WASHINGTON -- The Supreme Court ruled yesterday that states cannot create separate school districts to meet citizens' special needs that spring from their religious views, unless the state is specifically neutral towards the religion.

The high court's decision struck down a 1989 New York State law that created a separate school district for the Satmar sect of Hasidic Jews in Orange County. The court ruled that the state effectively granted political power to the Satmar community without exercising religious neutrality.

The 6-to-3 decision in Board of Education of Kiryas Joel Village School District v. Grumet held that the school district violated the Constitution's establishment clause, which prohibits government from making laws that aid or hurt religion.

Writing for the majority, Justice David Souter said New York's "unusual act is tantamount to an allocation of political power on a religious criterion." The state delegated civic authority over public schools to a group "defined by its character as a religious community, in a legal and historical context that gives no assurance that governmental power has been or will be exercised neutrally," Souter said.

"We are extremely pleased with the Supreme Court's decision," Louis Grumet, executive director of the New York State School Boards Association, said in a telephone interview. "What they have done clearly is to strongly uphold the separation of church and state, and assured that we will not see a host of public funding for religious purposes for any religious group in the country that might want it."

Grumet and Albert W. Hawk, the school board association's president, challenged the New York law as individual taxpayers and on behalf of the association because they said the act helped advance the sect's religion. The high court upheld lower court findings that creation of the district formed a "symbolic union" between the state and the Satmars.

Grumet said upholding the New York law would have meant that any state could set up school districts with public funding and taxing authorities to meet religious precepts. Parochial schools attended by almost a million students in New York State theoretically could have become public school districts, he said.

The case arose out of the village of Kiryas Joel's need for special secular education services for the sect's handicapped children, who are entitled to public funding under federal and state disabilities laws.

Children from Kiryas Joel who suffered from physical, mental, or emotional disorders attended school in the nearby public Monroe-Woodbury Central School District in the mid-1980s. However, parents eventually withdrew the children, citing the "panic, fear and trauma" caused by cultural barriers. The language, dress, and other barriers derived from Satmar religious views and prompted the New York legislature to create the school district by special act.

The district had been serving about 40 full-time Hasidic students and 80 to 120 part-time students who live within and outside the village, the high court noted.

The state law does not expressly identify the sect by religion as recipients of governmental authority, but it "effectively" does so, the high court said. The New York legislature knew the village was exclusively Satmar when it passed the 1989 law, and the fact that the district served a small number of local residents was "anomalous" because New York tends to consolidate rather than divide school districts, the court said.

"Because the district's creation ran uniquely counter to state practice," and because exercise of neutrality would have dictated a different result, "we have good reasons to treat this district as the reflection of a religious criterion for identifying the recipients of civil authority," the court said.

The high court said a fundamental constitutional issue in the case was the failure of New York to treat similarly situated groups in the same way.

In a concurring opinion, Justice Sandra Day O'Connor said, "There is nothing improper about a legislative intention to accommodate a religious group, so long as it is implemented through generally applicable legislation."

The court majority said alternatives are available to Kiryas Joel, because the Constitution is not so rigid that it denies states any chance to accommodate religious needs by casing special burdens.

For example, the Monroe-Woodbury district can offer bilingual and bicultural special education to Satmar children at a public school already run by the district or at a "neutral site near one of the village's parochial schools," the court said. In addition, the state could enact general legislation tightening its mandate to school districts to offer bilingual, bicultural, and other special education services, the court said.

Abraham Wieder, president of the Kiryas Joel Board of Education, said the board has begun discussions with New York Gov. Mario Cuomo and the legislature on alternatives. The ruling "is a setback, not the end," of the sect's pursuit of"a suitable way to provide a quality education for the most vulnerable of our children," Wieder said in a statement.

Justice Harry Blackmun said in a concurrence that the ruling does not depart from a 1971 test that the court set in Lemon v. Kurtzman, which imposes three requirements for government action under the establishment clause: the action must have a secular legislative purpose, its primary purpose must neither advance nor inhibit religion, and it must not foster excessive government entanglement with religion.

But O'Connor said a slide away from the test is "well under way," because the court is addressing "specific nuances."

Justice Antonin Scalia filed a barbfilled dissent in which Chief Justice William Rehnquist and Clarence Thomas joined. Scalia accused the majority of confusing religious tolerance with religious establishment.

But Souter responded by referring to former Justice Benjamin Cardozo's 1931 description of a dissenter as "'the gladiator making a last stand against the lions.'" Scalia's dissent "is certainly the work of a gladiator, but he thrusts at lions of his own imagining," Souter said.

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