Testimony to House Ways and Means on HB 1607, establishing an education tax credit to fund school vouchers

NHDRA staff speaking to the House Ways and Means HB 1607 Subcommittee, 2/2/12

posted Feb 5, 2012, 6:58 AM by Bill Duncan

NHDRA staff speaking to the House Ways and Means HB 1607 Subcommittee, 2/2/12

Rep. Lynn Ober, Vice Chair of the House Finance Committee, spoke to the House Ways and Means Subcommittee on HB 1607, 2/2/12

posted Feb 5, 2012, 4:16 AM by Bill Duncan

On February 2, 2012, Rep. Lynn Ober, Vice Chair of the House Finance Committee, spoke to the House Ways and Means Subcommittee on HB 1607, the school voucher bill. She expressed great concern about the cost of the bill and, as a school board member, the impact on New Hampshire public schools

Rep. Ober speaking to the House Ways and Means Subcommittee on HB 607

Exchange prompted by email submission of Dr. Sarah Stitzlein testimony to the House Ways and Means Committee, 2/23/12

posted Feb 2, 2012, 2:40 AM by Bill Duncan   [ updated Feb 10, 2012, 5:44 PM ]

When Dr. Stitzlein submitted her Senate Education Committee Testimony to the House Ways and Means Committee, it brought an immediate reply from an advocate for the other side.  Dr. Stitzlein's testimony is at the bottom, Jason Bedrick's response is next, reading up, and my response to him, incorporating feedback from Dr. Stitzlein, comes here at the top.

The voucher bill sponsors and advocates try to enhance their arguments any way they can.  Here they do it by attributing greater authority to their studies than is appropriate.  You see it in the bogus references to the "Harvard study" and the "study by the Florida Department of Education."  This is discussed further in "This here study says everything will be OK".

From Bill Duncan:

Honorable Members of the House Ways and Means Committee,

You recently received Dr. Sarah Stitzlein's testimony to the Senate Education Committee.  This is a serious, thoughtful, balanced  and credible consideration of the issues in this legislation.  The response you received from the advocates (included below) does not measure up to that standard.  Here are my comments:

Mr. Bedrick starts with a reference to his Bartlett Center report, which I have commented on here.  It should be read as an advocacy piece.  Then he goes on to address several issues.

1. Private School Performance: Whenever you hear the phrase "gold standard," you know what you are getting is from the mother ship of voucher advocacy, the Friedman Foundation (as in Milton Friedman, who invented vouchers). The actual gold standard of research is peer review.  If someone refers to a study, ask if it's peer reviewed.  And then ask for the study and read the short abstract to see what it actually says.  

In the case of private school performance in voucher programs, Diane Ravitch, the leading critic of public education in the country, pretty much puts the issue to rest in her new book Death and Life of the Great American School System.  Here is an excerpt that says it all: there are no benefits to speak of, competitive or otherwise.

2. Accountability: The fact that parents can take their children out of private schools is no reason for there to be no academic accountability and transparency for private schools funded with public money.  (Money that, in this case, is coming right out of New Hampshire's public school systems.)  Florida and most new Education Tax Credit programs provide for in depth assessment of the academic performance of participating private schools. That's where all the voucher studies advocates refer to come from.  

One of the leading school choice advocates in the country makes a passionate case for the need for good performance assessment in voucher programs like New Hampshire's (their reasoning is here) .    

3. Reaching Low Income Families: Mr. Bedrick says that the "Harvard University study on Arizona's education tax credit program shows that non-profit scholarship organizations disproportionately fund low-income families even in the absence of a state mandate to means-test." 

First, the author is Vicki Murray, a fierce school choice advocate from the libertarian Pacific Research Institute, not Harvard.  Based on Mr. Bedrick's statements to me about this, it is clear that Ms. Murray's report does not meet Harvard's very clear guidelines, and is not qualified to be cited as a "Harvard study."  This is relevant because voucher advocates consistent overstate the legitimacy of their studies.

Second, Ms. Murray's conclusion does not show that the Arizona "scholarship organizations disproportionately fund low-income families."  It says, after a lot of qualifications about the quality and completeness of the data, that the recipients' median family income during the 2009/10 school year was $55,458.  This is not "low income," but almost 300% of the federal poverty guideline.  (Dr. Stitzlein pointed out in her testimony that she, as a UNH prof. qualifies under these guidelines, though she would not feel right taking voucher.)  

Ms. Murray's data analysis yields no insights on the proportion of scholarship recipients that are low income.

