Senate version of voucher bill significantly increases financial impact on local taxpayers

The financial implications of the Senate version are significantly different from what had been discussed with the House bill, which was killed last week.

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Late last Thursday in the State Legislature, after the House killed SB 193, the statewide voucher bill by sending it to interim study, the Senate revived the voucher bill by attaching it as an amendment to an unrelated bill, HB 1636 (legislation that dealt with teacher preparation programs, charter school facilities, and death benefits for school employees killed in the line of duty). The new bill, HB 1636, will most likely be up for a vote by the House on Thursday May 10.

The version of SB 193 revived by the Senate differs dramatically from the version that had been killed by the House.

The House version had been amended multiple times by both Education and Finance committees. The bill would have allowed parents to receive up to 95% of the per-student state funding plus differentiated aid in a savings account to use for education-related expenses, like private and religious school tuition and homeschooling expenses. The House version also added eligibility requirements, caps on the number of students who can participate, some accountability requirements, and grants to school districts to partially offset the loss in state aid from students taking vouchers.

The Senate version up for consideration on May 10 has no caps on the number of eligible students who can take the voucher, provides no grants to school districts, and has much more limited accountability requirements. As a result, the financial implications of the Senate version are significantly different from what had been discussed with the House bill.

Here is an outline that compares the projected financial impacts of the Senate version (attached to HB 1636), to the House version (which was killed twice by the House last week).

Senate Version of Bill, as Passed Last Thursday

Under the Senate version, eligibility for vouchers jumps from ~38,000 students to ~172,000 students. The Senate version would provide vouchers for:

  1. All students between the ages of 5 and 20 currently in public school;
  2. Students currently in private school kindergarten; and,
  3. Students in home schooling.

This is marks a notable expansion of eligibility – this would be the most broadscale voucher program in America if it passes. As a result, the potential fiscal implications are significant.

If 3% of eligible students who are currently in public school, which is a figure initially cited by the bill’s supporters, take a voucher:

  • Local school districts stand to lose over $21 million in state funding in year 1;
  • Local school districts stand to lose over and over $265 million in state funding over 13 years.

If 50% of eligible students currently in private school take a voucher (which is possible and likely, as they do not have to do anything differently other than register for the savings account):

  • The state will need to appropriate over $1.4 million in new spending in year 1 alone; and
  • The state will need to appropriate over $239 million in new spending over 13 years.

(Note: the fiscal impact grows over time because students currently in private school are initially eligible only when they enter kindergarten, but then they will continue to receive vouchers as they progress through grades 1-12; so while in year 1 perhaps only ~690 students in private school kindergarten will select a voucher, by year 13 there could be 8,500 students in private school grades K-12 who receive a voucher.)

Preliminary cost analysis of SB 193, as attached to HB 1636.

If 50% of eligible students currently in home school take a voucher (which is possible and likely, as they do not have to do anything differently other than register for the savings account):

  • The state will need to appropriate ~$7.5 million in new spending in year 1 alone; and
  • The state will need to appropriate over $92 million in new spending over 13 years.

See the full analysis here.

House Version of Bill, As Killed in the House Twice Last Week

Under the version of SB 193 that the House killed on Thursday (sent to interim study), eligibility for vouchers was restricted to:

  1. Students currently in New Hampshire public school grades 2-11 who are between the ages of 6 and 20 and whose family income is at or below ~185% of the federal poverty level; AND
  2. Students who are attending a school that for 2 consecutive years failed state accountability standards.

Had this version of SB 193 passed, it would have extended eligibility for vouchers to roughly 38,000 students in year 1. The non-partisan Legislative Budget Assistant estimated that this version of the bill would have resulted in:

  • Local school districts losing ~$2.2 million in state funding in year 1; and
  • Local school districts losing ~$99 million in state funding over 11 years.

(Note: this version of SB 193 gave districts a one-time adjustment grant of $1,500 for each student who signed up for a voucher.)

The potential fiscal impacts of SB 193 are significantly different under the version of the bill passed by the Senate late Thursday night.

Next Steps

The House will vote on HB 1636, with the amendments, at their session on Thursday, May 10. They can vote to:

  1. Concur with all of the Senate changes and send it to the Governor for signature
  2. Non-concur with the Senate changes, which would kill the bill
  3. Send it to a Committee of Conference, which is composed of three Senators and four Representatives (chosen by Leadership), to find a compromise. In order to pass, the vote needs to be unanimous. However, Leadership can replace members if they are “unwilling or unable to support” the committee’s recommendation. Committee reports, which include the revised bill, must be signed by May 17, and the House and Senate will vote on the committee report by May 24. If both chambers pass the committee report, it goes to the Governor’s desk for signature.

Further Research

Reaching Higher NH has a series of policy briefs, analyses, and coverage on SB 193. Check out our resources: