Tax Gifts to Religious Schools

In the hope of making an end run around the constitutionally forbidden use of tax money to benefit religious schools, the South Bend County Council voted in June to do just that. With Council approval, the city of South Bend spent $1.2 million to buy a half acre site on which an empty Family Dollar store was located. The city intended to transfer the land to the Catholic Diocese of Ft. Wayne-South Bend. St. Joseph’s, a Roman Catholic high school in South Bend, would clear the land and construct a football stadium and parking lot next to the new $35 million school it is building for religious education and sectarian activities.

The Council was pinning its hope on a 2003 Indiana court ruling that “a private school can receive public support if it derives only an ‘incidental’ benefit and offers some public benefit in return.” The public benefit was that in return for the enormous gift to St. Joseph’s, city schools and organizations would be allowed – for ten years – to use the field and parking lot provided they were not being used by St. Joseph’s nor its students and provided the church approved of the community group.

The Council’s defense fails for a number of reasons.

As Gavin Rose, the ACLU-IN attorney argued, it ignores the federal Establishment Clause prohibition against use of government funds to advance religion. The Council had based its vote on the Indiana case, which did not raise this issue. The Indiana case did not involve payment of funds to religious schools, and the state funding supported only secular activity (public school teachers teaching public school classes on private school premises). In the South Bend situation, however, St. Joseph’s would be gifted with highly valuable property for unrestricted use. Further, the “public benefit” is tenuous at best. How often would that field actually be available for others to use?

The ACLU-IN, the national ACLU, and Americans United for Separation of Church and State represented four city taxpayers in a federal court suit, Wirtz v. City of South Bend. Their core arguments were that the city government was showing preference for one religion over another and giving substantial direct aid to a religious institution. U.S. District Judge Robert Miller agreed. He ruled that the plan violated the plaintiffs’ rights under the Establishment Clause and enjoined the transfer of the land.

The ACLU-IN has won its case. The land cannot be gifted to St. Joseph’s. The South Bend Council then asked the court for permission to sell the property to the high school. There was an auction, at which the high school was the only bidder. Their offer was $350,000. This too has now been struck down by Judge Miller as preferential treatment for a religious facility.

The federal court’s demand for government neutrality in matters of religion is an important victory for religious freedom.

– Joan Laskowski
Vice President Legislation
ACLU-Indiana