Click here for more on the "no need to target" argument

4. "Tax Credit Programs are Different From Vouchers:"  Not at all. Advocates like to make this point because vouchers are unpopular, but tax credits are just an alternative court-friendly way to fund vouchers.  More on that debate here.  There are differences between tax credits and vouchers, but their impact in schools is nearly indistinguishable.  They produce the same results.  Research on vouchers is often used to assess tax credit programs.

But Mr. Bedrick goes on in this section to make a much more serious misstatement when he says that HB 1607 does not drain money from the public schools.  Here's the reality: 

The state would offer tax credits to businesses to create $2,500 vouchers to incent children to leave their local public schools for private schools.  When a child leaves, the state would take over $4,000 from the child's school to repay itself for the scholarship.  

That's about as direct as it gets: public school money is moved into private schools.

Then Mr. Bedrick even goes a step further, citing a study "from Florida's Department of Education," again overstating the legitimacy of the study.  There is no study from the Florida Department of Education saying that voucher competition improves the public schools. His link goes to a magazine article on advocacy web site reporting on a study the the Calder Center, which has institutional funding from many sources including the Florida Department of Education.  The study is not "from" Florida DOE and is not peer reviewed.  The authors consider it a "working paper."  It is a reconsideration of a decade old disproved theory that competition from voucher and tax credit programs improves the public schools.  Here is a full critique of that proposition and that study. [In a subsequent email, Mr. Bedrick admitted his error in attributing this study to the Florida DOE, while saying everything else I say is wrong.]

Dr. Stitzlein and others at your own University of New Hampshire can provide reliable policy analysis on these issues.


Bill Duncan

Here is Mr. Bedricks email:
Honorable Members of the Committee,

I regret that I was unable to attend the hearing today on HB 1607. As you probably know, yesterday the Josiah Bartlett Center for Public Policy released a report on the proposed amendment to this legislation. Representative Bettencourt asked me to address the letter that Professor Stitzlein sent to you regarding HB 1607. The Josiah Bartlett Center report addresses all of those issues, but I will briefly touch on her main points here, in the order that Prof. Stitzlein made her points:

1. Some private schools outperform the public schools. Some don't. But even our best public schools aren't what's best for every single child assigned to those schools. This bill allows those families an opportunity to seek alternatives that best meet the individual needs of their children. Moreover, 18 randomized controlled studies (the "gold standard" of social policy research) have conclusively demonstrated that school choice programs have a positive effect student performance, or show no statistical difference. There is no "gold standard" study showing a negative effect. 

2. It is important that public schools and independent schools alike are held accountable for their performance. However, the accountability mechanisms for each are different. Public schools operate essentially as a monopoly, and they are primarily accountable to the taxpayers, not just parents. This gives elected officials the prerogative to decide what accountability measures to employ, such as standardized tests.


By contrast, independent schools are directly accountable to parents, who have the ability to choose to send their children to other schools if their children’s needs are not being met. Since independent schools often vary in their pedagogical approach, it would not be prudent to mandate that they administer standardized tests. Nevertheless many independent schools choose to have their students take the same tests as public school students.

3. A Harvard University study on Arizona's education tax credit program shows that non-profit scholarship organizations disproportionately fund low-income families even in the absence of a state mandate to means-test. This is akin to Salvation Army and soup kitchens, which also provide for low-income citizens even without state mandates.

4. Tax credit programs are very different from voucher programs in many respects regarding funding and administration (I go into greater detail in the Josiah Bartlett study), so it is a mistake to conflate the two. The program contained in HB 1607 does not drain any money from the public schools. Public schools are paid based on their enrollment. This bill does not change that. However, the state saves money because the reduction in state revenue is less than the reduction in state spending. Most importantly, studies from other states (including one from Florida's Department of Education) shows that public school performance improves in response to choice and competition.

It's also important to note that the private schools in Milwaukee, which Prof. Stitzlein references, have a much higher graduation rate and cost half as much as the public schools and they are performing at the same level. 

5. Education tax credit programs are perfectly constitutional. The U.S. Supreme Court and several state supreme courts in states with similar "Blaine amendment" provisions have found that education tax credits are constitutional. Not a single education tax credit program has been found to violate a state constitution.

Education tax credit programs expands the choices available to families. It shouldn't matter where a child is education -- what's most important is that children have access to high quality education that meets their individual needs.

I hope this answers any questions you might have, but I am happy to discuss this legislation further with anyone who is interested.

