N.H. House votes to repeal school tax credit

Thursday February 21, 2013

CONCORD, N.H. -- New Hampshire’s House voted Wednesday in favor of repealing a new program giving businesses a tax credit for donating to scholarship organizations that send students to private or public schools, but the effort to do away with the year-old law faces an uncertain future in the Republican-controlled Senate.

The bill passed by the Democrat-controlled House -- which has the support of Democratic Gov. Maggie Hassan -- would undo the measure passed last summer by Republicans despite a veto by then-Gov. John Lynch. Repeal supporters have said the law gives money to private and religious schools without accountability at a time when the state is struggling to fund public schools.

Whether the bill reaches Hassan’s desk will depend on the Senate, where a key swing vote, Sen. Nancy Stiles, R-Hampton, said Wednesday it was too soon to consider repeal.

Rep. Mary Giles, D-Concord, said the tax credit law needs to go.

"Our New Hampshire constitution specifically prohibits money from going to religious schools," she said.

Indeed, the law’s constitutionality is being challenged in court by three civil liberties groups. The next hearing in the lawsuit is scheduled for April 26, but the court has already ordered that scholarship organizations be made aware they might not be able to distribute money to students, depending on the outcome of the lawsuit.

Repeal opponents argue the law’s constitutionality was thoroughly vetted by the legislature before its passage and repealing it would hurt low-income families by denying them greater academic choice.

"This is private money being used to provide private scholarships to children from low- and moderate-income families," said Rep. David Hess, R-Hooksett.

Under current law, students attending private schools, public schools outside their home district and home schooled students can qualify for scholarships if their family meets income requirements. The maximum income for eligibility is $57,000 for a family of three and $69,000 for a family of four.

The business donations would go to organizations created to provide scholarships of up to $2,500 to eligible students. Businesses have thus far donated $136,000 of the $3.4 million allowed in the first year.

Hess said tax credits are not unusual in New Hampshire, pointing to credits for research and development as well as North Country economic development.

Hess rejected the characterization by repeal supporters that the scholarships are vouchers, saying vouchers can be used as the recipient sees fit whereas there are limits on how the scholarships can be used.


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