One little problem for the diocese is that without non-Catholic support for the schools, all the schools would close.

Private schools can and do limit the enrollment–it is not uncommon for fundamentalist Christian schools to have a family litmus test such as a recommendation from the family’s pastor.

The problem here seems to be holding one family (the homosexual parents) to a different standard than every other family enrolled in the school.

IIRC, in Canada, the Catholic schools are suported by tax dollars; areas will have both public and Catholic school systems, both taxpayer supported.

In the US, no such support exists with a few rare exceptions; Milwaukee and Cleveland have started voucher systems where some kids are getting state aid to go to private schools, including Catholic and evangelical-based schools. Otherwise, parents have to pony up the tuition money or find a schollarship for their kid.

As far as having parents live up to the school’s standards, I recall a cause celeb last spring when a stripper’s kid was kicked out of a evangelical school when she refused to change professions. Schools are allowed to limit their coverage to families who are on the same page theologically; however, they do so at their PR peril.

You can argue that the heterodox families will be a bad influence on the church school but you can also argue that the church school will be a good influnce on them. Take your pick.