Espinoza v. Montana Dept. of Revenue

Denying a benefit, generally available, based only on religious identity imposes on the free exercise clause and can only be justified by the highest order of state interest.

The State of Montana created a tax credit for contributions to organizations that provide scholarships to students in qualifying private schools. Department of Revenue (“Department”) barred religious schools from benefiting. Petitioners challenged this guidance. The Montana Supreme Court held that the guidance was justified under Article X, section 6 of the state constitution. Article X, section 6 restricts government from providing aid to any institution “controlled in whole or in part by any church, sect, or denomination.” However, the Free Exercise Clause “protects religious observers against unequal treatment.” Trinity Lutheran Church of Columbia, Inc. v. Comer, 137 S.Ct. 2012, 2019 (2017). The Clause is violated when eligible individuals are excluded from public benefits “solely because of their religious character” unless narrowly tailored to a compelling governmental interest. Trinity Lutheran Church, 137 S.Ct. at 2021-22. The Court held that Article X, section 6(1) as applied here violated the Free Exercise Clause. The Court found that Petitioners were subject to unequal treatment because their intended schools were singled out purely for the schools’ “religious status”; the schools otherwise qualified for the program but for the Department’s exclusion. Further, the discrimination did not further any compelling governmental interest because separation of church and state is not compelling given the already-existent protections of the Establishment Clause. REVERSED.