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A $15 million municipal bond issue floated by the city of Nashville, Tenn., to fund a construction loan to a religious university did not violate the establishment clause of the First Amendment, the 6th U.S. Circuit Court of Appeals has ruled. Steele v. Industrial Development Board of Metro. Gov’t. Nashville, No. 00-6646. Dealing with a question yet to be addressed by any other federal appeals court, it ruled, 2-1, that the loan did not excessively entangle government and religion because it did not involve public money and the program is applied to religious and secular institutions neutrally. Quoting the Supreme Court’s 1981 decision in Widmer v. Vincent, the court said, “If the Establishment Clause barred the extension of general benefits to religious groups ‘a church could not be protected by the police and fire departments or have its public sidewalk kept in repair.’” It added, “We conclude the issuance of tax exempt bonds on a neutral basis is the conference of a generally available government benefit.” The Aug. 14 decision overturns a Tennessee federal district court ruling that found David Lipscomb University to be “pervasively sectarian” and that the aid advanced its religious views. Lipscomb applied for the loan in the early 1990s to build a library, sports building, baseball stadium and parking lots. Five area citizens sued on First Amendment grounds. The school’s central mission, according to the court, is promoting Church of Christ doctrine. Students are taught exclusively by church members, are required to attend chapel and are “surrounded by an environment thoroughly saturated by Churches of Christ doctrine.” The 6th Circuit, though, said the vitality of the “pervasively sectarian” test has become questionable, given newer Supreme Court rulings, but it was ultimately up to the high court to decide the test’s future. Regardless of the test’s current standing, the appellate court ruled, the neutral nature of the aid to Lipscomb did not offend the First Amendment. Dissenting, Judge Eric L. Clay said that even though no public funds financed the construction, the government still aided the institution because, without the government, the school could not have received the loan. “That no governmental funds actually reach the coffers of the pervasively sectarian educational institution does not alter for one moment the fact that a direct economic benefit accrues to such an institution as a result of the government’s active participation,” he said. The loan, Clay said, allowed Lipscomb to save about 30 percent on the cost of its projects, and the improvement to its campus allowed it to increase enrollment from 2,500 to 3,000 — thus advancing its religious mission. “[And] even though the loan agreement explicitly prohibits Lipscomb from using any bond-financed facilities for religious purposes,” he said, “there is no way to prevent that from happening here because of [its] religious character.” Karl Dean, Nashville’s director of law, said the government looks at creating new jobs and advancing education — not religion — when it weighs projects like the Lipscomb construction. “Hopefully, it will take this government out of the practice of evaluating an institution’s religious profile,” he said. Plaintiffs’ attorney Joseph H. Johnston said he planned to appeal to the Supreme Court. “This is a watershed case,” he said, “and we are approaching the continental divide.” The 6th Circuit’s decision sets a “dangerous precedent,” he said. “You could use bonds to finance mosques, temples, churches, sanctuaries, cathedrals, the whole nine yards,” he said. “There’s no limit.”

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