Nashua Telegraph Editorial: School tax credits don’t make grade 5/8/12

posted May 7, 2012, 7:29 PM by Bill Duncan

School tax credits don’t make grade 

Published: Tuesday, May 8, 2012

Legislative writers have gone to great lengths to make sure that adopting education tax credits to help send public school students to private schools would be constitutional.

Constitutional? Perhaps. Good public policy. We don’t think so.

So, if the House of Representatives (HB 1607) and Senate (SB 372) are able to reach a compromise, it is our sincere hope Gov. John Lynch will veto this ill-conceived attempt at education “reform.”

As we understand it, here is how the plan would work:

Low- and middle-income students would be eligible to receive on average $2,500 each year in so-called “scholarship” money to be used toward attending the private or religious school of their choice, or a public school in another district. Moreover, home-schooled students would be eligible for up to $725 a year.

Under both bills, scholarships would be available to families that earn up to 300 percent of the federal poverty level, which breaks down to roughly $65,000 for a family of four.

And in order to circumvent the separation of church and state issue, the scholarship money would come directly from private businesses, not the state. In turn, businesses would receive an 85 percent credit on their donations when applied to the business profits tax or business enterprise tax.

Proponents argue such a program would expand choice in education and help students who are struggling in a public school setting by making private education more affordable to their parents.

“School choice is not an indictment on public schools nor a battle of public vs. private schooling,” House Majority Leader D.J. Bettencourt, R-Salem, and Rep. Greg Hill, R-Northfield, wrote in a guest commentary published April 22 in The Sunday Telegraph. “It’s about giving disadvantaged and special-needs students and their families the opportunity to excel in an education that fits their needs.”

As such, proponents say, it would be a win-win for everybody. Low- and middle-income parents get financial assistance to help send their children to the school of their choice. Businesses get a tax break. Everyone is happy, right?

Wrong. For no matter how cleverly you craft the language in the bill, the bottom line is it would take money now going to public schools and divert it to private and religious schools, leaving cities and towns to make up the difference.


  •  For each scholarship awarded, private businesses would earn a tax credit, which means less money for the state treasury. Both bills estimate this cost to be $16.4 million over three years.

  • For each student who leaves a public classroom, the associated $4,100 in state-funded aid per pupil would be lost to the school district, meaning less money to pay for teacher salaries, instructional materials, transportation, utilities and other fixed costs.

The House bill pegs this loss at $14.4 million over three years; the Senate projects it at an even costlier $17 million. Meanwhile, savings associated with having fewer students would only total roughly $960,000 during that same period.

So let’s see if we have this straight: New Hampshire businesses get a tax break. The state saves between $14 million and $17 million in state adequacy aid over a three-year period. And local school districts are left to make up nearly all of the difference.

We trust the governor is paying attention.
© 2012, Telegraph Publishing Company, Nashua, New Hampshire