Jason Bedrick
Research Fellow
Josiah Bartlett Center for Public Policy

---------- Forwarded message ----------
From: Sarah Stitzlein <sarahstitzlein@hotmail.com>
Date: Mon, Jan 23, 2012 at 11:03 AM
Subject: UNH Education Professor weighs in on today's discussion of HB 1607--please read
To: betts24@gmail.com, gene.chandler@leg.state.nh.us, james.forsythe@leg.state.nh.us, rep.bates@live.com, william.obrien@leg.state.nh.us,psilva372@aol.com, will.smith@leg.state.nh.us, pam.tucker@leg.state.nh.us, gregory.hill@leg.state.nh.us, dan@mcguire4house.com,sbs2093@gmail.com, nlbem@comcast.net, jordanulery@myfairpoint.net, gazarian@comcast.net, rep.keithmurphy@gmail.com,wes.shuler@leg.state.nh.us, williambutynski@aol.com, dave.hess@leg.state.nh.us, joejfcc@myfairpoint.net, duffy.daugherty@leg.state.nh.us,billohm2010@aol.com, susan.almy@comcast.net, hatchbill@hotmail.com, sapareto@comcast.net, patrick.abrami@leg.state.nh.us,johnmcdonnellnh@aol.com, laurie.sanborn@leg.state.nh.us, hammchristine@gmail.com, mary.cooney@leg.state.nh.us

Vote No on HB 1607/SB372 the Education Tax Credit Program for Scholarships/Vouchers


Sarah M. Stitzlein, Ph.D. Educational Policy Studies

Assistant Professor of Education, University of New Hampshire


1.     Private schools do not outperform NH public schools.  We are a state that has one of the strongest and most successful public education systems in the country as indicated by our testing data.  Why should we incentivize children to leave it and thereby jeopardize its well-being?

·      The most recent (2009) and consensus-earning national data suggests that vouchers have not made any improvements in achievement or graduation rates over traditional public schools. 

o   Additionally a major 2011 study of low income students in Milwaukee found that those attending voucher schools performed no better, and often worse, on state standardized tests than students in traditional public schools. 

o   Interestingly, this bill does not provide the option of defraying costs associated with transferring to another public school, suggesting that the heart of the bill is focused on rewarding private schools rather than truly ensuring the best educational options for children, which may very likely be other public schools.

2.     Reduced accountability.  Shifting students to private and religious schools that have fewer regulations and no requirement for state testing, jeopardizes our ability to maintain accountability for the quality of education those children receive and the ability of the public to oversee how their funds are spent.

3.     Overuse by wealthy and typically white populations.  Vouchers/scholarships without strict guidelines on who receives them tend to be used by a narrow slice of the population who often are already well served by public or private schools.  These are the very people who do not need to be financially incentivized to make educational choices.

§  People who take advantage of school choice programs tend to be wealthier and more informed families.  If these families are drained out of the public schools, those schools may suffer.

§  Often vouchers don’t cover the entire cost of private school tuition.  So, they are more likely to be taken advantage of by wealthier families (typically white) who can afford the rest of the tuition.  In fact, many wealthy families use vouchers to move their children from less expensive private schools into even more elite and expensive private schools.

§  Given that the proposed NH legislation does not cover transportation costs, one can see that families who use the program would already be those well enough off to be able to provide the time and vehicle for transporting their child to a private school.

§  Vouchers tend to cause de facto segregation.  Currently across the nation only 9% of private school students are Black and 8% are Latino.

4.  Vouchers drain the public schools of students, funding, and resources.  Due to the use of vouchers in Milwaukee, public school attendance over the last decade is down 20% and it’s down 56% in D.C.  This drains money from the public schools (in the form of per-pupil expenditures that help cover costs that remain static even as the number of students decline, like heating bills). 

5.  Vouchers invite legal problems.  Conflict with putting public money into privately run schools, especially religious ones, opens up NH to major legal challenges by allocating public funding to religious organizations.

§  In the DC case, 82% of the children use their vouchers at religious schools. In Milwaukee, 80% of children use vouchers to attend religious schools.

§  The supreme court in Florida in 2005 found that vouchers were unconstitutional. 


Vouchers undermine the publicness of public education! We should all be working together to keep NH public schools strong, rather than just turning to private approaches to supposedly benefit a small percentage of people.

Sarah M. Stitzlein, Ph.D.

21 Cattail Lane, Unit 1

Barrington, NH 03825



Written testimony to the House Ways and Means Committee submitted in response to Duncan testimony, Cornerstone Research, 1/24/12

posted Feb 1, 2012, 2:21 AM by Bill Duncan   [ updated Feb 1, 2012, 5:19 AM ]

DNHPE Comment:  Mr. Moody's spin (highlighted below) aside, here is what he actually said (twice) on the radio program.

