"Like the disqualification statute in McDaniel, the Department’s
policy puts Trinity Lutheran to a choice: It may
participate in an otherwise available benefit program or
remain a religious institution. Of course, Trinity Lutheran
is free to continue operating as a church, just as
McDaniel was free to continue being a minister. But that
freedom comes at the cost of automatic and absolute exclusion
from the benefits of a public program for which the
Center is otherwise fully qualified. And when the State
conditions a benefit in this way, McDaniel says plainly
that the State has punished the free exercise of religion:
“To condition the availability of benefits . . . upon [a recipient’s]
willingness to . . . surrender[] his religiously impelled
[status] effectively penalizes the free exercise of his
constitutional liberties.” 435 U. S., at 626 (plurality opinion)
(alterations omitted)."
AND:
Trinity Lutheran is not claiming any entitlement to a
subsidy. It instead asserts a right to participate in a
government benefit program without having to disavow its
religious character. The “imposition of such a condition
upon even a gratuitous benefit inevitably deter[s] or discourage[s]
the exercise of First Amendment rights.” Sherbert,
374 U. S., at 405. The express discrimination against
religious exercise here is not the denial of a grant, but
rather the refusal to allow the Church—solely because it is
a church—to compete with secular organizations for a
grant.
This decision is in contrast to the 2015 decision in OBERGEFELL, which shot down DOMA. In that case, Justice Kennedy said that religious institutions could continue to "advocate" and "teach" their religion, but conspicuously left out whether they could "exercise" their religion freely:
Finally, it must be emphasized that religions, and those
who adhere to religious doctrines, may continue to advocate
with utmost, sincere conviction that, by divine precepts,
same-sex marriage should not be condoned. The
First Amendment ensures that religious organizations and
persons are given proper protection as they seek to teach
the principles that are so fulfilling and so central to their
lives and faiths, and to their own deep aspirations to
continue the family structure they have long revered. The
same is true of those who oppose same-sex marriage for
other reasons. In turn, those who believe allowing samesex
marriage is proper or indeed essential, whether as a
matter of religious conviction or secular belief, may engage
those who disagree with their view in an open and searching
debate. The Constitution, however, does not permit
the State to bar same-sex couples from marriage on the
same terms as accorded to couples of the opposite sex.