Can Catholic Schools Reject Children of Same-Sex Parents and Still Receive Taxpayer Funding? Supreme Court Case Explained

Under Colorado’s current rules, a preschool that takes part in the state’s publicly funded Universal Preschool Program (UPK) must give eligible children an equal opportunity to enroll regardless of sexual orientation and gender identity, including the characteristics of the child’s family. In practice, that means a participating school generally cannot turn a child away because the child has two mothers or two fathers.

The Catholic parishes in this case say that requirement conflicts with their religious teaching and with how they build a faith community. They want to join the program without agreeing to it. Colorado refuses to grant a religious exemption.

Two federal courts have sided with Colorado so far. The Supreme Court has not decided the case. What the justices said at oral argument is not a ruling, and the final answer could change the practical rules for religious schools in publicly funded programs.

Quick Facts: St. Mary Catholic Parish v. Roy

Detail	Information
Case	St. Mary Catholic Parish v. Roy
Supreme Court docket	No. 25-581
Court of appeals case	Tenth Circuit, No. 24-1267 (decided September 30, 2025)
District court case	U.S. District Court for the District of Colorado, No. 1:23-cv-02079-JLK
Petition for review filed	November 13, 2025
Review granted	April 20, 2026
Oral argument	November 3, 2026
Petitioners	St. Mary Catholic Parish (Littleton), St. Bernadette Catholic Parish (Lakewood), the Archdiocese of Denver, and Catholic parents Daniel and Lisa Sheley
Respondents	Colorado early-childhood officials, including Lisa Roy
Supporting petitioners	The United States, as amicus curiae
Main constitutional issue	Free Exercise Clause of the First Amendment
Colorado law at issue	Colo. Rev. Stat. § 26.5-4-205(2)(b)
Main precedents	Employment Division v. Smith, Carson v. Makin, Fulton v. City of Philadelphia, Tandon v. Newsom
Is the case a class action or a settlement?	No. It is a constitutional lawsuit.
When will the Court decide?	Typically by the end of the term, in late June or early July 2027.

What Is Colorado’s Universal Preschool Program?

Colorado voters approved Proposition EE in 2020, which created a dedicated funding source for early childhood education. The state then created the Universal Preschool Program, often called UPK.

• Families of eligible four-year-olds receive publicly funded preschool hours, generally about 15 hours a week. Reporting puts the state payment at roughly $6,100 per child per year for the 2026-2027 school year, with state spending of about $360 million.
• The program uses a mixed-delivery system: public school preschools, private providers, child care centers, family child care homes, Head Start and eligible faith-based providers.
• The money follows the child to the participating provider the family picks, and a matching system tries to place children with their preferred choices.
• About 2,000 providers participate, according to the Tenth Circuit’s opinion and reporting on the oral argument. The Archdiocese of Denver operates 34 preschools.

What Does the Colorado Nondiscrimination Law Require?

The key provision is Colo. Rev. Stat. § 26.5-4-205(2)(b). It requires the state’s quality standards to include a rule that participating providers give eligible children an equal opportunity to enroll and receive preschool services regardless of:

1. race,
2. ethnicity,
3. religious affiliation,
4. sexual orientation,
5. gender identity,
6. lack of housing,
7. income level, and
8. disability,

“as such characteristics and circumstances apply to the child or the child’s family.”

That last phrase is why the rule covers a child with same-sex parents even though the child’s own sexual orientation is not in question.

The program also allows certain enrollment preferences, such as school district boundaries, children with Individualized Education Programs (IEPs), Head Start eligibility, siblings, children of employees, continuity of care and language or service needs. Whether those preferences are comparable to the exemption the parishes want is at the center of the case.

Why Did the Catholic Schools Sue?

The Archdiocese of Denver oversees Catholic schools whose mission includes educating children in the Catholic faith. Its schools ask enrolling families to sign a Statement of Community Beliefs, which asks families to understand and support Catholic teaching and the school’s religious mission, including teaching on marriage, sexuality and gender.

According to the trial record described by the courts:

• The schools’ admissions priorities favor parishioners, Catholic families and siblings. They may enroll non-Catholic families, who are expected to respect the school’s religious mission.
• School officials said that when a family’s position on human sexuality conflicts with what the school teaches, they may decide not to enroll the child. They described this as a case-by-case judgment rather than an automatic ban.
• The trial record included evidence that Wellspring Catholic Academy, a Lakewood school connected with St. Bernadette, had previously declined to enroll a fifth-grade student with same-sex parents.
• The Tenth Circuit noted that the parish preschools did not have a categorical rule excluding all children of same-sex parents.

