Senate Blocks Ed Tax Credit Repeal Bill

The New Hampshire Senate voted 13-11 on Thursday to table House Bill 370, the bill that would repeal the education tax credit program, in a party line vote led by Republicans seeking to scuttle the legislation.

Sen. Andy Sanborn (R-Bedford) said the law was a step toward school choice, in that it helps an estimated 1,400 children in the state.

"This is about helping poor children," he said during the Senate debate. "This is truly about fairness."

Senate Minority Leader Sylvia Larsen (D-Concord) called the program unconstitutional, and she echoed members of the Democratic caucus who called it poor tax policy.

Sen. Jeb Bradley (R-Wolfeboro) urged colleagues to give the program a chance to work. "Parents," he said, "are flocking to this opportunity."

The bill to repeal the program has generated controversy all year. Ashley Pratte, executive director of Cornerstone Action, accused those pursuing repeal of waging a war on low income families.

Bill Duncan, who is challenging the legality of the law, has penned several blog posts calling the law an unconstitutional and blatant attempt to undermine public schools.

Gov. Maggie Hassan issued this statement after the vote:

"It is disappointing that a majority of the New Hampshire Senate have decided to stand by the misguided school voucher program. Ensuring that our workforce is ready for the jobs of today and tomorrow means that our public schools must be able to help New Hampshire’s young people develop the skills, knowledge, and innovative thinking needed in a 21st century economy. At a time when the state and local communities are struggling to adequately fund K-12 education, diverting taxpayer dollars to religious and private schools with no standards or accountability puts an added burden on our communities and sends the wrong message to our young people."

The House passed the bill, 188-151, back in February.

The education tax credit against the business profits tax took effect on June 27, 2012. Here is the link to the New Hampshire law.

Harrell Kirstein, spokesman for the New Hampshire Democratic Party, panned the program as a "reckless" education voucher pushed through the 2012 Tea Party Legislature. He claimed Bradley and Sen. Nancy Stiles of Hampton, among other Republicans, were turning their back on taxpayers by embracing the law.

"The education voucher program could cost New Hampshire public schools 90 million dollars over ten years, divert that funding to private and religious schools, and downshift costs to local communities and property tax payers," Kirstein said in a press release.

Charlie Arlinghaus, president of the Josiah Bartlett Center, praised the vote. In a statement after the vote, he said, "The means-tested school choice program adopted last year is designed to give poorer children additional educational opportunities. Repealing it before it even began would have been short sighted and political. The program is very small and should be given a chance to work before we decide whether or not to keep it. The Senate today did a good job to set aside politics in favor of opportunity."

Senator Stiles maintained the program increases choices for parents and students. In a statement from the Senate, based on her floor remarks, she said,

"There are almost 700 children who have applied for these scholarships. These children come from families with an average household income of less than $45,000 for a family of five and more than 50% of the applicants qualify for free and reduced school lunch. Our Education Tax Credit Scholarships will help some of our neediest children in New Hampshire get the education they deserve."

“We all understand each child learns differently and has different needs. One size does not fit all, and the Education Tax Credit Scholarship program empowers parents to choose the school that is the best fit for their child. Scholarships are 100% means tested and awarded to school-aged children in families with a household income of not more than 300% of the federal poverty level. Family income is verified, and scholarships are awarded to students based on highest need.” 

Sen. Peggy Gilmour, D-Hollis, had urged her colleagues to overturn a committee recommendation and then pass the repeal bill. In a statement, she said,

"I am vehemently opposed to the structure of the NH Education Tax Credit. It is terrible tax policy. The rules establish new definitions, organizational requirements, operational rules, and involve not one, but two state agencies. On the State’s website, the complex rules of the education tax credit take up 9 printed pages. In contrast, the R&D tax credit that this body so proudly doubled a month ago takes less than a page."

"Our tax laws must be simple and fair, we know our federal tax system today is a horrible and complex mess because Congress has allowed special interests of all stripes to install complicated rules that provide benefits in a manner that is hidden from public scrutiny and accountability. The program has no accountability of public money. It allows private, non-profit corporations to determine where public education dollars are spent. Even with pages of new complex rules it fails to set up an accountability structure. How can we in good conscience continue to allow such a program to be law?"