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By Michelle Boorstein

A conflict that roiled Washington’s social service world last year is detonating in Illinois, with the state reportedly severing major ties with Catholic Charities over the issue of same-sex marriage.

Three branches of Catholic Charities in Illinois went to court today to try and stop the state from ending foster care and adoption contracts that affect thousands of children. Some 2,000 foster care children reportedly have caseworkers from Catholic Charities, which is the Catholic Church’s social service arm.

The issue is the same as it was last year in Washington, when the City Council approved same-sex marriage. Catholic Charities, one of the D.C. area’s largest social service providers, said same-sex marriage violates core church tenets and it couldn’t be in the position of validating gay relationships by placing children in the homes of same-sex couples.

While church officials initially said the passage of the law could force Catholic Charities to end its work with the city, ultimately church lawyers crafted a policy that proved controversial: Washington’s Catholic Charities ended spousal benefits for all new employees in order to not give them to a same-sex spouse. Some Catholics said the city had forced the charity’s hand; others were outraged to see basic benefits eliminated in tough economic times.

A law took effect in June in Illinois that gives civil union partners the same legal rights as opposite-sex partners. After studying the issue for months, state officials last week sent Catholic Charities offices in Peoria, Joliet and Springfield letters saying their contracts could not be renewed in 2012. Catholic Charities in Chicago ended its foster care services in 2007 after losing its insurance coverage.

These local fights are microcosms of a broader, national issue: How to reconcile civil rights (the rights of same-sex couples) with those of religious liberty (the rights of religious conservatives to discriminate on the basis of their religious beliefs). While federal law and many local laws explicitly exempt religious groups from bans on religiously-based employment discrimination, how that applies to programs that receive public dollars is still a matter of huge dispute.

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