Did a same-sex family apply and get rejected?

This is a detail many summaries miss. The parishes filed their case before signing the state’s participation agreement, because they believed its terms would conflict with their admissions practices. The named parent plaintiffs, Daniel and Lisa Sheley, are Catholic parents whose children attend the St. Mary preschool. They are not a same-sex couple. The case is therefore mostly about future enrollment decisions and what the state may require, not about a specific rejected UPK applicant.

The parishes do not currently participate in UPK. The Archdiocese directed them not to sign the agreement without a religious exemption, which means they forgo the public funding. Some other faith-based providers, including Catholic providers, do participate.

What Did the Lower Courts Decide?

Federal district court (June 4, 2024)

The case was tried in the District of Colorado in a three-day bench trial in January 2024. The plaintiffs raised Free Exercise, Free Speech and Establishment Clause claims.

According to the courts’ opinions, the district court:

• rejected the request for an exemption from the sexual-orientation and gender-identity provisions, finding the requirement neutral and generally applicable and, alternatively, that it would survive strict scrutiny;
• entered a narrow injunction on a separate religious-affiliation issue, because the state then allowed a congregation preference for some faith-based providers (Colorado later eliminated that preference); and
• dismissed claims tied to an employment-related provision that the state had withdrawn.

Tenth Circuit (September 30, 2025)

The Tenth Circuit affirmed in a published opinion (154 F.4th 752). It held that:

• the nondiscrimination rule applies to all providers and is neutral and generally applicable;
• preferences for children with disabilities or low-income children are not equivalent to letting a school exclude children because of a family’s protected characteristics, since those preferences help children get meaningful access to preschool;
• the state does not have unfettered discretion to grant individual exemptions to the equal-opportunity rule; and
• participating religious schools can still teach their faith, use religious curricula and include worship in the school day.

The Tenth Circuit also rejected the expressive-association argument, reasoning in part that preschool children do not shape the school’s religious message and that the issue involved a funding condition rather than compelled speech.

What Is the Supreme Court Reviewing?

The parishes filed their petition on November 13, 2025, and the Court granted review on April 20, 2026, limited to two questions:

1. Whether showing that a law is not generally applicable under Employment Division v. Smith requires proof of unfettered discretion or categorical exemptions for identical secular conduct, or whether other secular exceptions can be enough.
2. Whether Carson v. Makin overrides Smith only when a government explicitly excludes religious people or institutions from a benefit, or also when a neutral-sounding condition has the practical effect of keeping them out.

Did the Court agree to overrule Smith?

No. The petitioners asked the Court to consider overruling Smith, but it did not grant review on that question. Some observers think the justices could still narrow Smith in deciding the accepted questions.

The Law: What Precedents Matter?

Employment Division v. Smith (1990)

Smith, 494 U.S. 872, held that the Free Exercise Clause generally does not require exemptions from neutral, generally applicable laws that incidentally burden religion. Such laws receive ordinary (rational-basis) review. If a law is not neutral or not generally applicable, it must survive strict scrutiny: a compelling government interest and narrow tailoring.

Church of the Lukumi Babalu Aye v. City of Hialeah (1993)

Lukumi, 508 U.S. 520, struck down ordinances that targeted religious animal sacrifice. It teaches that a law that looks neutral on paper can still fail if its design or operation singles out religious conduct.

Fulton v. City of Philadelphia (2021)

In Fulton, 593 U.S. 522, the Court ruled for a Catholic foster-care agency that would not certify same-sex couples. Because Philadelphia’s contract let officials grant individualized exemptions, the policy was not generally applicable, and strict scrutiny applied. The Catholic parishes say Colorado’s flexible enrollment preferences create the same problem. Colorado says its officials cannot grant exemptions from the equal-opportunity rule itself.

Tandon v. Newsom (2021)

Tandon, 593 U.S. 61, held that a law is not generally applicable if it treats comparable secular activity more favorably than religious activity, and that “comparable” is judged by the government’s stated interest. The parishes argue that income, disability and other preferences are comparable secular exceptions. Colorado argues they are not comparable because they further equal access.

The funding cases: Trinity Lutheran, Espinoza and Carson

• Trinity Lutheran Church v. Comer, 582 U.S. 449 (2017): a state could not exclude a church from a public grant program because of its religious identity.
• Espinoza v. Montana Department of Revenue, 591 U.S. 464 (2020): a state could not exclude religious schools from a scholarship program.
• Carson v. Makin, 596 U.S. 767 (2022): Maine could not exclude otherwise eligible religious schools from a tuition-assistance program because they provided religious instruction.

