CONCORD — Gov. John Lynch has vetoed a bill that would set up a scholarship program for students to attend private or religious schools.

The veto of Senate Bill 372, dubbed the “School Choice Scholarship Act” by supporters, was quickly met with criticism from Republican leaders who considered the legislation a signature accomplishment this year.

In his veto message Monday, Lynch said SB 372 would hurt public schools districts and “downshift” costs to local communities and taxpayers.

The bill would allow businesses to receive tax credits for donations to nonprofit scholarship funds, which would award scholarships averaging $2,500 to low and middle-income families to send their kids to private or parochial schools.

Lynch said the bill did not do enough to offset the costs to public school districts when students leave for private schools, taking adequacy payments with them. Lynch said the bill would cost school districts more than $3.6 million in the first year and more each year after, according to Department of Education calculations.

This bill “will downshift the cost of reduced adequacy payments to local communities and property tax payers, it allows private organizations to determine the use of public education funds, and does not fully target scholarship funds to students most in need of help with tuition and other educational expenses,” said Lynch in his veto statement.

The bill had wide support in both the Senate and House, and it appears likely that supporters will be able to muster the two-thirds majorities necessary to override the governor’s veto when the Legislature meets June 27.

House Speaker William O’Brien, R-Mont Vernon, said he was “disappointed” by the veto. “No parent should be forced to send a child to a bad school, and we should look for opportunities to allow parents to give their children the best chance possible to succeed,” he said in a statement.

The bill’s chief sponsor was Sen. Jim Forsythe, R-Strafford, who called veto “incredibly disappointing.”

Forsythe said the governor in his veto message made a number of “misleading or outright false claims,” pointing to Lynch’s contention that a “substantial portion of scholarships are available with no income restrictions and to students already attending private school.”

Forsythe said that in fact the bill requires that the scholarships only go to families earning 300 percent of the federal poverty level or less. The nonprofit scholarship organizations would be responsible for vetting eligibility.

“We’ve consistently reached out to the governor’s office to talk about the program and we just never got much feedback until now,” Forsythe said.

Under the bill, businesses would receive an 85 percent tax credit against state business taxes for their donations to scholarship funds.

In an effort to offset the impact to school districts, the program would be limited to $4 million in scholarships in the first year, then $6 million the next year and $8 million the third year. Money would also be allocated to partially compensate districts for lost funding.

Gubernatorial candidates also reacted to the veto, with Republican candidate Ovide Lamontagne saying in a statement: “It is time that we give lower income parents greater control over the education of their children, and allow them to select the best school available as determined by them, not by zip code.”

Democratic candidate Maggie Hassan, however, praised the veto, saying the bill “would have diverted millions of dollars in taxpayer money from our public schools to private schools, including religious schools.”

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Ted Siefer may be reached at tsiefer@unionleader.com.