At a time when the U.S. Supreme Court has opened the door to greater public funding for private religious schools, a lower-court ruling in Colorado could have big implications for the separation of church and state in education.

At the center of the case are two Catholic preschools in suburban Denver that want exemptions from state non-discrimination rules based on sexual orientation and gender identity. The parishes that run the preschools sued the state last year because they didn’t want to have to admit LGBTQ children or children from LGBTQ families if the preschools joined Colorado’s popular new state-funded preschool program.

After a trial in January, a federal judge largely ruled in the state’s favor in June. But the preschools are now appealing — and the case could wind up before the U.S. Supreme Court. The Colorado lawsuit is one of several similar cases unfolding across the country.

If the Catholic preschools win, it’s possible Colorado children could be shut out of some preschools because of their or their parents’ identities.

Brittany, the mother of a 7-year-old transgender girl, choked up as she talked about the lawsuit. Her daughter Naomi is an art-loving, tree-climbing second-grader who enjoys reading Captain Underpants books and playing pretend with her little sister, who is 4.

“It’s so upsetting that there’s so much hate for our kids,” said Brittany, who is not involved in the lawsuit but represents the kind of family that could be affected by it. She spoke on the condition that her last name not be published to protect her family’s privacy.

“These kids are just kids. They don’t have a political agenda.”

Colorado invited religious preschools to join state program

As Colorado leaders prepared to roll out universal preschool last fall, they invited public and private preschools across the state to join the program. Among them were St. Mary Catholic Virtue School in Littleton and Wellspring Catholic Academy of St. Bernadette in Lakewood, the two schools now at the center of the lawsuit.

The “mixed delivery” approach — meaning public and private schools can participate — helped ensure there were enough seats for all of the Colorado families that wanted one.

This year, about 41,000 4-year-olds are getting tuition-free preschool through the program.

But the Archdiocese of Denver wouldn’t let most of the 36 preschools it oversees sign off on the state’s non-discrimination agreement, a requirement to participate.

The sticking point was the agreement’s protections for people based on sexual orientation and gender identity. Officials from St. Mary’s and other religious preschools raised their concerns during meetings with state preschool leaders before the program launched.

That’s when state leaders mentioned an idea they had come up with to allow religious preschools that joined universal preschool to reserve some or all of their seats for members of their congregations, according to testimony from the trial.

But the Catholic preschools instead wanted the state to exempt them from the parts of the non-discrimination rule covering sexual orientation and gender identity. State officials refused, saying those protections were part of state law.

“In a sense, church leaders want to have their cake and eat it too,” said Bob Shine, associate director of New Ways Ministry, a Catholic group based near Washington, D.C., that advocates for LGBTQ inclusion.

“They want public funding because in most cases the church cannot sustain a lot of its educational or charitable efforts now, so they need the government money, but they don’t want any of the conditions that come with (it).”

In Denver, the archdiocese this month announced the impending closure of Wellspring and two other Catholic schools because of declining enrollment and financial problems. Last year, the archdiocese closed a K-8 school in Aurora.

Supreme Court grows more sympathetic to religious liberty claims

In recent years, the U.S. Supreme Court has become more conservative and more sympathetic to religious liberty claims, often at the expense of arguments favoring a strict separation of church and state.

In a landmark 2022 Maine case called Carson vs. Makin, the high court ruled that religious schools can’t be excluded from publicly funded programs if secular private schools are allowed to participate. But the court didn’t clearly address whether states could require those religious schools to agree to non-discrimination rules to participate.

“That, then, tees up this tension,” said Robert Kim, executive director of the Education Law Center. “The religious schools are arguing … ‘Having to abide by those non-discrimination policies violates our religious rights.’ ”

In the Colorado case, Senior U.S. District Judge John L. Kane disagreed with the Catholic preschools on that point in his ruling.

He wrote of Colorado’s non-discrimination rules: “The purpose of the requirement is not to invade religious freedom but to further the implementation of a strongly embraced public value.”

Sarah Taitz, constitutional legal fellow at Americans United for Separation of Church and State, said court decisions often hinge on whether states apply non-discrimination rules in a “neutral and generally applicable” way.

In his 101-page opinion, Kane concluded the state met that threshold.

Mom relieved by ruling on LGBTQ inclusion

Brittany, Naomi’s mother, said she and other parents she has talked to were relieved by Kane’s decision upholding protections based on sexual orientation and gender identity.

“We were really happy that the ultimate ruling that came out was that you can’t discriminate against our community,” said Brittany, who runs a monthly park play group for transgender children and started the Denver chapter of the national group TransParent.

Brittany said her family was lucky because when Naomi came out as transgender at age 4, the teachers at her private preschool were supportive. They even helped with Naomi’s social transition at school, including the switch in pronouns and her name change. The family has found the same openness at their public elementary school in Denver.

In kindergarten and first grade, Naomi told her entire class — with teachers facilitating the conversation — that she was transgender and answered questions from classmates.

“She came home happy and excited and said, ‘Mom, I told my whole class that I was trans, and they’re all still my friends,’ ” she said.

When sharing about her daughter’s gender identity, she said, “It’s never the kids that we worry about.”

Brittany said her in-laws are practicing Catholics, and when she and her husband broke the news about Naomi’s gender identity, they felt a twinge of uncertainty.

“Specifically because of their faith, we weren’t sure what their reaction was going to be,” she said. “They just told us that they love her no matter what and have been champions for her and other kids like her.”