Not when it's Your Tax Dollars At Work, in my opinion.
'Anthony R. Picarello Jr., general counsel and associate general secretary of the United States Conference of Catholic Bishops, disagreed. “It’s true that the church doesn’t have a First Amendment right to have a government contract,” he said, “but it does have a First Amendment right not to be excluded from a contract based on its religious beliefs.”'
Taken to its conclusion, though, that principle results in no difference between the two clauses. If the state of Illinois said, "We won't allow Catholics to bid on these contracts," that would be clearly illegal religious intolerance. But the restrictions are on actions by a contractor that violate state law. If the Church was saying that, based on its religious code, it was only going to adopt kids out to Catholic parents in good standing, or to parents who only voted for certain candidates, or (in the case of other religious denominations) to parents who were white, or not of mixed race, or anyone but Jews, etc., then there'd be no question that the state should be able to reject their bid on that basis, or require them to change their policy as a condition of obtaining public money from all taxpayers.
Which, really, is the bottom line here: the issue is not whether Catholics should be able to discriminate however they want as a private adoption agency, but whether they should be able to get government funding (i.e., money from all the taxpayers) to do so, regardless of their practices. If the Church thinks its mission to children is that urgent and their moral teachings that inviolable, then they need to do so without asking for state funds.
All of this is a fine set of arguments in favor of church/state separation. Because here's a case where the church has become dependent on state financing ("Catholic Charities affiliates received a total of nearly $2.9 billion a year from the government in 2010, about 62 percent of its annual revenue of $4.67 billion"), and now it's face with either trying to make the state bend to church teachings ("give us the money, whether or not it would be legal for anyone else to do what we do") or bend church teachings to obey the state. A lose-lose for everyone, it seems to me. #ddtb
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Bishops Say Rules on Gay Parents Limit Freedom of Religion
Roman Catholic bishops see a fight over adoption rules in Illinois as part of an escalating campaign by the government to trample on their religious freedom.