If school officials are supposed to be ‘neutral’ toward religion under the establishment clause, does that mean they should keep religion out of public schools?
No. By “neutrality” the Supreme Court does not mean hostility to religion. Nor does it mean ignoring religion. Neutrality means protecting the religious-liberty rights of all students while simultaneously rejecting school endorsement or promotion of religion.
In 1995, 24 major religious and educational organizations defined religious liberty in public schools this way:
Public schools may not inculcate nor inhibit religion. They must be places where religion and religious conviction are treated with fairness and respect.
Public schools uphold the First Amendment when they protect the religious-liberty rights of students of all faiths or none. Schools demonstrate fairness when they ensure that the curriculum includes study about religion as an important part of a complete education.