Espinoza v. Montana Dept. of Revenue

2020-06-30

Headline: Court blocks Montana's ban on using education tax-credit scholarships at religious schools, allowing parents to use scholarships at religious private schools and restoring the state's school-choice tax credit program.

Holding: The Court held that Montana's no-aid rule, as applied to bar religious schools from a tax-credit scholarship program, violates the Free Exercise Clause because it discriminates based on religious status.

Real World Impact:

Allows parents to use tax-credit scholarships at religious private schools.
Limits state no-aid rules that bar benefits solely for religious status.
Could prompt changes to scholarship programs and state rules on funding.

Topics: school choice, religious schools, education tax credits, free exercise rights, state no-aid rules

Summary

Background

In 2015 the Montana Legislature created a tax-credit scholarship program to help parents pay tuition at private schools. Taxpayers could claim up to $150 for donations to scholarship organizations like Big Sky Scholarships. Families who won scholarships could choose almost any private school, and the organization sent money directly to the school. The Montana Department of Revenue adopted a rule barring use of scholarships at religious schools. A trial court enjoined that rule, but the Montana Supreme Court held the whole program violated the State Constitution’s no-aid ban on funding schools controlled in whole or in part by churches and invalidated the program.

Reasoning

The U.S. Supreme Court accepted the Montana court’s interpretation that the program amounted to state aid but asked whether applying the no-aid rule to block religious schools violated the Free Exercise Clause. Writing for the majority, Chief Justice Roberts held that Montana’s rule discriminated based on religious status and therefore triggered strict scrutiny under Trinity Lutheran. The Court concluded Montana could not exclude religious schools simply because they are religious. The majority reversed the Montana Supreme Court and remanded for further proceedings.

Real world impact

The ruling allows parents to use tax-credit scholarships at religious private schools if the program operates as written. State constitutional no-aid provisions cannot be applied in a way that disqualifies recipients solely for being religious. The decision restores the scholarship program’s legal status, subject to further proceedings on remand.

Dissents or concurrances

Justices disagreed. Some argued history and anti-establishment concerns (Breyer) or that striking the whole program left no unequal treatment (Ginsburg). Other Justices wrote separate opinions about the Blaine-era origins and broader implications.