Testimony by Bill Duncan for the Senate Education Committee, 1/24/12

posted Jan 25, 2012, 2:34 PM by Bill Duncan   [ updated Feb 11, 2012, 4:02 PM ]

Testimony on SB 372, establishing an education tax credit program

before the

Education Committee

of the

New Hampshire Senate

January 24, 2012


Bill Duncan


Thank you, Madam Chair, for the opportunity to speak on SB 372.

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 as a taxpayer concerned that under SB 372 we could be moving tens of millions of dollars out of our public school system into the private, religious and home schools for no legitimate public purpose. 

The bill proposes to reduce the impact on the state budget by taking back “the adequate education grant” for each scholarship student coming out of the public schools. 

For all the pain this would inflict on school districts, however, the bill would still not achieve revenue neutrality.

Exhibit A to my testimony is my 10 year projection of the fiscal impact of SB 372.  I know that legislatively, you look only at the 3 year impact.  However, I want to clearly illustrate the long term problem the Legislature would be creating with the ETC program.  It would have become an established, assumed part of state government and suddenly be eating up unexpected revenue.  Senator Forsythe makes the point that there are a lot of dials and it could be adjusted.  That is true, but may or may not actually happen.

My projection is based on what I know so far from the bill but I will work with the Senator Forsythe to the extent possible to reflect shared assumptions in order to debate them in a useful way.

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 –inducing students to leave the public school system.


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…”

The school choice advocates who helped write the bill say it too.  Mr. Alan Schaeffer was credited twice at yesterday’s press conference with having written SB 372.  He told me afterward that he didn’t write it but provided the framework, which to me is pretty darn close.  On the website of The Alliance for the Separation of School and State, he asks and answers the question: Why Shouldn't the Government be Involved in Education?

"The Short Answer:

·         Government schooling stands in direct opposition to the liberty this country was founded on.

·         It fosters unquestioning obedience, acceptance of authority, herd mentality, and dependency.

·         It manufactures "equality" by lowering standards.

·         It discourages individuality, innovation, curiosity, creativity and overall excellence.

·         It undermines families and other relationships.

·         It undermines religious beliefs, values and morality.

·         It fosters social, psychological, emotional and intellectual dysfunction and promotes immaturity and perpetual adolescence.

·         It makes children the victims of political change, special interests, researchers, unions and social reformers.

·         It undermines the ability of parents to provide their children with the quality and type of education they desire for them."

Adam Schaeffer, the other SB 67 committee advisor who is here today to testify in favor of the bill, said in a September 6, 2011 blog post titled Yes, the Department of Education Is Unconstitutional:

“Tina Korbe at HotAir had a mostly-great post on Michele Bachmann’s completely correct observation that the federal government is not authorized by the Constitution to muck about in education.

“Specifically, Bachmann said, “[T]he Constitution does not specifically enumerate nor does it give to the federal government the role and duty to superintend over education that historically has been held by the parents and by local communities and by state governments.” Kudos to Bachmann for that. My colleague Neal McCluskey is the go-to guy on all of this, andexplains it very succinctly in many places.”

Andrew J. Coulson, Mr. Adam Schaeffer’s colleague at the Cato Institute’s Center for Education Reform, says in A Quick Guide to Scholarly Literature on School Choice

“In reality, the vast majority of sound empirical studies comparing competitive education markets to state-run school monopolies give the edge to markets. A few find no significant differences, and only the tiniest percentage find any sort of advantage to government operated schools. Moreover, the superiority of free market education is not limited to higher student achievement, but extends to a variety of positive social effects as well.”

I’m sure the Legislative sponsors of the Education Tax Credit must have a wide variety of reasons for supporting the bill, but the bill’s stated purpose is clearly aligned with the positions of those who helped draft it. 

And more importantly, the effect of the bill, together with many other bills in the Legislature this year, would be to start the process of dismantling New Hampshire’s public education system.

So SB 372 proposes to use government money to help 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 the state’s money.

I’ve given you  a longer written testimony for the record, but I’ll just make a couple of other quick points.

Other voucher programs are not a valid comparison for New Hampshire

There is no real parallel between the Education Tax Credit program proposed in SB 372 and the variety of voucher and ETC programs in other states. There is little similarity in size, program design, financial structure, educational situation or purpose among these many programs.

Vouchers and ETCs are a small part of the American educational framework.  Out of 50 million students in the US., there were 11 school voucher programs with 67,267 students last year.   There were 9 ETC programs with 122,972 students.  This is a marginal and, if anything, stalled movement.

Those that do exist vary widely:

Arizona has 3 small ETC programs, 2 for special purposes, with less that 3% of their students participating.  In its corporate ETC program, Arizona requires full academic accountability and public reporting from its participating schools.

Florida’s programs - 1 voucher and one ETC - are for children with disabilities.  And they require full public accountability from their participating private schools.

Georgia has a tiny voucher program for children with special needs and an ETC program strictly for children coming from public schools.  Out of 1.6 million public school children in Georgia - 8 times the number in New Hampshire - only 6,000 participate, fewer than the proposed first year of the NH program. 

Indiana has 1,000,000 public school children, of which 219 are in their highly publicized program.  It is targeted to poor children who must have been in a public school.  They can go to a public school out of their own district and get $4,500 scholarships.  Indiana requires standardized testing in the participating private schools.

Pennsylvania has 9 times as many school children as New Hampshire  and, after 10 years, has 38,000 children participating in an ETC program.  Pennsylvania defeated a voucher proposal this year.

