This article states that Texas Governor Rick Perry just signed the "Merry Christmas" bill into law. The law "removes legal risks of saying 'Merry Christmas' in (public) schools while also protecting traditional holiday symbols, such as a menorah or nativity scene, so long as more than one religion and a secular symbol are also reflected." This article clarifies that the law says "a school district may educate students about the history of traditional winter celebrations, and allow students and district staff to offer traditional greetings regarding the celebrations, including 'Merry Christmas,' 'Happy Hanukkah,' and 'happy holidays.'" Perry was quoted as saying, "Religious freedom does not mean freedom from religion," a popular conservative line that apparently means "religious freedom means we ought to be free to shove our religion down other people's throats as often as possible."
This seems to be yet another law that feeds the Christian persecution complex by "legalizing" stuff that isn't illegal anyway, as Friendly Atheist pointed out way back in December of last year, when the law was first proposed. As far as I know, school districts have always been able to teach kids about the "history of traditional winter celebrations." History is fine-- the real issue is proselytizing, and, the big problem is that this sort of history often emphasizes Christmas and its religious aspects at the expense of other celebrations. (I saw no mention of Yule or Kwanzaa in either article, though for all I know they could be mentioned in the law itself.) The fact that it's being called the "Merry Christmas" bill does not bode well for Texas' commitment to teaching about "traditional winter celebrations" other than Christmas. (Nor does the fact that the Kountze High School cheerleaders were invited to the signing, and Perry reportedly said the law was for believers like them.)
I'm not a fan of the idea that nativity scenes are okay on public property "so long as more than one religion and a secular symbol are also reflected," but it does seem to follow the current rulings laid out by the courts, and FFRF seems to be generally okay with displays along these lines, more as a compromise than as an ideal. But as Friendly Atheist pointed out, unless the law clearly states that these displays must be equal in size and prominence, then you could have a ten-foot Nativity scene with a tiny little two-inch menorah and a half-inch secular symbol, and that would presumably be okay under this law-- but not, I would think, under any sensible court's ruling.
And I haven't heard of teachers being sued for saying "Merry Christmas." I do wonder if they will be discouraged (subtly or otherwise) from saying "Happy Yule" or "Happy Kwanzaa," though. Alas, Texas is not generally known for its tolerance of other belief systems. Buried down in the Fox News article is this revealing tidbit about Texas lawmakers:
During the last Sunday of the legislative session on May 26, Rep. Donna Howard, an Austin Democrat, gave the Texas House's daily prayer.
"We are fortunate to live in a country where we have the freedom to exercise the religion of our choosing while also being free from having any religion imposed upon us," said Howard, herself a Unitarian Universalist.
Her words prompted some conservative lawmakers to hold their own, separate prayer session moments later.
If Texas lawmakers can't bear to even listen to a Unitarian prayer extolling religious freedom without holding another prayer session moments later, they're not exactly models of tolerance toward different religions, are they?