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Symposium: Espinoza, funding of religious service providers, and religious freedom

Thomas Berg is the James L. Oberstar Professor of Law and Public Policy at the University of St. Thomas (Minnesota). Douglas Laycock is the Robert E. Scott Distinguished Professor of Law at the University of Virginia. They filed an amicus brief on behalf of a number of religious and school groups in support of the petitioners in Espinoza v. Montana Department of Revenue.

Tuesday’s ruling in Espinoza v. Montana Department of Revenue came as no surprise. The Montana Supreme Court had invalidated a state tax credit for donations to organizations supporting students in private schools, solely on the ground that some schools benefiting from the program would be religious. The state court relied for its authority on a state constitutional provision that singled out religious schools for exclusion from generally available funding, however indirect. The U.S. Supreme Court held that this discrimination against religious schools and families who choose them violated the First Amendment’s free exercise clause.

Espinoza continues the court’s strong trend upholding, and now even mandating, equal access to government benefits for religious, as well as secular, service providers. We write to explore what Espinoza suggests for future disputes over funding of religious service providers, and for other questions about the religion clauses.

The majority held that the case was governed by Trinity Lutheran Church v. Comer, which held that excluding churches from eligibility for a generally available benefit violated the free exercise clause. Trinity Lutheran applied strict scrutiny to funding provisions that discriminate against providers simply because they have a religious status or affiliation. But it left open whether to allow provisions that more specifically bar uses of funds for religious purposes — a bar that didn’t apply to the playground-resurfacing aid involved in Trinity Lutheran. If the distinction between status and use were valid, a state might argue that a religiously affiliated K-12 school can benefit from aid if its classes are nonreligious in content but not if they are imbued with religious doctrines or perspectives.

In Espinoza, as in Trinity Lutheran, the majority held — correctly — that the discrimination rested on religious status. The Montana court had broadly forbidden any aid to schools that were “religiously affiliated” or “controlled in whole or in part by churches.” By analyzing that broad prohibition as status-based, Chief Justice John Roberts, writing for the majority, was able to again avoid the question of whether strict scrutiny also extends to discrimination against religious uses.

As in Trinity Lutheran, Justice Neil Gorsuch wrote a concurrence questioning the distinction between religious status and use. He found it equally true “to say that the State’s discrimination focused on what religious parents and schools do — teach religion.” As he pointed out, the “exercise” of religion plainly covers particular actions, such as teaching religion, not just status or identity, such as being a religious school.

Gorsuch could have added another reason why the distinction collapses in the context of religious K-12 education. Religious schools typically teach the same secular subjects as other schools — English, history, science, math — while also teaching a religion class or integrating relevant religious perspectives into the secular subjects. The religious elements could be characterized as religious “uses.” But if a state denies otherwise-available funds for classes on secular subjects because the school also offers these religious elements, then it goes beyond not funding religion. It imposes a penalty on the secular educational activity — potentially a large penalty, if all funds are denied — because of the religious teaching accompanying it. It penalizes the school, and those it serves, because of its religious identity, its religious functions, and some of the uses to which its money is put.

The secular instruction in these schools means that the state gets full secular value for its money. There are complications in putting a dollar amount on this secular value. It might be the schools’ full cost, given that they satisfy compulsory-education requirements. Or some of the cost might be attributed to teaching religion. But one thing we know: the secular value is far more than zero. A $2,250 tuition voucher (the amount involved in the court’s 2002 decision in Zelman v. Simmons-Harris) can easily be allocated entirely to secular value. All the more so in Espinoza, where the tax credit was capped at $150.

The majority said that the Montana rule penalized free exercise “by cutting families off from otherwise available benefits if they choose a religious private school rather than a secular one.” The same penalty occurs if the state substantially denies funds for secular value when that value, or the supporting funds, also has a religious use.