"In New Hampshire, we're seeing a decline in school age children.....If that parent feels they need to pull their child out of the public school system and put them into a private school, that's going to hurt the public school system as a whole.  This will give parents other options and potentially keep that child in the school system." 

Which, of course, it the opposite of the argument Cornerstone will need to make in support of HB 1607/SB 372, the bills to fund vouchers with education tax credits.  

Sometimes it just gets hard to remember which pocket you left your talking points in....

Testimony in Support of HB 1607 from Scott Moody. Vice President of Cornerstone Policy Research.

For the House Ways and Means Committee

January 24, 2012

Hello, my name is J. Scott Moody and I am the Vice President of Policy for Cornerstone Policy Research. I am submitting this written testimony to the Ways and Means Committee as clarification to written testimony presented by Bill Duncan of Newcastle. On January 23, 2012, Bill Duncan, who testified in opposition to HB 1607, included a statement in his written testimony that he attributed to Cornerstone Policy Research. He attempted to paraphrase a quote made by myself that he presumably heard on the July 17th show The Exchange on NH Public Radio. The show in question was a discussion about HB 542 which recently passed the House and is now law.

On this show, I said HB 542 was fundamentally addressing parental rights. Parents have the best knowledge to know whether a school is meeting their child’s needs. Competition is good for the private sector and it is also good for the education sector. If a public school isn’t meeting a child’s needs then a parent will look for alternatives like a private school or homeschooling. HB 542, which allows exceptions to be made for materials parents deem to be objectionable, puts the burden on the parent to pay for alternative materials and allows for the teacher and parent to come together and figure out a solution for the child. This is good for the child, good for the parent and good for the school. I believe what Mr. Duncan was referring to in his testimony was my statement that parents pulling their children out of public school would hurt the school’s bottom line: fewer children means fewer tax dollars to the school. My point was that public schools that aren’t delivering a product valued by parents risk losing students. So, if schools want to retain the students they have, they need to offer as good an educational product as their competition which may be private schools.

Thank you. Sincerely, J. Scott Moody, VP of Policy, Cornerstone Policy Research

Senator James Forsythe presenting the proposed program to the House Ways and Means Committee, 1/23/12

posted Jan 28, 2012, 2:35 AM by Bill Duncan   [ updated Jan 28, 2012, 2:41 AM ]

Senator James Forsythe presenting the Education Tax Credit proposal

Testimony of State Rep. Marjorie Porter Hillsborough 1, 1/23/12

posted Jan 26, 2012, 3:47 PM by Bill Duncan   [ updated Jan 27, 2012, 7:58 AM ]

Testimony on HB 1607 

Thank you Mr. Chairman.  For the record, my name is Marjorie Porter, and I represent Hillsborough District 1, which includes the towns of Antrim, Hancock, Hillsborough, and Windsor.

In addition to my responsibilities here in Concord, I also serve on the school boards for the Hillsboro-Deering School District, and SAU 34.  It is as a school board member that I stand in opposition to HB 1607.

Allow me to give you some background information.  Hillsboro-Deering currently enrolls 1,320 students.  521 of them, or 39.4%, are eligible for free and reduced lunches.  I suspect the number is actually higher than that, but people are proud in our town.  Many will not ask for help, even if they need it.  

216 of our students, or 16.4%, are identified as having special needs.  We currently have 42 homeless students.

As you can see, we have a challenging population to educate.

Hillsboro-Deering is an SB 2 school district.  Our school boards, past and present, have been frugal, but the rising costs of health insurance and fuel oil, among others, have hit us hard these past few years.  The additional cost to the district as a result of the state’s decrease in contributions to the state retirement system for our employees has also left us scrambling.  The increases in these expenses over which we have no control have been between $400,000 and $600,000/year in the years I’ve served on the board. 

The district has been functioning with a default budget, or a budget set at default level funding, for most of the past 10 years, making it most difficult for us to meet the needs of all our students.  Even so, due to DRA magic, the school’s portion of the property tax soared this year.  As a result, the budget we are bringing forward this year is below level funding, and will result in loss of staff and programs.

Now, let’s say 26 of our students, 2 each from grades K-12, apply for and receive scholarships under the provisions of HB 1607, resulting in a loss of more than $90,000 in state funding to our district.

