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Education business tax credit program upheld; Hassan asks lawmakers to repeal the law

State House Bureau

August 28. 2014 10:30AM

CONCORD – The state Supreme Court Thursday vacated a Strafford County Superior Court decision declaring a new business tax credit for scholarships for private- and home-school students unconstitutional because it allowed state money to go to religious schools.

The Supreme Court sent the case back to superior court saying the petitioners who challenged the constitutionality of the law have not suffered personal injury from the law and therefore have no standing to bring the challenge.

Lawmakers passed a law in 2012 that makes it easier for taxpayers to challenge governmental actions after the Supreme Court earlier ruled “a party questioning the validity of a law must show that some right of his is impaired or prejudiced.”

Gov. Maggie Hassan urged lawmakers to repeal the program and like others was disappointed the Supreme Court did not rule on the merits of the law.

“I continue to believe that the voucher tax credit is unconstitutional and am disappointed that the Supreme Court did not rule on the underlying issue. The voucher tax credit is bad public policy for public education in New Hampshire and our taxpayers, diverting millions of dollars in taxpayer money with no accountability or oversight to religious and private schools at the expense of public schools and property taxpayers across the across the state,” Hassan said. “A robust and rigorous public education system is critical to better preparing our students for good jobs and successful careers, and I believe the legislature should repeal this misguided law in order to dedicate more of our limited resources to ensuring access to quality public education for all of our young people.”

For the 2014 fiscal year, businesses applied for $58,580 in tax credits while $49,725 in scholarship requests were made. The program allows up to $5.1 million in business tax credits for the program.

The prime sponsor of the House version of the bill, former House Majority Leader D.J. Bettencourt, said he is thrilled the Supreme Court decision keeps the NH School Choice Scholarship Act intact and on the books.

“The result of today's decision is great news for New Hampshire's students, families, businesses and taxpayers,” Bettencourt said. “The legislature and Governor Hassan should now consider how to improve and grow the program to empower students and parents to achieve educational excellence.”

One of the plaintiffs, Bill Duncan of New Castle, founder of Advancing New Hampshire Public Education and a member of the State Board of Education, said the decision does a disservice to taxpayers.

“This decision on standing disenfranchises taxpayers, parents and students throughout the state,” Duncan said. “There may be other ways to challenge the voucher tax credit program in the future. School districts harmed by the program could bring suit or a future legislature could repeal it."

The effect of the ruling means the business tax credit program will continue under the law approved by the 2012 legislature which allows businesses to donate some of their business tax payments to the program that provides scholarships to low- and middle-income students to attend religious, private and home schools.

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