A court has ruled New Jersey cannot give $11 million in grants to two religious schools.

The state appeals court ruled Thursday the $10.6 million grant to Beth Medrash Govoha yeshiva in Lakewood and $645,323 to the Princeton Theological Seminary are unconstitutional.

The American Civil Liberties Union and Americans United for Separation of Church and State had challenged the grants, part of $1.3 billion in grants in April 2013.

New Jersey officials argued the grants were OK because they were meant to pay for buildings and equipment, not worship or ministries.

Moshe Gleiberman is vice president of Beth Medrash Govoha. He says the yeshiva is disappointed in the ruling.

The court said its ruling doesn't mean the state can't give money to religious-affiliated schools that have a broader sectarian mission.