The provision, known as Act 2, was part of a package of education reforms put forth by Gov Bobby Jindal in 2012, The (New Orleans) Times-Picayune reported Tuesday.
In a 6-1 ruling, the court said the constitution stated in "clear, specific and unambiguous language" that per-pupil allocations of school funds must go to public schools. The money could not diverted to non-public schools, the judges said.
The court also found the method by which the proposal was made law violated procedures and is therefore void.
The Legislature had passed a resolution that "was intended to have the effect of law," the court said, but it was filed after the deadline for introducing new bills, making it invalid.
The ruling noted it was not the court's place to evaluate the merits of the program.
Justice Greg Guidry, the lone dissenting vote, said he saw no reason per-pupil allocations couldn't be used "to fund scholarships" because the per-pupil allocation reverted to the state when the student left the system.