Reaching Higher NH Analysis on SB 193 finds Disproportionate Impact on Cities and Property-Poor Districts

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Reaching Higher NH held a public information session this morning to present their analysis of SB 193, a bill that would create a statewide voucher program through education freedom savings accounts. The bill passed the Senate in the spring of 2017 and the House will vote on an amended version in January 2018. The bill is highly consequential. Over 60 people were in attendance, including several NH State Representatives, public school administrators, special education professionals, parents and community members.
There are several aspects of the amendment, including eligibility criteria and stabilization grants, that would have substantial implications, financial, academic, and otherwise.

Reaching Higher NH used publicly available data to project the impacts on districts and the state. Key findings included:

  • 70% of the students who would be eligible for the voucher come from the comparatively property-poor communities that would be most impacted by any loss in state funding.
  • The stabilization grants intended to protect these districts from catastrophic funding losses would cost the state at least $31 million in new spending over the next 5 years.
  • In the first year, districts are set to lose around $5.8 million in state aid – a projection that factors in the bill’s stabilization grants. Manchester, for example, will lose about $430,000 in state aid if just 1% of eligible students select a voucher. For Nashua, that would be a $407,000 loss.
  • Students with disabilities waive their rights under federal and state disability laws, including the right to an IEP, the right to services, and the right to a free and appropriate education in the least restrictive environment.

Background

SB 193 allows eligible families to receive 95% of the state funding (about $3,600 per student plus differentiated aid) in the form of an education freedom savings account, or voucher. The funds can be used for private and religious school tuition, homeschooling costs, tutoring, and other education-related expenses. The original bill passed the Senate in the Spring of 2017, and the House Education Committee studied the bill over the summer, eventually voting ought-to-pass on an amended version in November.

Eligibility Requirements

The original bill allowed any New Hampshire student between the ages of 5 and 20 to apply for a voucher. The House amended the bill to include eligibility requirements: students must either come from households earning less than 300% of the Federal Poverty Line ($73,800 for a family of four), have an Individualized Education Plan (IEP), attend a poor-performing school, or have an application for a tax credit scholarship that has gone unfunded.

Reaching Higher NH’s analysis found that the largest pool of eligible students will likely be those from households who earn less than 300% of the Federal Poverty Line. This means that about 70% of eligible students will come from communities that are extremely vulnerable to fluctuations in state aid and enrollment. These communities depend on dollars raised through local taxes and state funding due to lower-than-average equalized valuation per pupil (lower-than-average property valuations, meaning a lower ability to raise property tax funds). For example, a reduction in state aid in Franklin has a more discernible impact on their local budget than a reduction in state aid in Rye.

Stabilization Grants

The House Education Committee determined that the program would cost districts millions in state funding, which would ultimately raise local taxes. To help minimize the impact to local school budgets, the Committee included “stabilization grants” to ease the burden. If a district loses more than 1/4 of 1% of their prior year appropriations from students leaving the district, the state will provide a grant to the district to make up the remaining loss.

Reaching Higher NH’s analysis found that if 3% of eligible students select a voucher, the state will need to raise and appropriate about $31 million in additional funding over the next five years to pay for the grants. Note that the allocation of the funds is not in the bill–the state legislature would have to appropriate the money during budget time. For the purposes of this analysis, Reaching Higher restricted eligibility to students who receive free or reduced price lunch (FRL), a federal program available to students from households who earn less than 185% of the federal poverty level, as there is publicly-available data at the school district level for these populations. As a result, however, the $31 million should be considered a conservative, minimum estimate of impact.

Special Education

The bill states that when a family accepts an education freedom savings account, they waive their rights under most federal and state disability laws, including the Individuals with Disabilities Education Act (IDEA). State and federal laws require that schools provide students with disabilities the services and supports they need to receive a free, appropriate public education in the least restrictive environment at no cost to the family. This could mean anything from the support of a paraprofessional in the classroom, to hearing assisted devices. Families are guaranteed certain rights, including the right to be present in an IEP meeting or the right for their child to be evaluated by a certified professional.

When a child accepts an education freedom savings account under the bill, these protections are waived. Students receive a service plan that outlines supports the local public school will make available to the student. Services are not required to be individually tailored to the student, and families are not guaranteed input regarding the services and supports provided. When the funding for the service plan runs out, the school is not obligated to continue to provide support, even if the school year is still in session.

Academic Accountability

SB 193 contains accountability requirements that appear to be in contradiction with each other. The bill seems to compel any student who selects a voucher to take the annual statewide assessment (as defined in RSA 193-C:6). However, the bill also contains language indicating that the accountability requirements for vouchers students could be satisfied with an annual portfolio review and one other measurement tool agreed upon by the parents, the Commissioner of Education, resident superintendent, or private school principal. This issue complicates efforts to assess related potential academic impacts.

Where students selecting a voucher are required to take the annual statewide assessment, shareholders are able to evaluate and compare academic results to ensure students are realizing their learning goals. This is not the case when such a statewide assessment is not used.

Public Oversight

Reaching Higher estimates that if if 3% of eligible students select a voucher, scholarship organizations will receive over $375,000 in state money every year (scholarship organizations keep 5% of the per pupil adequacy amount associated with each voucher student). The amended bill calls for an eight-member oversight commission, which includes the administrator of the selected scholarship organization. This may impact the overall rigor and nature of the oversight commission.

Finally, the bill does not prohibit scholarship organization staff members from having financial interests in education providers, including private schools, tutoring programs, or online programs, for which the education savings account would be used.

Watch the full presentation here:

Methodology & Additional Resources