Then there are the big city programs that all the studies have tracked.  They are targeted at manifestly troubled school systems and are part of a real effort to improve the public schools. 

After 16 years, Cleveland’s program has 5,000 students, out of a total student population of 50,000.  They target low income children exclusively and pay 90% of the tuition. And they require accountability.

The Washington DC started in 2004 and has 1,000 students in 2011, out of 44,000 total students.  The program is targeted to low income families and gives up to $7,500 in scholarship.  It has been studied extensively and has full academic accountability.

New Orleans has 1,000 children who must be poor and from an unacceptable school.

If anything, the tide is going out on these programs.  New Jersey and Tennessee have not been able to get a law passed.  Vouchers failed to pass in California, Michigan and Utah, though UT has a little program for kids with disabilities.

New Hampshire is running headlong into this with fast changing legislation and a program that is larger in proportion to its population of children than any other state program.  The extensive advocacy literature from all these other programs has no relevance in New Hampshire.

The scholarships are not needed.  Low income kids go to private schools now

In New Hampshire today, there is just about the same proportion of free and reduced lunch students in private schools as in public schools.  Parents who want to send their children to private schools don’t need a subsidy from the New Hampshire public school system to do it.  The voucher would surely induce some to go who would not have gone without the voucher. 

We will probably never know how many because just statistically, the way to program is structured, most of the money over the years will go to children in private schools.  It just becomes an entitlement that those families expect to get each year until their child graduates.

The lack of academic accountability is a real problem.

Supporters of SB 372 say that the accountability question is addressed by the free market – parents can vote with their feet.  I would say that that’s a pretty crude form of accountability applicable at the extreme. 

Accountability is a major issue in the school choice movement and most new voucher programs require some form of academic accountability from participating schools.  The Alliance for School Choice, 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."

New Hampshire law makers who do support transferring public school money to private schools should not support a program that does not exercise academic accountability and transparency over programs receiving this money.

Cornerstone quote on NHPR

A question came up at yesterday’s hearing about the legitimacy of my statement that, “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 question was whether I might have taken the statement out of context.

The Cornerstone representative said she did not remember hearing that.  For the record, here is the quote in context(underlined, below). 

On January 17, the NPR call-in show, The Exchange, held a discussion on HB 542 to enable parents to intervene in curriculum of their child.   Here is a link to the broadcast of The Exchange

4:50 minutes in, Rep. JR Hoell (R, Dunbarton), explaining how the law would work, says (5:55 minutes in), 

"...the child goes into a study hall and the parent pays for an outside learning center.  This is happening in Bedford....so I think there's a number of options.  Why does it have to be that the additional material is taught by the school system?  Maybe they can't come up with an agreement about the material but the parent says, "Then I'll go to a private school or I'll go to a private tutor.  Will that work?  And that may meet all the requirements."

9:40, Rhonda Wesolowski, President of NEA-NH: 

"Any parent, regardless of qualifications, can veto any lesson plan on any grounds.  That has wide open ramification for New Hampshire education."

10:00 minutes in, J. Scott Moody, Vice President of Policy at Cornerstone Policy Research and Cornerstone Action:  

"Fundamentally, it boils down to the question of parental rights....at the end of the day, the responsibility to educate a child is his or her parents'....they spend more time with their children, far more time than the eight hours a day they spend in the classroom.... and based on that knowledge...they can determine whether or not they need to look for alternatives.

"And, frankly, I think this is good for the school system...Competition is good in the private sector.  It's going to be good in the education sector as well.  

"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."

Essentially, what Rep. Hoell is proposing here is mini-private schools within the public schools and Mr. Moody is warning that that is better than the damaging alternative of taking the children out of the schools like the voucher program does. 

The attacks on New Hampshire public education are so wide and varied that advocates are running into each other on the battlefield.

The “this is a small program” theme

Supporters all make the point that SB 372 is really just a small program.  This is not at all true.  The proposed amendment does start with 2,000 fewer children than the original bill, but it would still fund over 5,400 students in the first year.  As a proportion of the school age students in the state, that is larger than Florida ETC program and the 13 year old Arizona program. Or Indiana, Ohio or Pennsylvania.  Any of them.  So this is not just a little pilot.  Our small state would be diving into the deep end.

And then it is allowed to grow at a compound rate of 25% per year.  Exhibit A shows how the magic of compounding applies to SB 372.  In the first 3 years it loses only $2 million, but over 5 years it loses $27 million and over ten years it has given 180,000 scholarship and lost $340 million.

People are passing around a graph from the Bartlett Center report.  It’s the one with all blue bars 10 feet long and the little tiny pink bars representing how tiny the proposed ETC program is.  The graph compares the $15-30 million start-up levels of the proposed ETC program to the whole $2.78 billion New Hampshire elementary and secondary education budget, which is paid for primarily by local property tax.  It is hard to see how that is relevant.

Why not compare it instead to the $45 million, 45%, cut the University System budget sustained last year or the State Grant of $578 million to the school districts.  If the author is saying $15 million growing to much more than that over time is not much money out of the state budget, there are a lot more educators and HHS clients who’d like to make that same case, including those who  would like a mere $7 million for the CHINS program.

Looked at this way, the House wants to take $7 million away from Children in Need but give hundreds of millions in vouchers to parent in no need of them.

Exhibit B is an alternate graph showing this trade-off.

Thank you. I would be glad to take any questions.

Exhibit B