Our expenses would not go down.  We would still need the same number of teachers per grade level, and the same number of administrators, so our employee costs would not decrease.  We would still need to maintain our aging buildings, and heat them.  Those expenses would not decrease.  The costs for transportation and supplies would not decrease.  The only thing that would decrease is the help we get from the state.  We would be forced to go to the local property tax payer to recoup these funds.  So for sure local property taxes would increase.  Or we would be forced to reduce the quality of the education we provide, by cutting more programs or staff.

Unlike public schools, private schools are not compelled by law to accept students identified with special needs.  I doubt many would be eager to enroll our special needs students who have behavioral challenges, or who need one-on-one help with toileting or medications.  So it is highly unlikely that many of these 26 students who apply for and receive scholarships under HB 1607 would be special needs students.  Most likely, most of our special needs students would be staying with us, and we would continue to absorb the ever increasing costs of educating them.

It has been said this program would give “poor kids choice too.”  Again I have my doubts.  My partner and I own and operate a private preschool/kindergarten in town.  We are former public school teachers with advanced degrees.  We offer an excellent program.  We run the program out of my home to keep expenses down.  It costs our clients $2660/year to send their four-year old to our three-morning a week preschool program.  The $2500/year scholarship offered under this bill would not cover our tuition charges for this program. 

For folks in Hillsboro, the closest private schools are in Concord, Manchester, Keene, or Dublin—at least a 25 mile drive.  Tuition costs vary for these schools, but for information purposes, Bishop Brady High School in Concord charges a tuition of $9350/year; the Derryfield School $26,435, the Dublin School $26,650.

I doubt that many, if any, of our free-and-reduced lunch-eligible families, or any of our homeless families, would be able to afford the additional $6000-22,000/year to send their child to private school, and transport them there.  These students would most likely be staying with us, and we would continue to absorb the ever increasing costs of educating them.

The bottom line is that our school district would lose some of our motivated, easier to educate students, we would be left with a higher percentage of challenging students to teach, and we would have fewer funds with which to do the job.

I urge the committee to think long and hard about the potential impact this bill will have on Hillsboro-Deering and other districts like it all over the state of New Hampshire.  Less state money means increased property taxes, or decreased quality of our public schools.  We can’t afford either.

Thank you.

Testimony of James Pinard, of the Granite State Christian School Association, to the House Ways and Mean Committee, 1/23/12

posted Jan 25, 2012, 2:44 PM by Bill Duncan   [ updated Jan 26, 2012, 6:39 PM ]

Mr. Pinard makes a number of the key points made by advocates for vouchers. Elements of this very important presentation are transcribed below.
At 3:14 (3 minutes, 14 seconds): "It the same old song I hear. We've got to rescue public education. We've been rescuing it for 40 years! And where are we today? It's time that we began, instead of signing the same old song, let's begin to look at what the market can do. And I heard some statements before that I know that some people here hate and despise the market but believe me if you work in the markets you've got to produce the goods.

"And so if these schools don't produce the goods, they're not going to be there. Parents aren't stupid. The reason they keep sending their kids to public school is they have very little alternative."
"It is always within the context of some world view that education takes place. There's no neutrality in the public school system. The public schools of New Hampshire are no exception to this fundamental premise.

"And their reigning world view is that of a relativistic secular humanism which denies that there are any absolutes - which, of course, in a version of an ......

5:15 "Our nation, our state and our local communities are indeed facing a financial crisis of such proportion that it may well impact us negatively for generations to come if not dealt with in an appropriate and decisive manner. We cannot afford to continue with business as usual. We are confronting, educationally, an entrenched and bloated and centralized bureaucracy which holds us hostage to their world view.

"This must come to an end.

"We need leaders of wisdom and courage who will rise to the occasion and chart a new course by bringing freedom of choice and competition into our educational process so that such opportunities will extend beyond the province of the well to do.

"If not you, who; and if not now, when?"

Audio, House Ways and Means, 1/23/12

posted Jan 25, 2012, 10:56 AM by Bill Duncan

Bill Duncan, House Ways and Means, 1/23/12

posted Jan 25, 2012, 2:07 AM by Bill Duncan   [ updated Jan 25, 2012, 10:55 AM ]

Testimony on HB 1607 establishing an education tax credit program

before the

Ways and Means Committee

of the

New Hampshire House

January 23, 2012


Bill Duncan


Thank you, Mr. Chairman, for the opportunity to speak on HB 1607.  I will speak in opposition to the bill.

I’m Bill Duncan, from New Castle.  I’m a retired software entrepreneur.  My children are in their 30’s now but they’ve been home schooled, public schooled and private schooled.  We’ve done it all.

