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Tax-Exempt Bonds, Religiously Affiliated Institutions and the Establishment Clause

Posted: 29 Aug 2001  

Nina J. Crimm

St. John's University - School of Law


Religiously affiliated institutions may seek financing for projects through revenue bonds issued by a state, its instrumentality, or subdivision. Before approving the issuance of such revenue bonds, the government or governmental agency often places restrictions on the project primarily to reduce the risk of possible violation of federal tax laws and/or of the Establishment Clause of the First Amendment. Professor Crimm explains that in a maze of evolving decisions over many years, the Supreme Court has determined that an impermeable wall between governmental aid and religiously affiliated institutions is not required by the Establishment Clause as long as the legislation authorizing the aid is neutral in purpose and effect. Recently, she reports, several state and federal courts have considered constitutional challenges specifically to the issuance of revenue bonds for the benefit of religiously affiliated hospitals and educational institutions, some considered "previously sectarian." As the disparate holdings in these cases illustrate, the exact boundaries of permissible governmental aid have not been clearly defined. Professor Crimm concludes that these revenue bond cases underscore the need for the Supreme Court to refine its articulation of the appropriate tests for determining acceptable means of and programs for governmental aid to religiously affiliated institutions and to provide a meaningful explanation of the significance of the distinction between direct and indirect governmental aid to sectarian institutions.

Suggested Citation

Crimm, Nina J., Tax-Exempt Bonds, Religiously Affiliated Institutions and the Establishment Clause. Tax Notes, Vol. 92, No. 10, September 3, 2001. Available at SSRN:

Nina J. Crimm (Contact Author)

St. John's University - School of Law ( email )

8000 Utopia Parkway
Jamaica, NY 11439
United States

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