A federal judge will soon decide whether religious schools should be allowed to receive public education funds.

The case has attracted interest from civil and religious liberties groups, education leaders and the U.S. Department of Justice.

In August, three Maine families challenged a decades-old statute by filing the complaint against the state Department of Education in U.S. District Court in Bangor. Local school administrative units that do not have their own secondary schools can pay a certain amount in tuition for students to attend outside public or private schools. But under Maine law that money cannot be used at religious schools, a policy that the families’ lawsuit calls discriminatory and unconstitutional.

U.S. District Judge D. Brock Hornby heard oral arguments in the case Monday from both sides and from an attorney representing the American Civil Liberties Union of Maine. That group filed a motion to intervene in the case last year in order to argue that it is unconstitutional to force states to fund religious education. The judge denied that request but allowed an amicus brief outlining their position on the case.

“This is an important issue,” Hornby said Monday in the Portland courtroom. “It is important because it involves the education of Maine youth.”

Hornby posed a number of questions during the hearing, and he specifically asked both parties to address how the Maine Human Rights Act and discrimination based on sexual orientation factored into their arguments.

He raised those questions because court documents refer to policies barring LGBTQ students and employees at the two schools mentioned by the plaintiff families – Bangor Christian School in Bangor and Temple Academy in Waterville. The documents state Bangor Christian will expel students who are gay, lesbian or who identify as a gender other than the one on an original birth certificate, for example, and Temple Academy will not admit students with gay or lesbian parents. Both schools also do not hire people who are LGBTQ, the documents state.

Both the state and the ACLU of Maine argued those policies are discriminatory and prevent the schools from receiving public funds.

“The more pernicious danger with that is that it assumes somebody cannot be both gay and Christian, which we know is not the case,” said Zachary Heiden, the legal director for the ACLU of Maine.

The plaintiffs are represented by two national groups that advocate for religious liberty and school choice. Tim Keller, a senior attorney from Virginia-based Institute for Justice, argued on their behalf Monday. He said the schools would not need to change their hiring practices in order to accept public funds.

“Religious organizations may require that all applicants and employees conform to the religious tenets of the organization,” Keller said.

A number of outside groups filed amicus briefs weighing in on the case. Agudath Israel of America, a national Orthodox Jewish organization, wrote in support of the plaintiffs. The U.S. Department of Justice has has filed arguments supporting the religious schools.

The national and state Education Association, as well as the national and state American Civil Liberties Union, filed briefs in support of the defendants and the existing law.

This is the third time the Institute for Justice has filed a legal challenge in Maine over this issue. The law firm took similar cases in 1997 and 2002, losing both times.

The Institute for Justice saw an opening to try again after a U.S. Supreme Court ruling last year. In that case, Trinity Lutheran Church in Missouri was barred from participating in a state program that reimburses the cost of rubberizing playground surfaces.

The nation’s highest court ultimately decided the church should be eligible for that public funding. So the Institute for Justice joined with the Texas-based First Liberty Institute to represent the three Maine families, who live in Palermo, Glenburn and Orrington.

Keller argued that ruling meant religious exclusions from public programs are discriminatory and could cause harm.

“The record shows she was bullied in her public school based on her religious beliefs,” Keller said about one girl named in the lawsuit.

The state said that case was limited only to the playground grant and cannot be applied to public education.

“The parents are not being excluded because they are religious,” Assistant Attorney General Sarah Forster said. “They’re being excluded because they are seeking a different benefit than the Maine tuition program provides.”

If the lawsuit is successful, it would not affect districts that contract to send all their students to outside high schools as a group. It is not clear how many students live in districts that reimburse parents for tuition at the high school of their choice. Keller has said the Institute for Justice has identified a handful of districts with that policy, mostly in Penobscot, Kennebec and Lincoln counties.

Hornby said he would issue his ruling as soon as possible.

“The next academic year is approaching,” he said.