I’m here today, though, as a taxpayer concerned about HB 1607 because under this bill as currently drafted we could be spending over $100 million in 5 years on private, religious and home school vouchers or scholarships. 

Over the weekend I read that HB 1607 may be amended to include the same state adequacy grant recovery provision that is part of SB 372.  That’s clearly necessary because the savings the Fiscal Note says would accrue to the state would not actually happen.  The transition funding continued in the stabilization grant provision of HB 337 means that that savings would not have materialized. 

I also read that Senator Forsythe said that the bills will be amended to “ensure aid is targeted to needy students.”  I assume that means students qualified for the free and reduced lunch program.  Depending on what the amendment actually says, that could be an improvement. 

But no matter what the students’ incomes are, the whole idea of using public funds to induce families to take their children out of the public schools and put them in private, mostly religious, schools just doesn’t make sense.  Voucher/ETC programs fit where schools are failing. Our schools are not failing.  Especially in this era of deep cuts it is hard to see why the state would now spend tens of millions of dollars – wherever it comes from – doing this.

I do understand the “choice” rationale.  “Give parents school choice.  Don’t make them hostage to the monopoly government-run schools.” 

You say it right up front in the bill, that the purpose is to:

“Allow maximum freedom to parents and independent schools to respond to and, without governmental control, provide for the educational needs of children…”

So you want to use government money for parents to escape government control.  I do get that that’s the purpose of this bill.  But I do not believe that dismantling our public school system to replace it with private and home schools is a legitimate public purpose for state money.

Exhibit A to my testimony is a flow chart showing how the program works:

The bottom is the current system.  State Aid, State Wide Education Property Tax funds and local property tax funds go to each school district.


The top part shows how the Education Tax Credit would work in year 1:


1.       First, the state makes up to $15 million in tax credits available in the first year.

  1. Then, businesses give up to $20 million to new Scholarship Organizations.
  2. The Scholarship Organizations split the money between private and public school students.
  3. Then the state takes back an average of $4,112 per public school scholarship student to off-set the tax credits to business. 


These numbers could change with amendments to the bill, but the basics do not change.  This is a pretty involved process to siphon public money into private schools.

Exhibit B is a financial projection I’ve done based on the bill as currently written.  This is just using the figures straight out of the bill.  It’s hard to see, even aside from administration costs, how the program could ever be revenue neutral.   

So HB 1607 would cost a lot.   And there are no real benefits?

Most recipients will probably be students would could have gone to a private without the scholarship.  For low income people, a $2,500 scholarship would not help that much toward most private school tuitions.

According to the minutes of the SB 67 committee:

       The average cost of a private education in NH

      Religious Elementary $5,228

      Secular Elementary $15,745

      Religious Secondary $7,664

      Secular Secondary $24,711

      Boarding $47,092


If you target only a portion of the scholarships, the rest would go to students who do not need them.  The way the bill reads now, most will already going to private schools!

And there is no accountability for the academic performance of private schools getting all that new money.  Advocates say those schools will be better, but how would we know?  The bill requires no testing.  And the program does not offer the choice of going to an out-of-district public school, where we could monitor the academic performance.

One of the leading national organizations advocating for "school choice" says this about accountability:

"The Alliance for School Choice and our affiliate, the American Federation for Children, support strong, commonsense accountability provisions for private school choice programs to ensure the highest level of program quality and sustainability. To achieve this goal, we support public policies that allow for significant transparency to parents, policymakers, taxpayers, and independent evaluators in order to show the effectiveness of these programs. Responsible accountability standards demonstrate both a serious commitment to transparency while ensuring that participating schools maintain their autonomy.


"We believe the school choice movement should encourage states to create new legislation and improve existing legislation so that there is significant transparency to all parties to show the effectiveness of these programs and the schools that participate in them. We also believe that academic information, including both snapshots of academic achievement and some measure of student gains, should be provided to parents and the public, both for voucher programs and tax credit scholarship programs."

As currently written, this is a large program.  It could be giving $36 million to 17,000 students every year by the 5th year.  

But even on a smaller scale, it would have a large negative impact on our schools, taking money and students out of the schools that are already suffering declining enrollment just from basic demographic changes.  Even Cornerstone Research said on NPR last week how damaging it would be to take children out of the public schools under these conditions. 

The message to public schools would be that their Legislature has given up on them and walked away.  And they’re actually doing a great job!

It is clear what a bad deal this is for the state and the taxpayers. 

I ask you to oppose HB 1607.

