The U.S. Supreme Court case Committee for Public Education & Religious Liberty et al. v. Nyquist, Commissioner of Education of New York, et al., 1972 revolved around the constitutionality of a New York State law that provided financial aid to nonpublic schools and parents who sent their children to such institutions. The majority of these schools were religiously affiliated, primarily with the Roman Catholic Church. The plaintiffs argued that this violated the Establishment Clause in the First Amendment which prohibits government from making any law "respecting an establishment of religion." In a decision delivered by Justice Lewis F Powell Jr., the court ruled in favor of Committee for Public Education & Religious Liberty (8-1), stating that providing direct monetary aid to religiously-affiliated educational institutions indeed constituted a violation against said clause as it promoted 'excessive entanglement' between state and church.

In the dissenting opinion for Committee for Public Education & Religious Liberty et al. v. Nyquist, Commissioner of Education of New York, et al., Justice William Rehnquist argued that the majority's decision to strike down New York State's tuition reimbursement and tax credit programs was an overextension of the Establishment Clause in First Amendment jurisprudence. He contended that these programs did not constitute a government endorsement or advancement of religion but were rather neutral aid measures designed to support all parents - regardless if their children attended public or private schools. In his view, such assistance should be seen as permissible under the Constitution because it is given without regard to whether recipients are religiously affiliated institutions or individuals; instead, it is based on financial need and parental choice about where best to educate their children.