CONTACT:     GREGORY S. BAYLOR, 703-642-1070 x3502

CHRISTIAN LEGAL SOCIETY ASKS CALIFORNIA SUPREME COURT TO REINSTATE EQUAL BENEFITS TO RELIGIOUS SCHOOLS

Lower Court Held that State Constitution Required Discrimination Against Religion

SACRAMENTO, CA – The Christian Legal Society’s Center for Law & Religious Freedom filed a “friend of the court” brief in the Supreme Court of California on Wednesday in California Statewide Communities Development Authority v. All Persons Interested.  The brief argues that California should not use a church-state provision in its constitution to discriminate against intentionally religious schools by denying them the benefits of tax-exempt bond financing.

Azusa Pacific University, California Baptist University, and the Oaks Christian School, three religious schools, applied with California Statewide Communities Development Authority (CSCDA) in 2002 for tax-exempt bond financing.  CSCDA is a state agency that offers tax-exempt bond financing to institutions, including private schools, for the development of projects intended to benefit the public.  CSCDA acts as a “conduit” through which schools may borrow money from private investors at a lower interest rate because the lender's earnings are tax-free.  CSCDA charges borrowers a fee for its services, and state funds are not lent to the borrowers.

CSCDA asked a state trial court to review the proposed transactions with the three schools and to deem them constitutionally permissible.  The trial court held that Article XVI, Section 5 of the California Constitution forbids CSCDA from giving these three educational institutions the same access to conduit financing available to other schools.  CSCDA appealed, and the California Court of Appeal agreed with the lower court that the California Constitution required discrimination against the schools on the ground that they were “pervasively sectarian.”  The California Supreme Court accepted CSCDA’s request to review that decision.

In its brief, the CLS Center recounts the anti-Catholic roots of Article XVI, Section 5 and other constitutional provisions adopted in the mid-nineteenth century.  The brief also argues that decades of cases interpreting the state constitutional provision demonstrate the legality of the proposed transactions.  The brief further explains that virtually every state – even states with constitutional provisions similar to California’s – extends the benefits of tax-exempt bond financing to religious schools.

The Center filed the brief on behalf of the Christian Legal Society and the Council for Christian Colleges & Universities (CCCU).  CCCU is an international higher education association of intentionally Christian colleges and universities.  Azusa Pacific University and California Baptist University are among its 100 U.S. member institutions.  Eight additional CCCU member and four affiliate institutions are located in California.  If the Supreme Court of California affirms the lower court decision, 14 CCCU members and affiliates will likely be denied the same access to conduit financing available to other California institutions of higher education.

“The essence of religious freedom is government neutrality towards religion.  Giving religious schools the same access to conduit financing is completely consistent with our nationwide commitment to respecting America’s religious diversity,” said Gregory S. Baylor, Director of the Christian Legal Society’s Center for Law & Religious Freedom.  “The lower courts’ decisions are yet another example of an all-too-frequent occurrence:  discrimination against religion in the name of ‘separation of church and state,’” continued Baylor.  “We are hopeful that the California Supreme Court will embrace a better understanding of church-state relations and overturn the lower courts’ discrimination against religious schools,” said Baylor.

The Alliance Defense Fund provided funding for the Center’s work on this case.

The Christian Legal Society, founded in 1961, is the national membership organization of Christian attorneys, judges, law professors and law students, as well as supportive laypeople in all fifty states. They are organized in more than 1100 cities into attorney chapters, law student chapters, and fellowships throughout the United States.