These cases say that when a state chooses to offer a benefit, it generally cannot disqualify religious participants because they are religious. The question here is whether a funding condition that conflicts with religious practice is the same kind of penalty, or a permissible, neutral rule of the program.

Other cases in the background

• Bob Jones University v. United States, 461 U.S. 574 (1983): upheld the denial of tax-exempt status to religious schools with racially discriminatory policies. Colorado’s supporters point to it as an example of a government attaching nondiscrimination conditions to benefits. The parishes’ supporters note that it predates the recent funding cases.
• Masterpiece Cakeshop (2018), 303 Creative v. Elenis (2023) and Kennedy v. Bremerton School District (2022): recent religious-liberty and speech decisions that form the backdrop.
• Mahmoud v. Taylor (2025): involved parents’ religious objections to a public school curriculum.
• Our Lady of Guadalupe School v. Morrissey (2020) and Hosanna-Tabor (2012): the ministerial exception, which protects religious schools’ choices about employees who carry out religious functions. It concerns employment, not admissions, and is not one of the questions before the Court.
• Zelman v. Simmons-Harris (2002): upheld a school voucher program that included religious schools under the Establishment Clause.
• Obergefell v. Hodges (2015): recognized the right of same-sex couples to marry. At oral argument, one justice described the case as a clash between this right and free exercise of religion.

Other constitutional doctrines

The Establishment Clause, the Equal Protection Clause and the unconstitutional conditions doctrine (the idea that government may not condition benefits on giving up constitutional rights) all form part of the surrounding debate. But the Court’s two accepted questions are about free exercise and general applicability, so the decision may not resolve all of them.

What Do Each Side Argue?

The Catholic parishes and their supporters

• The rule is not generally applicable because the program allows many secular preferences and exceptions but refuses a comparable religious one.
• Under Carson and related cases, conditioning a public benefit on abandoning religious practice is a penalty on religious exercise, even if the rule does not mention religion.
• Strict scrutiny applies, and the state’s goal can be met through other means, since families have many other providers.
• Admissions are part of how the schools create a faith community.
• The U.S. government, as an amicus, supports the petitioners.

Colorado and its supporters

• The rule is neutral and generally applicable. It applies to all providers, religious or secular, and religious providers are welcome and may teach their faith.
• Carson involved exclusion of religious schools because they were religious. Here, religious schools are eligible, and the schools choose not to participate because they object to a condition that applies to everyone.
• A state may attach neutral conditions to public funds. Using taxpayer money to subsidize turning children away because of their parents’ identity would undermine the program’s equal-access purpose.
• Disability and income preferences help children get services, so they are not comparable to a religious exemption. Colorado also says the equal-opportunity rule protects Catholic families from being turned away.
• LGBTQ+ rights organizations and others have filed briefs supporting the state.

What Happened at Oral Argument on November 3, 2026?

The justices heard argument on Election Day. The lawyers were Nicholas Reaves (Becket) for the parishes, Sarah Harris, Principal Deputy Solicitor General, for the United States supporting the parishes, and Helen Norton, Colorado’s Deputy Solicitor General.

According to press reports of the argument:

• The three liberal justices questioned the parishes’ position skeptically, while the conservative justices asked friendly or neutral questions. Chief Justice Roberts mostly moderated.
• Justice Kavanaugh said the case pits free exercise against the right recognized in Obergefell, but asked why the conflict arose when Colorado has more than 2,000 providers and the Archdiocese operates only 34. Norton answered that families often choose a preschool by location and hours and that the state has an interest in equal opportunity for all families in publicly funded options.
• Reaves said the schools are trying to build a Catholic community and that, with other providers nearby, the issue is not a common problem in practice.
• Reaves also gave the Court narrower grounds for ruling than overruling Smith.

Please remember: Press accounts differ in emphasis, some come from outlets with a point of view, and the justices’ questions are not a ruling. Check the official transcript on the Supreme Court’s website.

What Could the Decision Mean?

If the Catholic parishes win

States might have to reconsider funding conditions that allow secular exceptions but refuse religious accommodation, and religious schools might be able to keep faith-based admissions practices while receiving public money. The impact would depend on the Court’s reasoning. It would not automatically exempt religious schools from every nondiscrimination rule.

If Colorado wins

States could keep attaching neutral nondiscrimination conditions to public funding, and religious schools could participate and teach their faith but would have to follow the same enrollment rules as other providers.

Possible narrower outcomes

The Court could decide on narrow grounds, such as clarifying what makes a law “not generally applicable,” how to compare secular and religious exceptions, or how far Carson reaches. It could also send the case back to the lower courts.

Who else could be affected?

