The Wisconsin Supreme Court on Dec. 15 ruled that Catholic Charities Bureau and its affiliates are eligible for a religious exemption from the state’s unemployment insurance tax, directing state officials to grant the exemption.
The decision follows a unanimous U.S. Supreme Court ruling in June in Catholic Charities Bureau v. Wisconsin Labor & Industry Review Commission, which found that Wisconsin violated federal law by denying the Catholic nonprofit a religious exemption.
As CatholicVote previously reported, the dispute centered on Catholic Charities’ request to withdraw from the state’s unemployment compensation system and instead participate in a program offered by Wisconsin’s bishops. The Wisconsin Supreme Court previously denied the request, concluding that Catholic Charities’ service to the poor, though religiously motivated, did not qualify the organization as “religious.” The case then escalated to the U.S. Supreme Court.
Writing for the U.S. Supreme Court in its June decision, Justice Sonia Sotomayor said Wisconsin improperly imposed a “denominational preference by differentiating between religions based on theological lines.” She added that how religious groups choose to carry out charitable work reflects “fundamentally theological choices.”
Rather than complying with the high court’s decision, Wisconsin Attorney General Josh Kaul and other state officials tried to “circumvent the ruling” by asking the Wisconsin Supreme Court to consider eliminating the religious exemption altogether, CatholicVote reported in October.
The Wisconsin Supreme Court ordered additional briefing on the issue but ultimately denied the request. In its Dec. 15 order, the court held that Catholic Charities Bureau “is eligible for the religious purposes exemption.”
Eric Rassbach, vice president and senior counsel at Becket Fund for Religious Liberty, criticized the state’s approach in a Dec. 15 press release. The Becket Fund was one of the legal organizations representing the Catholic Charities Bureau of the Diocese of Superior.
“You’d think Wisconsin would take a 9-0 Supreme Court loss as a hint to stop digging,” Rassbach said. “But apparently Attorney General Kaul and his staff are gluttons for punishment. Thankfully, the Wisconsin Supreme Court put an end to the state’s tomfoolery and confirmed that Catholic Charities is entitled to the exemption it already won.”
Becket argued that eliminating the exemption would undermine protections relied on by faith-based organizations across Wisconsin. The group also cited its 2024 Religious Freedom Index, which found that 73% of Americans believe religious organizations serving their communities should be eligible for government funding on the same basis as nonreligious groups.
“The Wisconsin Supreme Court’s order today protects not just Catholic Charities, but every faith-based organization that relies on this exemption to serve the public,” Rassbach said. “It turns out that penalizing charities is not a winning legal strategy.”