Laws that allowed the State to
pay part of the salaries for private school teachers were passed in
Pennsylvania (Nonpublic Elementary and Secondary Education Act) and Rhode Island (Rhode Island
Salary Supplement Act).
The laws were
facially-neutral in that they allowed any private school to apply for
reimbursement.
However, the majority of
the private schools were Catholic schools.
Lemon and others sued,
claiming that the use of tax money to fund religious schools was a
violation of the Establishment Clause
of the 1st Amendment.
The US Supreme Court found
both laws to be unconstitutional.
The US Supreme Court found
that the laws did not discriminate among religions.
If they did, then they
would have to meet strict scrutiny
review.
See Larson v. Valente (456 U.S. 228 (1982)).
The Court found that laws
that were non-discriminatory must meet a three-pronged test:
The government's action
must have a secular legislative purpose,
The government's action
must not have the primary effect of either advancing or inhibiting
religion,
The government's action
must not result in an "excessive government entanglement" with
religion.
In this case, the Court
found that both laws were unconstitutional because they created
"excessive government entanglement".
This three-prong test is now
known as the Lemon Test.
It's a pretty malleable
test, and the provisions are a bit vague. It tends to be invoked when
the Justices want to strike down a practice they don't like, and ignored
when judging the merits of a practice they want to uphold.
While the Lemon Test is still good law, its future is in doubt. A
number of Justices have called for it to be overruled.
See Justice Scalia's
concurrence in Lamb's Chapel v. Center Moriches Union Free School
District (508 U.S. 384 (1993)).