Nativity scenes and other religious displays are generally permitted on public property if used in conjunction with the secular celebration of holidays. A publicly-sponsored Nativity scene standing alone is unconstitutional. The same holds true for publicly sponsored Christmas pageants with religious music, unless other secular holiday songs are included. Interestingly, privately-sponsored nativity scenes displayed on public property are constitutional, even in the absence of other secular symbols. However, equal access must be provided to competing interests/symbols, and to avoid confusion or challenge, public acknowledgment of the private sponsorship should be posted conspicuously.
The first big legal case resolving nativity scenes was Lynch v. Donnely (1984), a 5-4 decision allowing the display of a city-sponsored creche scene in a public park, alongside other secular symbols of the holiday (Christmas tree, Santa Claus, and cut-out figures of a clown, teddy bear, and dancing elephant). In 1989, the Court ruled against a different nativity display (in another narrow 5-4 decision), striking the privately-owned nativity scene displayed in a public county courthouse because the scene stood alone, without the display of other secular holiday symbols,—making this one indisputably religious in nature. Allegheny County v. ACLU (1984)