I am happy to answer any questions you might have.




Jeff McLynch, NHFPI, House Ways and Means, 1/23/12

posted Jan 25, 2012, 2:06 AM by Bill Duncan   [ updated Jan 25, 2012, 2:20 AM ]


Press Release

FOR IMMEDIATE RELEASE            January 23, 2012

CONCORD - A proposed tax credit to subsidize students attending private, religious, or home schools would drain critical resources from public schools and other vital services, according to those who testified against House Bill 1607 today.

The House Committee on Ways and Means held a public hearing on the bill, which would create a tax credit for businesses that contribute to private scholarship organizations. The money would be used for subsidies to students attending private, religious, or home schools. A hearing on similar legislation, Senate Bill 372, is scheduled for the Senate Education Committee tomorrow at 1 p.m.

"House Bill 1607 and Senate Bill 372 would be costly for state officials to implement and would divert business tax revenue from public services to private interests. In particular, state aid to public schools would likely suffer, even though there is little evidence that students receiving subsidies to attend private school do better academically than their public school peers," said Jeff McLynch, executive director of the New Hampshire Fiscal Policy Institute.

In particular, McLynch cited the findings of a July 2011 report by the Center on Education Policy, which reviewed numerous studies on the impact of publicly-funded voucher programs on student achievement and found "no clear advantage in academic achievement for students attending private schools with vouchers."

"In light of this research, a major diversion of public funds to private schools is, at best, difficult to justify," he said.

Data from the American Community Survey indicate that the typical income for a family with a child in private school was $97,200 in 2010, 25 percent higher than the income for a family with children solely in public schools. Yet, as McLynch observed, both pieces of legislation would ultimately permit all tuition subsidies to go to students who may never have attended public school in New Hampshire.


The House Committee on Ways and Means met Monday, January 23, to receive public input on legislation that would create a tax credit for businesses that contribute to private scholarship organizations. The money would be used for subsidies to students attending private, religious or home schools.

House Bill 1607 would be costly for state officials to implement and would divert scarce public resources to private interests. In particular, state aid to public schools would likely be cut even though there is no evidence students receiving subsidies to attend non-public schools do any better than their public school peers.

Executive Director Jeff McLynch urged the committee to oppose the legislation. His testimony follows:


Chairman Stepanek, Representative Almy, Members of the Committee, thank you for the opportunity to appear before you this afternoon.  My name is Jeff McLynch and I am the Executive Director of the New Hampshire Fiscal Policy Institute (NHFPI), an independent, non-partisan organization dedicated to exploring, developing, and promoting public policies that foster economic opportunity and prosperity for all New Hampshire residents, with an emphasis on low- and moderate-income families and individuals.

I am here today to urge you to oppose HB 1607, a bill to create an education tax credit as part of New Hampshire’s Business Profits Tax (BPT).

HB 1607 would be costly for state officials to implement and would divert business tax revenue from public services to private interests. In particular, state aid to public schools would likely suffer, even though there is little evidence that students receiving subsidies to attend private school do better academically than their public school peers.

More specifically, HB 1607:

Would lead to a sizable reduction in funding for public services generally and likely for public schools in particular

As you know, the aim of HB 1607 is to create a new credit as part of the Business Profits Tax for contributions companies make to private scholarship organizations.  While it is unclear how many students may receive tuition subsidies from such organizations, the bill does stipulate that no more than $15 million in tax credits may be granted in fiscal year 2013, the first year of the program.

Given the current fiscal climate in New Hampshire, this means that the state will almost certainly have to reduce spending on a dollar-for-dollar basis, up to the maximum amount of credits granted, to keep the budget in balance.  At the time the fiscal year 2012-2013 budget was adopted, the Office of the Legislative Budget Assistant’s Surplus Statement showed a Revenue Stabilization Balance of $11 million at the end of the biennium, contingent upon the receipt of $10 million in proceeds from the sale of property at the Lakes Region Facility.  Given that finding, as well as the disappointing trend in revenue collections through December of last year, it seems unlikely that surplus funds alone could compensate for the revenue loss associated with the new credit.

HB 1607 does not specify any spending reductions, but companion legislation in the Senate, SB 372, does provide that, should a student leave a public school to attend a private institution as a result of a tuition subsidy received under the program, the school district he or she previously attended will lose the adequacy aid associated with his or her attendance.

However, since a large and growing share of the tuition subsidies distributed under the program may go to students who never attended a public school, this provision may not be sufficient to keep the state budget in balance over time.

