* Church ruling Monday may boost case for school "vouchers"
* ACLU, others challenged Denver-area county's program (Recasts first paragraph)
By Andrew Chung
WASHINGTON, June 27 (Reuters) - The U.S. Supreme Court on Tuesday ordered Colorado's top court to reconsider the legality of paying for children to attend private religious schools with public funds in light of Monday's major ruling blurring the line separating church and state.
The justices threw out a 2015 Colorado Supreme Court ruling that a school "voucher" program in the Denver area violated the state's constitutional ban dating to the 19th century barring public funding for religious entities.
The U.S. Supreme Court on Monday ruled that churches and other religious entities cannot be categorically denied public money even in states whose constitutions explicitly ban such funding, a decision that could bolster the case for vouchers and other subsidies to religious schools.
In that ruling, the justices sided with a Missouri church that objected to being denied access to public grant money for a playground improvement project because the state's constitution bans public funding of religious entities.
The justices on Tuesday also threw out a lower court ruling in a similar case in New Mexico over a state program that lends textbooks to schools, both public and private including religious ones, asking that court also to reconsider following Monday's church ruling.
There is a fierce debate in the United States over school vouchers, which many Christian conservatives advocate and people against government funding for religious purposes oppose. Republican President Donald Trump's education secretary, Betsy DeVos, is a prominent supporter of such "school choice" plans.
The Colorado case arose after the Douglas County School District enacted a voucher program in 2011 to help pay the tuition costs of attending certain private schools, most of which were religiously affiliated. The district argued that introducing competition into education would improve public schools.
Individual taxpayers and a group called Taxpayers For Public Education, backed by the American Civil Liberties Union, challenged the voucher program, objecting to taxpayer money going to religious schools.
RELIGIOUS BIAS ALLEGED
The school district, as well as Colorado's state government and voucher supporters, appealed to the U.S. Supreme Court. The district argued that the prohibition on funding for religious entities at the heart of the controversy is a so-called Blaine amendment, written into Colorado's state constitution in 1876 as a form of anti-Catholic bias, "at a time when public institutions readily embraced Protestantism."
Throwing out the state court's ruling sends a strong signal that the high court "will not tolerate the use of Blaine amendments to exclude religious options from school choice programs," attorney Michael Bindas of the Institute for Justice conservative advocacy group, representing three families with children who had received vouchers, said in a statement.
The district said the state constitution's ban runs afoul of the U.S. Constitution's guarantees of free exercise of religion and equal protection under the law. "The time to end this discrimination is now," it added.
The voucher program's challengers dispute that the state constitutional language was a Blaine amendment. They told the justices the program was a ploy to provide public funds to religious schools "cloaked as a federal constitutional right."
An attorney for the challengers, Matthew Douglas, said Monday's church ruling does not address religious uses of government funding. Douglas predicted that the Colorado court will again maintain its restriction on the program.
In the New Mexico case, parents of public school children in 2012 challenged a textbook lending program, saying it violated the state constitution's bar on public funding of religious or private schools. They said the program forced them to support the "religious dictates of others with whom they disagree."
(Reporting by Andrew Chung; Editing by Will Dunham)
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