By JIM HADDADIN
Thursday, March 22, 2012
CONCORD— The New Hampshire Senate on Wednesday passed a bill giving businesses a tax credit in return for donating money to help send public school students to private schools and religious institutions.
The bill passed on a 15-9 vote, supported by a majority of the Republicans in the GOP-led Senate.
Democratic Sen. Molly Kelly unsuccessfully lobbied to delay the vote and seek an opinion from the state's Supreme Court about whether the program would run afoul of the state constitution, which does not allow public money to be used in support of religious schools.
In an interview Wednesday, Kelly, of Keene, said she fears the education scholarship program would violate article 6 of the New Hampshire constitution, which states, "no person shall ever be compelled to pay toward the support of the schools of any sect or denomination."
The scholarships proposed in the Senate bill would be granted to students who wish to attend a private school or a public school outside of their home district. That includes religious schools.
The scholarships would be awarded annually, and students would receive an average of $2,500 in scholarship money.
The scholarships would be funded through donations from businesses, which could recoup 85 percent of their donations as credits on either the business profits tax or business enterprise tax.
Supporters say the bill, SB372, would strengthen school choice and give schools an incentive to offer the best programming possible.
"Education tax credits enable more choices for parents, putting accountability for education directly in their hands," Sen. Jim Forsythe, R-Strafford, the legislation's sponsor, said in a statement released after the Senate vote. "Studies have shown increased accountability and competition improves the educational outcomes for students at both public and nonpublic schools and that should be the driving factor behind any education related legislation."
According to the announcement, the education tax credit program would be "on sound constitutional footing" because it relies on tax credits rather than education vouchers, which are a form of direct payment from the state government.
Opponents also question the impact of the program on funding for public education. For each student who leaves a public school system to attend a nonpublic school, the district would lose an equivalent amount of state funding. Currently, the state provides an average of about $4,100 per student.
School districts around the region stand to lose tens of thousands of dollars in state aid if New Hampshire lawmakers approve the bill, according to a preliminary analysis prepared by the State Department of Education last month.
Before the Senate vote on Wednesday, Gov. John Lynch identified the education tax credit bill as one of the most concerning pieces of legislation pending in Concord, in regard to public education. Speaking at a Portsmouth Chamber of Commerce breakfast, Lynch said he worries about the impact the program would have on the state's general fund, and on the ability of school districts to cope with dwindling funds. Lynch said schools will be saddled with fixed costs that won't disappear in line with diminishing enrollment.
"I think it has the potential consequence of eroding the quality of education that we offer in our public school system," Lynch said, "so I'm very, very concerned about where they're going with respect to vouchers."
The bill will have no impact on the state budget this biennium, according to the Senate announcement. However, partisans dispute its long-term ramifications. The bill includes triggers that allow the scholarship program to grow in future years.
The program would accept a maximum of $8 million in donations from businesses during its first year, yielding a maximum of $6.8 million in scholarship money. If more than 80 percent of the funds are expended, the program can be expanded next year.
Proponents point out that eight states have enacted scholarship tax credit programs, with varying degrees of similarity. They also note that the legislation calls for a majority of the scholarships to go to students from low-income families in the program's first year.
"We all understand that no school can be the right 'fit' for every student," stated House co-sponsor Rep. Gregory Hill, R-Northfield. "We designed this program to help those families with limited resources afford the educational opportunity that best suits their child's needs."
The Senate Finance Committee will now be assigned to review the fiscal impacts of the legislation. Salem Republican D.J. Bettencourt, the House majority leader, is the prime sponsor of HB 1607, the companion legislation to the bill passed by the Senate.