In 1995, Cleveland’s public schools were performing so badly that a Federal District Court declared a “crisis of magnitude” and placed the entire Cleveland school district under state control.  It was under these circumstances that Ohio enacted its Pilot Project Scholarship Program in 1996 to provide financial assistance to families in any Ohio school district that is or has been under federal court order requiring supervision or management by the state superintendent; only Cleveland’s school district fell into this category.

An initial challenge to the program by a group of Ohio taxpayers resulted in an Ohio Supreme Court decision that found the substance of the program constitutional under both the state and federal constitutions, but found a procedural defect in its enactment. This was quickly fixed by the state legislature, and the program continued without a break.

In July 1999, shortly after the Ohio Supreme Court upheld the substance of the program, a group of Ohio taxpayers represented by the teachers unions filed another challenge to the program, arguing that the financial assistance violated the Establishment Clause of the U.S. Constitution. Opponents of the program argued that because the financial assistance was being used by families to attend private religious schools that the program in effect advanced religion.  The Ohio Supreme Court had earlier rejected this precise argument, but the lower federal courts disagreed.

On June 27, 2002, in a 5-4 decision, the U.S. Supreme Court upheld the program and declared that the financial assistance to eligible families did not violate the Establishment Clause. The majority opinion held that the Ohio program was entirely neutral towards religion and provided benefits directly to a wide spectrum of individuals defined only by financial need and residence in a particular school district.  The Court held that no “aid” reached religious schools except by the free and independent choice of the eligible families.

The Court stated that the program “permits such individuals to exercise genuine choice among options public and private, secular and religious. The program is therefore a program of true private choice,” and thus constitutional.