## Facts

- New York enacted N.Y. Educ. Law § 3037 to reimburse nonpublic schools, including church-related schools, for the actual costs of performing specified state-mandated services.
- Covered services included administering standardized tests (prepared by the state or neutral testing agencies) and completing required reporting and record-keeping about school operations (e.g., student body, staffing, facilities, curriculum, and attendance).
- The tests were administered on nonpublic school premises by school personnel, but the schools had no control over test content.
- The statute included an audit mechanism to verify that reimbursements matched only the actual costs of the covered secular services and to prevent diversion of funds to religious uses.
- Organizations and individuals challenged the statute as an Establishment Clause violation because it provided direct cash payments to religious schools for services performed by their employees.
- A federal district court upheld the statute, and the challengers appealed directly to the Supreme Court.

## Issues

1. Whether reimbursing religious and secular nonpublic schools for the actual costs of administering state-mandated tests and performing required reporting and record-keeping violates the Establishment Clause of the First Amendment (as applied through the Fourteenth Amendment).

## Decision

- The Supreme Court affirmed, holding the statute constitutional in a 5–4 decision.
- The Court applied the Lemon test and found:
  - a secular legislative purpose (supporting compliance with statewide educational requirements and maintaining educational quality),
  - a primary effect that neither advanced nor inhibited religion (aid limited to secular testing and administrative functions; schools lacked control over test content or outcomes),
  - no excessive entanglement (audits were limited to verifying actual secular costs and preventing diversion).
- Dissents argued that direct reimbursements to religious schools constituted impermissible support and that auditing would produce continuing entanglement.

## Legal Principles

- Government aid touching religious institutions is evaluated under Lemon: secular purpose, neutral primary effect, and no excessive entanglement.
- Direct reimbursement to religiously affiliated schools may be permissible when confined to demonstrably secular, state-mandated services with safeguards ensuring funds are not used for religious instruction or worship.
- The possibility that reimbursing secular costs may free a recipient’s other funds for religious activity does not, by itself, establish unconstitutional advancement of religion.
- Financial auditing to ensure reimbursements match actual secular costs can be a constitutionally acceptable safeguard when it does not require ongoing supervision of religious content or doctrine.

## Conclusion

The Court upheld New York’s reimbursement program because it was limited to actual costs of secular, state-required testing and administrative tasks and included auditing safeguards that prevented diversion to religious uses without creating unconstitutional church–state entanglement.


Committee for Pub. Educ. & Religious Liberty v. Regan, 444 U.S. 646 (1980)