School Vouchers

Citizens Count Editor

The phrase “school voucher” is casually used to describe many different programs that provide public funding for students outside the public school system.

New Hampshire has just one voucher-like program in place, the education tax credit program.  That program gives businesses a tax credit for donations to a scholarship program for private, parochial, and home school students.

The New Hampshire Legislature has also considered — but so far rejected — an “education savings account” program.  That program would have allowed students to spend the equivalent of the per-pupil share of state school funding on private, parochial, and home school expenses. 

Education tax credit program

In 2012 New Hampshire enacted the education tax credit program, which gives businesses a tax credit for 85% of a donation to an approved scholarship program.  The scholarships are administered by private nonprofits approved by the Department of Revenue Administration.  The scholarships may be used for private school, home school, tutoring, or other education expenses. 

If a student leaves public school with the help of a scholarship, the public school no longer receives state money for that student.  If a public school loses more than 0.25% of its total state funding due to the scholarship program, the state provides that school with supplemental funding.

Visit the Department of Revenue website for the education tax credit program 

Education tax credit program restrictions

There are many restrictions on education tax credit scholarships.  Here are some of the most significant restrictions:

  • The average value of a scholarship cannot exceed about $2,800 (the exact value is determined each year by the Department of Revenue Administration, according to changes in the Consumer Price Index). 
  • If a student is already attending private school, his or her family must be under 300% of the federal poverty level to be eligible for a scholarship.
  • At least 40% of the scholarships must be awarded to students who qualified for free or reduced lunch at their last public school. 
  • The total value of business tax credits from scholarship donations can grow by no more than 25% each year.
  • Only 10% of tax credit donations may be used for the nonprofit’s administrative expenses.

Education savings account program

In 2017 Sen. John Reagan introduced SB 193, which would establish “education savings accounts.”  This would essentially allow students to take a share of state public school funding as a scholarship.  Although the House ultimately killed SB 193, the concept still has many supporters.

Right now public schools in New Hampshire have two funding sources: state government and local property taxes.  State government provides a set amount of money for every pupil, about $4,000.  Low-income students, special education students, and English language learners all get a slightly higher amount of per-pupil funding. 

An education savings account program would allow a student to apply for the per-pupil amount of state school funding as a scholarship for private school, home school, or other educational expenses.  The student’s public school would lose that pupil’s share of public funding. 

Education savings account restrictions

Some education savings account programs in other states limit scholarships to special education students, low income students, and/or students in under-performing schools. 

Some states also require any student with an education savings account to complete an annual assessment to prove that the public school funding is paying for an adequate education.

Education savings account programs may be managed by government officials, a nonprofit, or even a for-profit company, depending on the state.

PROS & CONS

"For" Position

By Citizens Count Editor

“NH should offer publicly-funded scholarships for private and/or home schooling expenses.”

  • Parents and students should be empowered to choose the education that is best for them.  The education tax credit program, education savings accounts, and other voucher programs make choice available to all families by providing financial assistance to students that otherwise could not afford private or other schools. This choice improves educational outcomes for individual students and encourages schools to compete to provide the highest quality education. 
  • New Hampshire’s education tax credit program is tailored to help those who are most likely to struggle in public schools: low income and special education students.  New Hampshire could choose to similarly limit an education savings account program, which would help even the playing field for low income and special education students.
  • The education tax credit program is only funded by businesses who voluntarily donate to scholarships, so the program does not burden all taxpayers with funding private and parochial schools they otherwise might not support. 
  • The New Hampshire Supreme Court rejected a challenge to the education tax credit program in 2014, ruling that individual taxpayers could not prove they were harmed by the program. 
  • The education tax credit program has not had a large negative impact on public schools, in part because the state has pledged to provide public schools with supplemental funding if a large number of scholarship students leave a district.  New Hampshire could pledge to similarly provide supplemental funding as part of an education savings account program.  In fact, fewer students in public schools means lower student-to-teacher ratios and potentially fewer costs.
  • New Hampshire is right to have a nonprofit manage the education tax credit program, because private organizations often run more efficiently than government.

"Against" Position

By Citizens Count Editor

“NH should not offer publicly-funded scholarships for private and/or home schooling expenses.”

