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Education business tax credit program upheld

State House Bureau

August 28. 2014 10:37PM

CONCORD — Supporters of tuition tax credit scholarships called a state Supreme Court decision Thursday a victory for religious freedom and school choice, but those who sued the state over the new program say the decision will have a chilling effect on government accountability.

The Supreme Court ruling invalidated the law on which the suit was based, saying until the plaintiffs could show they suffered harm, they had no legal right to challenge the statute. That reinforced a 2010 court ruling that the legislature responded to in 2012 by passing House Bill 1510, which restored legal standing to taxpayers. The prime sponsor of HB1510, former Rep. Seth Cohn, R-Canterbury, said the decision shows how out of touch the Supreme Court is.

“We said you’re going the wrong way, and they come back (Thursday) and basically say ‘Don’t tell us what to do,’” he said.

Cohn said the worst aspect of the decision is it did not address the underlying issues of tax credits and religious school scholarships.

Instead, he said, the court avoided the whole topic by throwing the case out.

Under the program, businesses may donate to nonprofit organizations that offer scholarships of up to $2,500 per student.

Students in home schools can receive up to a $750 scholarship.

The business receives an 85 percent business tax credit.

School districts that lose students due to the scholarships forfeit $4,100 per student in state education aid.

The top court sent the case back to Strafford County Superior Court.

Gov. Maggie Hassan urged lawmakers to repeal the tax credit program — and like other opponents — was disappointed the Supreme Court did not rule on the merits of the law.

“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. “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.”

Hassan’s office said she is still reviewing the legal standing aspect of the ruling.

After the education business tax credit program passed in 2012, then-Gov. John Lynch vetoed it, but was overridden by the Republican-controlled Legislature with a 3-1 majority.

Former House Majority Leader D.J. Bettencourt said he is thrilled the Supreme Court decision keeps the New Hampshire 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.”

Government accountability

The lead plaintiff, 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.”

However, one of the organizations that brought the suit, the New Hampshire Civil Liberties Union, warned the decision may have more far-reaching effects.

“Today’s decision will have a significant impact on government accountability,” said Gilles Bissonnette, staff attorney for the NH Civil Liberties Union. “In striking down New Hampshire’s taxpayer-standing statute, the New Hampshire Supreme Court has made it far more difficult for the people of this state to constrain the actions of New Hampshire government bodies when those actions violate sacred constitutional rights.”

Rep. William O’Brien, R-Mont Vernon, was the House Speaker when the bill passed.

He said the court decision opens educational opportunities to students that are now only available to the children of governors and well-heeled political and union bosses.

“The Supreme Court today rejected the trial court’s decision that in effect would have told the NH Legislature to be hostile and not neutral toward religions,” O”Brien said. “Our state constitution does not lay the foundation for such a radical and harmful government.”

Reaction to the decision was split down party lines, with Democrats lamenting the ruling and Republicans — including gubernatorial candidates Walt Havenstein and Andrew Hemingway — lauding it.

Scholarship money

Since it began last year, the program has not raised much money for scholarships. In its first year, about $250,000 was raised through the credits.

For the 2014 fiscal year, businesses applied for $58,580 in tax credits for scholarships totaling $49,725.

The program allows up to $5.1 million in business tax credits for 2014.

“We at (Network for Educational Opportunities) are thrilled by the decision of the Supreme Court,” said Kate Baker, executive director of NEO. “We are eager to get to work awarding scholarships to low-income families without having to discriminate based on what sort of private school the parents want their children to attend,” she said.

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