The ruling could influence voucher and school-choice programs, child care subsidies, foster-care and adoption contracts, and social-service grants that include religious providers. State laws and program designs would still matter.

What Does This Mean for Families in Colorado Now?

• A participating UPK provider must follow the equal-opportunity requirement. A family that believes a participating provider violated it can contact the Colorado Department of Early Childhood about its complaint process.
• The requirement does not guarantee a spot at a particular school. Providers may use lawful enrollment preferences and have capacity limits.
• The case does not decide whether a private religious school that does not take public funding may follow religious admissions policies. Other state and federal laws and religious exemptions may apply.
• Until the Supreme Court rules, the Tenth Circuit’s decision stays in place.

Frequently Asked Questions

Can Catholic schools refuse children of same-sex parents?

A religious school’s admissions rules depend on the law that applies to it. Under Colorado’s current UPK rules, a participating preschool must give equal enrollment opportunity regardless of sexual orientation and gender identity, including the family’s characteristics. The Supreme Court is deciding whether the First Amendment requires an exemption for these Catholic schools.

Can a religious school take taxpayer money and still follow its religious admissions policies?

That is the question before the Court. The Tenth Circuit said Colorado may require participants to follow the same rule. The parishes say the First Amendment protects their right to participate without giving up their admissions practices.

Are the Catholic preschools in this case getting UPK money now?

No. The parish preschools in the lawsuit do not participate because the Archdiocese directed them not to sign the agreement without an exemption.

Does Colorado make Catholic schools change their teaching?

Colorado says it does not. It says religious providers can keep teaching their faith and that its rule is about equal enrollment opportunity.

Did the Supreme Court decide the case on November 3?

No. November 3 was oral argument. The Court has not issued a decision.

Did the Supreme Court agree to overturn Smith?

No. It granted review on two narrower questions and not on whether to overrule Smith.

When will the Court rule?

Most likely by the end of the term in late June or early July 2027.

Is this a class action?

No. It is a constitutional challenge by Catholic parishes, parents and the Archdiocese of Denver.

Why This Case Matters

The case sits at the meeting point of religious liberty, nondiscrimination law and public funding. Colorado says public money for universal preschool should come with equal access for all eligible children, including children of LGBTQ+ parents. The Catholic schools say the First Amendment protects their right to run their schools in line with their faith without losing access to a benefit open to other private providers.

Both positions reflect sincere and serious concerns, and the Court’s answer could shape how states work with religious organizations for years. Until the Court rules, the practical rule in Colorado stays the same.

This article is for general informational purposes only and is not legal advice. AllAboutLawyer.com is an independent U.S. legal information website, not a law firm.

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Sources and Legal Authorities

Case documents and official sources

1. U.S. Supreme Court docket: St. Mary Catholic Parish v. Roy, No. 25-581
2. SCOTUSblog case page: St. Mary Catholic Parish v. Roy
3. SCOTUSblog: Court announces cases it will hear in November, August 2026
4. Colorado Revised Statutes § 26.5-4-205 (quality standards)
5. Tenth Circuit opinion, St. Mary Catholic Parish in Littleton v. Roy, No. 24-1267, 154 F.4th 752 (September 30, 2025); district court findings and conclusions, No. 1:23-cv-02079-JLK (June 4, 2024); merits briefs of the petitioners, respondents and the United States on the Supreme Court docket

Reporting and commentary

6. EWTN News / National Catholic Register: U.S. Supreme Court leans toward Catholic schools in clash over pre-K funding, November 3, 2026
7. Lambda Legal: U.S. Supreme Court hears argument on whether taxpayer-funded preschools can turn away LGBTQ+ families, November 3, 2026
8. The Catholic Herald: Supreme Court considers religious freedom case involving Catholic preschools, November 3, 2026
9. Free Speech Center at MTSU: Religious preschools want public funding but exemptions from nondiscrimination rules

Cases

10. Employment Division v. Smith, 494 U.S. 872 (1990)
11. Church of the Lukumi Babalu Aye v. City of Hialeah, 508 U.S. 520 (1993)
12. Fulton v. City of Philadelphia, 593 U.S. 522 (2021)
13. Tandon v. Newsom, 593 U.S. 61 (2021)
14. Trinity Lutheran Church of Columbia, Inc. v. Comer, 582 U.S. 449 (2017)
15. Espinoza v. Montana Department of Revenue, 591 U.S. 464 (2020)
16. Carson v. Makin, 596 U.S. 767 (2022)
17. Bob Jones University v. United States, 461 U.S. 574 (1983)
18. Obergefell v. Hodges, 576 U.S. 644 (2015)