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UPDATE: Supreme Court hears from both sides on education tax credits

New Hampshire Union Leader

April 16. 2014 9:54AM
Protesters gather Wednesday morning on the steps of the New Hampshire Supreme Court in anticipation of oral arguments on the constitutionality of a business tax credit that benefits students at religious schools. (PAT GROSSMITH/UNION LEADER)

CONCORD – The gallery at the New Hampshire Supreme Court was standing room only Wednesday morning as justices took up the issue of the constitutionality of a state law that allows business education tax credits to fund scholarships that benefit private and religious schools, as well as families that home-school their children.

The case involved an appeal by the state in a lawsuit filed by  Bill Duncan, founder of Advancing New Hampshire Public Education, in which a Strafford County Superior Court judge ruled it unconstitutional six months after it became law in January 2013.
Under the program, businesses receive tax credits of up to 85 percent on donations to a private organization that then awards the scholarships.

Attorney Alex J. Luchenitser, representing Americans United for Separation of Church and State (AUFSCS) in Washington, D.C., also a plaintiff in the case along with the New Hampshire and American Civil Liberties Unions, maintained the state law was enacted to circumvent the state constitution which prohibits tax money being sent to religious schools.

He said the business education tax credit is a complex government program outlined in a 12-page statute that calls for 70 percent of scholarship money to go to students leaving public schools to be home-schooled or to attend private or religious schools.

The plaintiffs contend that Article 83 of the state constitution specifically bars the state from giving tax money to religious schools when it says,   “no money raised by taxation shall ever be granted or applied for the use of the schools of institutions of any religious sect or denomination.”  

Luchenitser argued the business education tax credit was designed to circumvent the constitution and, he said, the state Supreme Court has repeatedly ruled the state cannot indirectly enact a law to do something it is prohibited from doing directly.
Assistant attorney general Richard W. Head contended the law is constitutional, even though an amicus brief was filed by Gov. Maggie Hassan who sided with the plaintiffs contending the tax credit is an education voucher program that will undermine funding of public education.   Democratic Gov. John Lynch vetoed the 2012 legislation when he was in office, but the Republican-controlled Legislature overrode it.

Regardless of Hassan’s position, the Attorney General’s Office is obligated to defend the statute before the high court.
Head contended the money cannot be considered public funds because the government never receives it.

The justices didn’t let any of the attorneys get too far in arguing their side of the case, interrupting them continuously with questions about the law.  The tax credit businesses received under the program was to offset taxes imposed on business profits and the business enterprise taxes.

Justice Carol Ann Conboy asked if it were true if there were no tax credit that the business would be obligated to pay the tax to the state.  “That’s true,” Head replied.

Head maintained the state was not making expenditures to religious schools because the business donates the money to a scholarship organization that decides who receives the funds.  “The last decision maker is the family,” he said.

Conboy, however, said the scholarship organization knows in advance where the family is going to spend the money.

Attorney Richad D. Komer, representing the Institute for Justice and other intervenors who favored the tax credit, contended  none of the plaintiffs had standing to bring the lawsuit in the first place.  The only person who could do that, he said, was the governor or individuals who could show personal harm.

“Who could show personal harm?” asked Justice James Bassett.  “I don’t know, frankly,” Komer replied.

Prior to the hearing, about two dozen people who favor the tax credit protested on the steps of the courthouse.  

Esther Fleurant of Concord, holding a sign that said “End Education Discrimination,” had four of her seven children with her. A native of Haiti, she said she is a member of the Word of Life Church and favors the law which would help cover some of the expenses in home-schooling her children. Two of her children are in public school and she home-schools four others, while the seventh child lives with his father.

The scholarships, she said, would give her the option of having her children attend a religious school or be home-schooled or a combination of both.

Jim Pinard, a lobbyist for Granite State Christian Schools Association, said many of the protesters were associated with the 25 schools in his organization.

The poor, he said, should have the same opportunity to send their children to private school that the wealthy do.  He said the wealthy will always be able to do that and pointed out that President Obama sends his daughters to private schools.  He said it was the height of hypocrisy.

Attorney Gilles R. Bissonnette of the NHCLU and co-counsel in the plaintiffs’ case, said the civil liberties group is not against families sending their children to private or religious schools or home-schooling them.

“We don’t think it’s right to spend public money to send children to private schools,” he explained.

Barbara Wilson, headmaster of Cornerstone Christian Academy in Ossipee, the only K-8 private school in the district, said in an email that the high court’s ruling will have wide-ranging consequences, especially for less-populated areas of the state where access to private and religious schools is limited.

She said the lower court ruling meant students in the Governor Wentworth Regional School District, which she described as one of the state’s poorest, were effectively barred from school choice advantages available to students attending New Hampshire schools in more affluent and populated areas.  The county is deprived of the same proven economic benefits of effective independent school education, she said.

Previous story follows:


CONCORD – The N.H. Supreme Court is hearing oral arguments Wednesday morning in the case of Bill Duncan v. State of New Hampshire, which seeks to end education voucher tax credits to fund scholarships to non-public schools.

Protesters gathered on the steps of the Supreme Court in anticipation of today's oral arguments.

Attorneys are arguing the constitutionality of the state's business tax credit that benefits students at religious schools.

Gov. Maggie Hassan, in an amicus brief, is siding with the plaintiffs, urging the high court to uphold a lower court ruling that it is unconstitutional to use education voucher tax credits to fund scholarships to religious, non-public schools. Hassan has said diverting limited education funds from public to religious schools makes it more difficult for the state to meet its obligation to provide an adequate public education to New Hampshire students.

Republican State Committee Chairman Jennifer Horn said the education tax credit program, passed by the Republican-led Legislature in 2012, helps poor students attend schools they otherwise could not afford.

The case stems from an appeal of Strafford County Superior Court Judge John M. Lewis' June 17, 2013, ruling that the education tax credit program is unconstitutional because it diverts tax payments to religious schools.

The program allows businesses to receive credits against their business taxes equal to 85 percent of amounts they donate to state-designated "scholarship organizations."

The organizations may then award scholarships of up to $2,500 to low-income, primary and secondary school students to attend either non-public schools, public schools outside their home district or to defray costs of home schooling.

Attorneys for the state of New Hampshire defended the program, claiming the money cannot be considered public funds because it never comes to the government.

But Hassan, in her brief, said state case law repeatedly treated tax credits as spending public tax dollars.

The case is being argued for the plaintiffs by Gilles R. Bissonnette for Duncan and the New Hampshire Civil Liberties Union and Alex J. Luchenitser of Americans United for Separation of Church and State. Assistant attorney general Richard W. Head is arguing the case for the state, along with Michael J. Tierney and Richard D. Komer.

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