollars in scholarship funds. This is exactly the type of coercive choice condemned by Trinity Lutheran. 137 S. Ct. at 2024. Such hostility toward religion is impermissible.

If the Montana Supreme Court disagrees, however, this case is likely to go to the U.S. Supreme Court. The Montana Supreme Court will be hearing arguments in the case on April 6, 2018.


Erica Smith is an attorney with the Institute for Justice.