The Cleveland City School District enrolled more than 75,000 children, the majority from low-income and minority families, and had been among the worst performing public schools in the nation for more than a generation.
In 1995, a federal district court declared a crisis and placed the district under state control, after which the state auditor found an unprecedented crisis in American education. Shortly thereafter, Ohio enacted the Pilot Project Scholarship Program to provide financial assistance to families in the district.
The program offers tuition aid for students in kindergarten through eighth grade to attend participating public or private schools of their parents' choosing and tutorial aid for students remaining in public school. Tuition aid is distributed to parents based on financial need, with low-income families receiving priority and up to 90 percent of tuition costs covered, and checks are made payable to parents who endorse them to the chosen school. Any private school within the district meeting statewide standards may participate, as may public schools in adjacent districts, and participating schools may not discriminate on the basis of race, religion, or ethnic background.
In the 1999-2000 school year, 56 private schools participated, 46 of which had a religious affiliation, and more than 3,700 students took part in the scholarship program, with 96 percent enrolling in religiously affiliated schools. The program operates alongside community schools, which are publicly funded but independently run and may not have religious affiliation, and magnet schools emphasizing particular subjects or methods, which together enrolled thousands of additional students.
Respondents, a group of Ohio taxpayers, first challenged the program in state court in 1996 on state and federal grounds. The Ohio Supreme Court rejected the federal claims but found a procedural violation under the state constitution that the legislature promptly cured. In July 1999, respondents filed suit in federal district court seeking to enjoin the program on Establishment Clause grounds. In December 1999, the District Court granted summary judgment for respondents. In December 2000, a divided panel of the Court of Appeals affirmed the judgment of the District Court, finding that the program had the "primary effect" of advancing religion in violation of the Establishment Clause. The Supreme Court granted certiorari, 533 U. S. 976 (2001), and reversed the Court of Appeals.
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