Separation of church and state?

A really interesting and alarming story about Christian Horizons was covered on the front page of the KW record last month. I think this article does a good job of rationalizing the convictions of Christian organizations to define themselves as those whose members agree to a common faith and morality. But I can see where the government is coming from, especially since the organization is largely funded by tax payer dollars. Tricky. What is of more interest is where the trajectory of these sorts of things takes the church/government relationship in the future.