The state of Vermont has a program that pays tuition for high school students to take courses at private colleges. The Second Circuit has ruled that the Vermont violated the Free Exercise Clause of the First Amendment in refusing to pay tuition for students to take courses at religious colleges.
The case is A.H. v. French, issued on January 15. Under Vermont law, a school district violates the state constitution by reimbursing tuition for sectarian, or religious, schools. That requirement violates the Free Exercise [of religion] Clause, the Court of Appeals (Walker and Menashi) says.
Prior Supreme Court cases have restricted how states may deny financial benefits to religious institutions when comparable secular activities may be subsidized. In Trinity Lutheran Church v Comer (2017), the Court said Missouri violated the Free Exercise Clause when it denied subsidies to religious institutions for playground resurfacing while providing that funding to nonreligious institutions. In Espinoza v. Montana Dept. of Revenue (2020), the Court said the state could not prohibit the use of scholarship funds to support sectarian schools. You can really see the trend in Supreme Court jurisprudence in this area. Forty years ago, these programs would likely have been upheld under the Free Exercise and Establishment Clauses. But the courts have changed and the Supreme Court has grown more conservative in recent times, making it more difficult for the government to restrict public moneys to religious institutions.
These recent Supreme Court cases guide the Second Circuit's reasoning in this case. The Circuit holds that while students get tuition subsidies for secular private schools, that money is denied to students who want to attend schools based on those schools' religious status. That school is thus penalized because of its religious affiliation, and the plaintiffs have the unconstitutional choice between sending their child to a religious school and foregoing the benefits or sending the student instead to a non-religious school. The Court says the state has not identified a compelling reason for this restriction. That means the plaintiffs gets a preliminary injunction that prevents the state from denying tuition benefits for that reason.
An interesting side-note to this case. The Supreme Court said many moons ago that appellate courts must independently review the evidence in free speech cases to ensure the First Amendment is not compromised by trial courts who normally have discretion to view the facts as they see fit. The Second Circuit extends that unique rule to cases that implicate the religion clauses of the First Amendment, as well. Other Circuits have done this, and the Second Circuit does it as well.