By Marie Failinger
Marie A. Failinger is a professor of law at Mitchell Hamline School of Law. She was the editor-in-chief of the Journal of Law and Religion for more than 25 years, and has published books and articles on law and religion, including several focused on Lutheran theology and law.
Espinoza v. Montana Department of Revenue, which the U.S. Supreme Court will be reviewing in the October 2019 term, is a complicated case apart from its federal constitutional implications. In simple terms, the Montana legislature set up a program that, among other things, permits individuals to donate money to a qualified scholarship program for children in private schools, and to receive a dollar-for-dollar credit for these donations up to $150 against their state tax liability.
The Montana Supreme Court acknowledges the state has an especially broad prohibition in its Constitution against any “direct or indirect appropriation or payment” to religious schools and other religious institutions. The Montana Department of Education attempted to fix the scholarship scheme to make it conform to the Constitution’s “no religious aid” provision by promulgating Rule 1, a regulation prohibiting tax credits for scholarship money going to religious schools. The Montana Supreme Court held that the entire program violated Montana’s constitutional prohibition against aiding sectarian institutions, and that the state regulators could not fix it by rule-making. The Court noted that citizens could give money to any scholarship program that they wished; they simply could not constitutionally get a tax credit—in essence a government subsidy—for their donations. The case was appealed by taxpayers who argued under the Establishment Clause, Free Exercise Clause, and Equal Protection Clause that they should be able to give their money to sectarian scholarship programs and get their tax credits just like those taxpayers who donate to non-sectarian scholarship programs.
Why Espinoza Matters
Espinoza sets up yet another collision course between the Court’s streams of jurisprudence on Establishment/Free Exercise Clause cases. As it has in some recent Religion Clause cases like Masterpiece Cakeshop, the Court may choose the narrowest course—placing Espinoza somewhere on the continuum of past tax-related subsidy cases. On one end of the spectrum, in Committee for Public Education and Religious Liberty v. Nyquist, the Court used the Lemon test to strike down a statute providing tuition tax credits to parents of private school children. On the other end of the spectrum, in Mueller v. Allen, the Court permitted Minnesota to give a tax deduction to all parents for school expenses, whether those expenses were for public or private, sectarian or non-sectarian schools. If the Court places Espinoza on the Nyquist end of the spectrum, acknowledging that the scheme is problematic under the federal Establishment Clause as well as Montana’s, the case is probably over. If the Justices decide that there is no federal Establishment Clause problem, the Court will still need to rule on whether Montana’s state Establishment Clause provision violates the Equal Protection, the Free Exercise or possibly the Establishment Clause of the United States Constitution.
More likely, the Court will pursue the stream of recent Establishment and Free Exercise Clause jurisprudence that describes state prohibitions against aid to religious schools as a form of religious discrimination. As the most recent example, in Trinity Lutheran Church of Columbia v. Comer, the Court held that the government unconstitutionally discriminates under the Free Exercise Clause if it prohibits religious institutions from being eligible for general programs that similar non-religious organizations could apply for.
The Social Considerations Behind Cases Like Espinoza
From a broader social and jurisprudential perspective, however, the question centers on this: parochial schools are in trouble in America. The number of children attending Catholic schools plummeted from 5 million in 1960 to 1.8 million today, and the fifty percent of its schools closed by 2014. Among the possible explanations: dwindling numbers of Americans involved in organized religion; liberal reactions to parents’ use of private schools to avoid desegregation; and the rising cost of tuition as priests, nuns, and low-paid teachers have been replaced with educators expecting more realistic wages. Perhaps most significantly, in many denominations, the traditional model of congregational support for parochial schools, which spread the cost of education through the generations, has been replaced with a model in which parents are expected to shoulder the tuition bill for their children.
Looking Forward: Which direction will the Supreme Court choose?
Will the Supreme Court recognize the parochial school as an endangered species and support the use of tax credits to alleviate the tuition burden on parents who want to make that choice for their children? Will it reiterate the arguments of previous cases that parochial/private schools are a social good since they provide benchmarks for the quality of education in public schools, and school choice for parents who have qualms about their public schools, whether religious or not? Or will the Court again recognize that states have some “play in the joints” to craft their Establishment Clauses more restrictively than the federal Establishment Clause, whether as a matter of federalism or good policy? Finally, might the Court return to James Madison’s “voluntary principle,” recognizing that state subsidization of parochial education can entice these schools to be even more secular than they are, as they attempt to attract non-religious as well as religious parents to their schools with tax credits? The direction the Court sets will certainly define Establishment Clause jurisprudence for a generation, and may significantly expand Free Exercise and Equal Protection law for religious institutions as well.
 435 P.3d 603 (2018).
 Mont. Cont. art. X, §6.
 Mont. Admin. R. 42.4.802 (2019).
 Espinoza, 435 P.3d at 628.
 Id. at 612–13.
 Espinoza v. Mont. Dep’t of Revenue, 2018 MT 306, ¶ ¶ 4–12 393 Mont. 446, 435 P.3d 603. The writ of certiorari was granted on June 28, 2019. See Espinoza v. Mont. Dep’t of Revenue, 139 S. Ct. 2777 (2019).
 Masterpiece Cakeshop Ltd. v. Colorado Civil Rights Commission, 138 S. Ct. 1719 (2018).
 413 U.S. 756 (1973).
 463 U.S. 388 (1983).
 137 S.Ct. 2012 (2017). In this case it was for refurbishing a Lutheran preschool’s playground surface with rubber chips. The Court found this discrimination imposed a penalty upon the church, forcing it to choose between participation in a government program and its religious character. Id. at 2021.
 Betsy Shirley, The Era of the Parochial School is Over, America The Jesuit Review (Feb. 4, 2019), https://www.americamagazine.org/faith/2019/01/25/era-parochial-school-over-meet-catholic-educators-searching-whats-next [https://perma.cc/8QSF-BFRW]. While statistical evidence on Protestant schools is harder to find, it is clear that in many communities Protestant schools are closing as well.
 See id.
 James Madison, Memorial And Remonstrance Against Religious Assessments 5 The Founders’ Constitution (1785), http://press-pubs.uchicago.edu/founders/documents/amendI_religions43.html [https://perma.cc/TE7W-BCU2].