The Indiana Supreme Court on Tuesday unanimously upheld the nation's broadest school voucher program, which gives poor and middle-class families public funds to help pay private school tuition.
Opponents, including the state teachers' union, had sued to block the program on grounds that nearly all the voucher money has been directed to religious schools.
Voucher systems have drawn criticism across the United States from critics who say they drain money from public schools and subsidize overtly religious education. Supporters say they offer families greater choice on where to educate their children.
In a 5-0 vote, the Indiana justices said that it did not matter that funds had been directed to religious schools, so long as parents - and not the state - decide where to use the tuition vouchers.
"Whether the Indiana program is wise educational or public policy is not a consideration," Chief Justice Brent Dickson wrote. The program is constitutional, he wrote, because the public funds "do not directly benefit religious schools but rather directly benefit lower-income families with school children."
The U.S. Supreme Court used similar reasoning in a 2002 ruling upholding a voucher program in Cleveland. Since then, voucher programs have been challenged in state, rather than federal, court. But opponents have found it an uphill climb.
Just last month, a state appeals court in Colorado upheld a voucher program that helped parents in one of the wealthiest U.S. counties pay private school tuition. The case is on appeal to the Colorado Supreme Court. Another closely-watched voucher case is pending in the Louisiana Supreme Court; a ruling is expected soon.
The Indiana voucher program is considered the broadest in the United States because it is not limited to low-income students or those attending failing schools - and because it is available to children statewide. A family of four with a household income of $64,000 a year is eligible for vouchers worth up to $4,500 per child.
Though more than half a million students in Indiana are eligible for the vouchers, just 9,000 enrolled this school year. Most are from urban communities with struggling public schools, but a sizeable slice live in rural and suburban neighborhoods as well.
Republican Governor Mike Pence has pushed to expand the program by opening eligibility to special-needs students and children in military families if their household income is as high as $85,000 for a family of four.
The Indiana legislature is also considering a bill that would give vouchers to kindergarten students who meet the income guidelines. The program currently requires students to spend a full year in public schools before they are eligible for a voucher.
Nationwide, vouchers are used by more than 100,000 students in a dozen states, including Florida, Georgia, Ohio and Wisconsin. Several other states use tax credits or education savings accounts to help families pay private school tuition.
Public school advocates have complained that the vouchers subsidize parochial schools that use an explicitly faith-based curriculum.
"Just because the Indiana Supreme Court said it's OK by our constitution doesn't mean this is a good idea," said Teresa Meredith, vice president of the Indiana State Teachers Association and a plaintiff in the case. "I don't believe it's a wise use of public money. It's still, at the end of the day, funding religious instruction" with tax dollars.
Supporters of the voucher program predicted that the ruling would clear the way for a rapid expansion of vouchers in Indiana and nationwide.
"Kids and parents won today," said Robert Enlow, president of the Friedman Foundation for Educational Choice, which supports voucher programs nationally. "Other states should look at this victory and see that the education establishment's ability to obstruct families' freedom to choose is waning."
(Reporting by Stephanie Simon; Editing by Scott Malone, Andrew Hay and Tim Dobbyn)