What’s more, the revenue loss associated with HB 1607 and, by extension, the spending cuts it would force, may grow larger over time.  The bill would allow the maximum amount of credits granted to rise by 25 percent in any fiscal year in which the amount of contributions made to scholarship organizations in the prior year exceeds 90 percent of the total tax credits issued.  Consequently, depending upon the level of contributions to scholarship organizations, the state could see annual BPT revenue fall by $20 million or more within five years time.

Would divert scarce public resources to families that already have the financial ability to enroll their children in private schools

In its current form, HB 1607 would allow students currently attending private schools or receiving instruction in their homes to receive half of all tuition subsidies issued in the first year of the program.  More importantly, the bill would gradually increase that allotment, so that by 2017, it would permit every tuition subsidy for which a corresponding tax credit is issued to flow to students already attending private schools or who never attended a public school in New Hampshire.

Moreover, HB 1607 mandates that each scholarship organization provide an average tuition subsidy of $2,500 per year.  This sum is well below the average cost of attending private school in New Hampshire. Information compiled by this past fall’s education tax credit study committee fall indicates that the average cost of attending a religious elementary school in New Hampshire was roughly $5,200 annually and the average cost of attending a religious secondary school was nearly $7,700.  For secular elementary and secondary schools, the average cost of attendance was higher still:  $15,700 and $24,700 respectively.[i]

Many low and moderate income families will remain unable to pay these tuition bills even with a $2,500 subsidy and those families that can are less likely to need the subsidy to begin with.

Thus, it is likely that HB 1607 will, in time, largely subsidize decisions that many families would already have made without the tax credit and, by extension, direct millions of dollars in public funds to families that already have sufficient means to send their children to private schools.  Indeed, data from the 2010 American Community Survey indicate that the median income for New Hampshire families with children attending private schools is over $97,200, 25 percent higher than the median income for families with children attending public schools.[ii]

Ignores research that finds little meaningful difference in performance between students who receive subsidies to attend private schools and their counterparts who remain in public schools.

In July 2011, the Center on Education Policy (CEP) published a major review of a wide variety of studies produced over the past decade on the impact of publicly-funded voucher programs on student achievement.  Entitled Keeping Informed about School Vouchers, it concluded that, based on assessments of programs in Cleveland, Milwaukee, Washington, DC and elsewhere, there is “no clear advantage in academic achievement for students attending private schools with vouchers.”[iii]  CEP further notes that, “while some studies have found limited test score gains for voucher students in certain subject areas or grade levels, these findings are inconsistent among studies, and the gains are either not statistically significant, not clearly caused by vouchers, or not sustained in the long run.”[iv]

In light of such research, a major diversion of public funds to private schools is, at best, difficult to justify, particularly when such a diversion could lead to a loss of assistance to public schools in excess of any savings they may realize from a drop in attendance.

Would impose new and substantial responsibilities upon the Department of Revenue Administration (DRA) at a time when the Department already faces serious staffing challenges.

Under the provisions of HB 1607, DRA would be charged with, among other duties:

  • Developing, verifying, and updating the list of scholarship organizations that could receive and distribute funds eligible for the tax credit;
  • Notifying the relevant scholarship organizations in those instances in which students receive subsidies from multiple organizations;
  • Monitoring and investigating potential violations of the statutes and regulations governing the tax credit, and;
  • Compiling quarterly reports on the number of students applying for scholarships eligible for the tax credit, the amount of subsidy they receive, and the schools they attend.

As the aggregate amount of tax credits that businesses could receive would be capped at a prescribed dollar amount each year, the Department would presumably also be required to determine whether that cap had been reached and, if so, to calculate the amount of credit each business could claim.  Of note, HB 1607 fails to detail how the Department would allocate credits under such circumstances.

Accordingly, the fiscal note accompanying HB 1607 states that the bill “would place considerable administrative, auditing, and information technology related burdens upon the Department that could not be implemented at the current level of staffing and funding.” Yet, as written, the bill provides no additional resources to the Department to carry out these duties.  What’s more, the fiscal year 2012-2013 budget approved by the Legislature last June reduces funding for the Department by close to $2.5 million.  As result, the Department has laid off 14 of its 44 auditors in the past six months, a move that will likely reduce the amount of audit revenue the state collects.

In sum, I urge the Committee to recommend HB 1607 inexpedient to legislate, as it would fail to improve education for New Hampshire’s children, but would require substantial cuts in public services and create new and costly oversight responsibilities for the Department of Revenue.

Once more, I thank you for the opportunity to testify and would be more than happy to answer any questions you may have.

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