Solicitor General Thomas Fisher, defending the law, said the vouchers allow parents to send their children to private schools they otherwise couldn't afford. He said parents, not the state, decide which schools receive public voucher money.
"Any money that ends up in the coffers of religious institutions is there at the discretion of the parent," Fisher said during the hour-long hearing.
But John West, the Washington attorney handling the court challenge pressed by the Indiana State Teachers Association, said that virtually all of the voucher money goes to schools whose primary purpose is to promote the teachings of their affiliated churches.
"Here, the state is directly paying for the teaching of religion," West said. "Many of these schools describe themselves as ministries of the churches they're affiliated with," he added.
The Indiana case is being closely watched because the vouchers are available to middle class students. Voucher programs in other states are generally limited to low-income students or those in failing schools. Conservative Republicans say the vouchers offer families more choices and will boost education by giving public schools greater incentive to improve. Critics contend the vouchers could cripple public schools by diverting desperately needed funds.
In considering the law, "The problem for me is 'the benefit of,'" said Indiana Chief Justice Brent Dickson, referring the wording of the state constitution, which precludes spending state funds for the benefit of religious institutions. Dickson and other justices repeatedly probed the nuances of that phrase's meaning — including whether it applied to other government services or to state scholarships that help students attend church-affiliated universities like Notre Dame.
"Why is that permissible, and this is not?" Dickson asked. He also noted that in 1851, when the constitution was ratified, most of the state's schools were private and "the Bible was the textbook."
West argued that in those other cases, the state wasn't directly funding religious activity.
Justice Stephen David focused on whether the state will have shifted to a religious education system if the vouchers drain much of the resources from public schools.
"What if 97 percent of kids end up going to religious schools?" he asked Fisher. "That is altering the state of education."
"You still have decisions being made by the parents," Fisher insisted. He also said the question was hypothetical.
However, Fort Wayne Community Schools Board President Mark GiaQuinta said after the hearing that school vouchers already had damaged the state's largest public school district.
"We have lost $7 million of our budget to vouchers," he told reporters. The district's 2013 budget is $279 million.
The number of students using the vouchers has increased since the law went into effect. The system was championed by Superintendent of Public Instruction Tony Bennett. But Bennett's Democratic opponent, Glenda Ritz, defeated him in the Nov. 6 election after arguing that the vouchers and other changes were damaging education in Indiana.