"The federal government has no place telling schools, municipalities, or States what religious ceremonies or monuments they can sponsor."
What the First Amendment actually says is, "
All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the state wherein they reside. No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws."
Hereby the Constitution clearly limits the states' ability to infringe upon citizens with anything that would deprive them of freedoms and their protected rights.
While not found in the Bill of Rights, there ARE Constitutional protections for citizens against state sponsored religion.
So, while there is no separation of church and state claus to be found in the Bill of Rights, there are Constitutional protections that extend from the Fourteenth Amendment to those who don't wish to have state religion or religious iconography funded with their money.