A federal appeals court Monday ruled that the state of Iowa can not spend taxpayer money on a faith-based prison treatment program. However, the appeals court rejected an order that the program return money to the Iowa Department of Corrections.

Just over 100 inmates at the prison in Newton take part in the program called the InnerChange Freedom Initiative. The program is run by Virginia-based Prison Fellowship, with expenses covered by donations. Up until last year, the state of Iowa funded a portion of the program. In it’s decision, the appeals court rejected a lower-court order requiring Prison Fellowship to repay nearly $1.7 million to Iowa.

The lawsuit was filed by Americans United for Separation of Church and State, based in Washington, D.C. Americans United Executive Director Rev. Barry Lynn believes the decision will have a far-reaching impact on other faith-based state programs. "It’s an enormously important decision," Lynn says, "because it clearly limits government promotion of religion in public institutions like this prison."

Former Virginia Attorney General Mark Earley, now president of Prison Fellowship, isn’t so sure – saying the ruling allows the program to remain in place in Newton. "There’s nothing in (the ruling) that would impact negatively the program as it is administered today," Earley says, "and that’s because it’s totally administered with private funds." Lynn, however, contends the program should be shut down immediately.

Lynn says, "I think this court case makes it pretty clear that the court was not just concerned about taxpayer support, but also about turning over treatment and discipline decisions in a prison to a religious group." Earley disagrees.

He says the main issue in the case is about public funding of the program. "That has since ceased," Earley says, "so the things the lower court found to be problems are not problems anymore." The Iowa Attorney General’s office defending Iowa prison officials in the lawsuit. A spokesperson for the office, Bob Brammer, declined to comment on the court ruling or whether the program in Newton would be shut down.