The decision, as argued from the court, seems very reasonable and does not suggest that states have a compelling interest barring churches from seeking public funds for projects that other non-profit organizations would receive.
This isn't a violation of the first amendment, in fact, the opposite: The first amendment specifically protects organizations from discrimination on the basis of religion.
”The free Exercise Clause ‘protects religious observers against unequal treatment' and subjects to the strictest scrutiny laws that target the religious for ‘special disabilities' based on their religious status[.]"
(...)
Apply that basic principle, this court has repeatedly confirmed that denying a generally available benefit solely on account of religious identity imposes a penalty on the free exercise of religion that cant be justified only be a state interest ‘of the highest order.'"
I agree with the court here.
If the court rules otherwise, then imagine that churches would not be able to receive state or federal grants on something like solar panels, either, which are available to for profit corporations, private citizens, and other tax-exempt non-profits. It doesn't seem like this ruling would change anything in regard to tax incentives, as churches (and other non-profits) are mostly institutionally tax exempt, so they still wouldn't get a "Tax rebate" for a tax they're not paying, this is just for grants that are available to other organizations regardless of tax status. In this case, I agree with the court, if a grant is available to other non-profit tax exempt organizations, then you shouldn't be able to discriminate based on religion.