Other aspects of Espinoza also lay the foundation for further rulings prohibiting discrimination against religious choices in funding. The court largely confines the approval of funding denials that was given in Locke v. Davey to cases involving training of clergy, a “distinct category of instruction” different from the overall education that religious schools provide. And it noted that the 19th century movement against aid to religious K-12 schools, which was “checkered” by anti-Catholic prejudice, “hardly evince[s] a tradition that should inform our understanding of the Free Exercise Clause.”

For these reasons, it seems inconceivable that the current majority would allow a state court or legislature to exclude religious providers from a benefit program — of tax credits, vouchers or others — by focusing on religious use instead of religious identity. But Roberts’ continuing incrementalism leaves that possibility open for some new majority if the court’s composition were to change.

Espinoza had a wrinkle: The state court had invalidated the entire tax-credit program, based on an argument that religious schooling could not be fully severed from it. But the Supreme Court properly rejected the notion that this made the state court’s action neutral toward religion. Citing Marbury v. Madison among other cases, the majority held that the state court could not invoke for its sole authority, or give operative effect to, a rule that unconstitutionally discriminated based on religious status. A contrary ruling would have opened the door for state courts to give effect to the most discriminatory state rules and insulate them from federal review.

Espinoza does not fully theorize why discrimination against religious uses of general benefits is unconstitutional. We think it’s because such discrimination violates the fundamental principles, recurrent throughout the court’s religion case law, of government neutrality toward religion and protection of private choice in matters of religion (“voluntarism”). In the context of government benefits, the basic constitutional principles point in the same direction: forbidding government from favoring either religious choices or secular choices. That promotes neutrality in the “formal” sense: giving aid on a religion-blind basis, i.e., without religious classifications. It also embodies voluntarism, or neutrality in the “substantive” sense: i.e., creating neutral incentives that neither discourage nor encourage individuals’ religious choices. Offering benefits but withholding them if the recipient chooses a religious provider creates a powerful incentive against religious exercise.

Formal neutrality (no religious classifications) and substantive neutrality (religiously neutral incentives) work together in the context of government aid. But if they conflict, neutral incentives and voluntarism should be the fundamental goal. The religion clauses treat religion differently from other activities. They do so in order to eliminate, as much as possible, government influence over religious decisions: to leave those decisions, as much as possible, to individuals and the voluntary groups they form.

Critics have sometimes asked whether it is consistent to require equal provision of funds for religious and secular service providers while also allowing, or even requiring, exemptions for religious conduct in the face of generally applicable laws or regulations. Next term the court will take up the question of whether to overrule its decision in Employment Division v. Smith and once again require exemptions in some cases.

If a law creates a conflict with a sincere religious practice, it prevents people from exercising voluntary religious choice and thus violates substantive neutrality. The threat of civil or criminal penalties or loss of government benefits profoundly discourages the prohibited religious practice. Exempting the religious practice from regulation eliminates that discouragement, and it rarely encourages the exempted practice. Nonbelievers will not suddenly start observing Saturday Sabbath because Jews and Adventists are permitted to do so; they will not start traveling by horse-and-buggy or withdrawing their children from high school because Amish are permitted to do so.

Formal and substantive neutrality both suggest equal treatment of religious and secular schools with respect to eligibility for financial aid, because money has the same value for everyone. But most exemptions of religious practices have value only for believers in some particular faith. So even though an exemption is a form of religious category, religious exemptions create neutral religious incentives. For that reason, the court has repeatedly held that exemptions preserve government neutrality toward religious differences that the general law in question does not take into account.

It remains to be seen how the court will relate these categories of cases to each other. It will best promote religious freedom for all if it recognizes that formal neutrality and substantive/incentive neutrality often work together, as they do in cases like Espinoza, but that when they diverge, the fundamental value is neutral incentives — that is, protection of private religious choices.

Recommended Citation: Douglas Laycock and Thomas Berg, Symposium: Espinoza, funding of religious service providers, and religious freedom, SCOTUSblog (Jul. 1, 2020, 6:22 PM),