The U.S. Supreme Court case Levitt, Comptroller of New York, et al. v. Committee for Public Education & Religious Liberty et al., 1972 dealt with the issue of state funding for religious schools and its constitutionality under the Establishment Clause of the First Amendment. The court ruled that a New York law which allowed public funds to be used by private religious schools for administering and grading standardized tests was unconstitutional as it violated the separation between church and state mandated by the Constitution's Establishment Clause. The decision emphasized that while states can provide assistance to parochial schools in some cases (such as bus transportation or secular textbooks), they cannot directly subsidize religious activities or institutions.

In the dissenting opinion for Levitt v. Committee for Public Education & Religious Liberty, Justice Rehnquist argued that the majority's decision to strike down New York State's textbook loan program was based on an overly broad interpretation of the Establishment Clause. He contended that providing textbooks to all students, regardless of whether they attended public or private schools, did not constitute government endorsement or support of religion. Instead, he saw it as a neutral act aimed at promoting education and literacy among all children in the state. Furthermore, he pointed out that many other states had similar programs in place without any constitutional issues being raised. Thus, according to Justice Rehnquist’s perspective, this ruling could potentially have far-reaching implications beyond just New York State.