By Stephanie Simon

Nov 30 (Reuters) - A state judge on Friday shot down Louisiana's sweeping school voucher program, ruling that the state could not use funds set aside for public education to pay private-school tuition for thousands of low- and middle-income children.

Louisiana Governor Bobby Jindal, who had championed the program, called the ruling "wrong-headed" and "a travesty for parents across Louisiana who want nothing more than for their children to have an equal opportunity at receiving a great education."

Jindal, a Republican, vowed to appeal.

While State District Judge Tim Kelley ruled the voucher program unconstitutional, he did not issue an immediate injunction to stop it. The 5,000 students currently receiving vouchers will be able to continue attending their private schools pending an appeal, state officials said.

"We are optimistic this decision will be reversed," said John White, state superintendent of education.

But Kelley's ruling is not the only challenge facing the voucher program.

Earlier this week, a federal judge in New Orleans ruled that the program had the potential to disrupt the region's court-ordered efforts to desegregate public schools. The judge issued a temporary injunction halting the use of vouchers in Tangipahoa Parish over concern that the program was siphoning off state dollars needed to implement the desegregation plan.

While that ruling just applied to the one parish, at least 30 other school districts in Louisiana are under desegregation orders; opponents of the voucher program have said they will bring similar federal court cases in those districts.

They may not need to take such action, however, if Friday's ruling is upheld. Kelley issued his 39-page decision after a brief but emotional trial in a case brought by two teachers unions, dozens of local school boards and the state school board association.

"Today is really significant," said Steve Monaghan, president of the Louisiana Federation of Teachers. "What the governor was doing was unprecedented and unconstitutional under Louisiana law."

About 5,000 students are currently receiving the vouchers, which cover tuition and fees at scores of private and parochial schools, including some small church-based schools that infuse all their classes with Biblical references and do not teach subjects such as evolution.

Students are eligible if they attend a poorly performing public school and if their families meet income guidelines. Households can qualify with annual income up to 250 percent of the poverty line, or $57,625 for a family of four.

The state had argued that as long as it was funding public schools adequately and equitably, it could give a portion of state education funds to private and parochial schools as well, in the interest of giving families more educational options.

But Judge Kelley ruled that Louisiana's annual education appropriation, calculated under a complex formula known as the Minimum Foundation Program, was intended exclusively for public schools. To divert it, he said, violated the state constitution.

The use of state money to pay for religious education was not at issue in the case; the U.S. Supreme Court has ruled that vouchers can be used for religious education so long as the state is not promoting any one faith but letting parents choose where to enroll their children.

Within minutes of the ruling, state education officials were scrambling to come up with a workaround that would let them continue the program with a different funding mechanism, said Barry Landry, a spokesman for the department of education.

One possible solution: The legislature could appropriate money to pay private-school tuition from the state's general fund, rather than digging into the separate pot of money set aside for public education. General fund money has been used for several years without court challenge to pay for a much smaller voucher program in New Orleans.

But finding funds to pay private-school tuition statewide could be tough; the tab is expected to hit about $25 million this year and could rise sharply if, as state officials expect, more private schools open up seats for voucher students and more families apply for the aid. Louisiana has been hit hard by the recession and has made several painful budget cuts in recent years, including sharp cuts to the public hospital system.

Monaghan, the teachers union president, all but dared the governor to seek a general fund appropriation for the voucher program, betting it wouldn't fly in an age of austerity. "The next move is for the governor," he said.

In a statement, Jindal didn't tip his hand about his tactics but did issue a forceful vow to defend his signature program. The opportunity to attend private schools, he said, "is a chance that every child deserves, and we will continue the fight to give it to them."

Follow us on Twitter @ReutersLegal | Like us on Facebook