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Kathy Sullivan: It's not too late to support public schools

April 02. 2018 7:04PM

ARE NEW HAMPSHIRE voters aware of just how much tax revenue the New Hampshire Legislature wishes to divert from the general fund and public-school districts to benefit private schools?

Do voters know the Legislature gives business tax credits to corporations that support private and religious schools, but not for donations to public schools?

Companies are entitled to an 85 percent state business tax credit if they donate to a scholarship organization that in turn issues scholarships to children attending non-public schools. For example, if a company has a $10,000 business profits tax liability, it can reduce that tax obligation to $1,500 by donating $10,000 to a private school scholarship fund.

This legislative policy encourages donations to a preferred class of non-profits. If the business prefers donating $10,000 to a public school for technology for low-income students, or to pick up the cost of specialized tutoring, it receives no tax credit. A donation to a Girls and Boys Club for after-school programs for low income children receives no tax credit.

Some businesses can profit on the private school scholarship donation, since they can also take a charitable deduction on their federal taxes. The total credit and deduction can exceed the $10,000 donation.

The Republican-controlled Legislature has made a policy decision to reward charitable donations to religious and private schools with tax credits, but not donations to public schools or other non-profit organizations serving children.

According to reports filed with the New Hampshire Department of Revenue Administration by these scholarship organizations, donations totaled $854,326 in 2017. That is a lot of charitable giving steered by the state to private and religious schools.

Most of the money in this program went to religious schools. One scholarship organization reported 75 scholarships; all went to religious schools. Another reported 257 scholarships. Well over half were for religious schools. Prep schools with large endowments, such as Cardigan Mountain School, which has a $29 million endowment, and Kimball Union Academy, which has a $30 million endowment, also received benefits from donations funneled through the tax credit program.

Why is the Legislature diverting New Hampshire tax dollars to prep schools that need the money a lot less than say, Beech Street School in Manchester?

Now the Legislature wants to expand the tax credit program to the Interest and Dividends Tax. Not many Granite Staters have stock portfolios subject to that tax. In 2015, only about 3.3 percent paid an I&D tax. The credit is meant to steer giving by some of the wealthiest individuals in New Hampshire to private, not public, schools.

There are no property tax credits for working people without big portfolios who care enough to donate to a reading program. Companies and the wealthy can get tax credits, but not if they donate to public schools.

These tax credits will divert millions of dollars away from the state’s general fund. The Legislature also is considering a bill, SB 193, which establishes a taxpayer-funded scholarship program. It will take millions of the state’s dedicated education funds and give it to private schools. The reason scholarship programs are used is that the state constitution does not allow tax dollars to fund religious schools. The Republican majority could propose repealing that provision, but it would require voters to pass it. That they do not, suggests Republicans question whether voters would agree with the use of public tax dollars by religious, prep and other private schools.

If you think that it is wrong for the Legislature to give tax credits only for promoting private, not public, schools, or to shift public money to private schools, you can find out how your representatives voted by looking up SB 193 and HB 1686 on the website. In Manchester, all the city’s Republican legislators (Reps. Freeman, Gagne, Victoria Sullivan, Souza, McLean, and Proulx) voted to send public education funds to private schools. They also all supported the tax credit program, except for Kathy Souza, who was excused from voting on HB 1686, but voted yes on SB 193. One Democrat, Jesse Martineau, voted for both bills, and two others, Jean Jeudy and Barbara Shaw, voted for SB 193.

SB 193 will be coming back to the House for another vote, so you have time to call your legislators and ask them to vote no.

Manchester’s Kathy Sullivan is the former chairman of the New Hampshire Democratic Party.

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