  • The education tax credit program funnels business tax revenue out of public schools and into private scholarship accounts.  Therefore, the program is essentially spending tax dollars on private schools, including religious schools. An education savings account program could similarly send state taxpayer dollars to religious schools.  This violates the rights of taxpayers that do not want to support religious schools.
  • Whenever a student leaves public school, his or her school loses the per-pupil funding from the state.  By enabling students to leave public school, the education tax credit program and education savings accounts therefore weaken state support for public schools.  This increases the burden on local taxpayers to fund education.
  • There is very little oversight of the performance of private and home school students in New Hampshire.  This makes it difficult for the state to ensure that students utilizing education tax credit scholarships are receiving an adequate education, as required by the state constitution.  The state would have a similar challenge monitoring the performance of students with education savings accounts.
  • According to the National Center for Education Statistics, the average yearly private school tuition is over $10,000.  With an average scholarship under $3,000, the education tax credit program does not make private school significantly more affordable for low income residents.  Education savings accounts also would not offer students more than about $4,000 per year.  It is therefore misleading to characterize the program as primarily benefiting low income residents. 

LEGISLATIVE HISTORY

Signed by Governor

Amends the education tax credit statute to allow taxpayers to utilize this credit against the interest and dividends tax. At the time of this bill's submission, the education tax credit is given to businesses that donate to a scholarship program for homeschool and private school students.

Signed by Governor

Makes various administrative changes to the Education Business Tax Credit Scholarship Program. For example, this bill changes the program year from January-December to July-June.

Killed in the House

States that "A receiving nonpublic school or educational service that accepts students benefiting from public funds through scholarships, tax credits, freedom savings accounts, or vouchers shall be required to perform background checks on all employees and volunteers and follow all federal and state nondiscrimination laws."

Signed by Governor

Allows a school district to assign a child to a non-sectarian private school if there is no public school for the child's grade in the child's resident district. The bill was amended to also require the non-sectarian private school to administer an annual assessment.

Signed by Governor

Modifies the Education Tax Credit Program, which gives businesses a tax credit for donating to a scholarship fund for private, parochial, and homeschooled students. For example, this bill allows scholarships for college, tutoring, and distance education. The bill also extends the deadline for making donations and distributing scholarships.

Killed in the House

Repeals the Education Tax Credit Program, which gives businesses a tax credit for donating to a scholarship fund for private, parochial, and homeschooled students.

Killed in the House

Repeals the Education Tax Credit Program, which gives businesses a tax credit for donating to a scholarship fund for private, parochial, and homeschooled students.

Interim Study

Establishes the "education freedom savings account program." This allows a parent to contract with a scholarship organization so that state education funding is transferred to the student's scholarship account rather than to the municipality in which the student resides.  The House amended the bill to limit the scholarships to certain students, particularly low income students, students in underperforming schools, and special education students.  The amended version also requires any student receiving a scholarship to complete an annual assessment to ensure academic progress. Lastly, if enough students leave a school district, the state will reimburse the school for some of the lost state education funding.

Tabled in the House

Establishes the "education freedom savings account program" for children with disabilities. The program allows the parent of an eligible child to receive funds from a scholarship organization to pay for education expenses. Once a parent contracts with a scholarship organization, the state must transfer funds to the parent's account equal to 90% of per pupil state education funding.

Killed in the Senate

Allows a school district to assign a child to another public school in another school district or to an approved private school if there is no public school for the child's grade in the child's resident district.

Vetoed by Governor

Allows a school district to assign a child to an approved private school if there is no public school for the child’s grade in their resident district. This bill also allows a school board to make a contract with a private school to provide for the education of a child who resides in a district which does not have a public school at the child's grade level.

Killed in the House

Repeals the education tax credit program, which gives businesses a tax credit for donating to a scholarship fund for private, parochial, and homeschooled students.

Killed in the Senate

Repeals the business tax credit for school scholarships, also known as the education tax credit program.

Tabled in the Senate

Repeals the education tax credit program, in which businesses receive tax breaks for contributing to a scholarship fund for low income students that wish to attend private school.

Veto Overridden

Establishes a tax credit for businesses that contribute to a scholarship fund for students who wish to attend private, parochial, or home schools.

Should New Hampshire allocate tax revenues for private and home schooling costs?

FOR
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AGAINST
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Issue Status

School vouchers will be back on the agenda in 2019, with Rep. Dick Hinch proposing a bill "establishing education savings accounts for students". The details of the bill have not yet been released. 

See where Rep. Hinch stands on the issues

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