Missouri launched an initiative in 2012 to encourage schools to use recycled tires to produce safer playground surfaces, but the program triggered a major religious liberty fight.
A preschool run by the Trinity Lutheran Church sued when it was denied a state grant to participate in the program. Its lawyers argued that the state's action constituted religious discrimination in violation of the federal Constitution's Free Exercise and Equal Protection Clauses.
The Court ruled 7 to 2 that the Missouri policy is unconstitutional. Liberal justices Elena Kagan and Stephen Breyer joined some of the conservative justices in questioning the state about what line should be drawn when the church said it planned to use the grant money not for religious activities but to protect children on the playground.
The state defended its decision, citing the Missouri Constitution, which bars churches from receiving state funds.
At arguments, a majority of the justices seemed skeptical of the state's position, particularly because the grants were open to all nonprofits and the funds were not directly funding a religious activity.
Daniel Mach, director of the ACLU's Program on Freedom of Religion and Belief, said the organization is "disappointed" with the decision.
"We're disappointed in today's decision," he said in a statement. "Religious freedom should protect unwilling taxpayers from funding church property, not force them to foot the bill. The court's ruling, however, focuses specifically on grants for playground resurfacing, and does not give the government unlimited authority to fund religious activity."