Proposed voucher bill could cost districts millions in state funding

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On November 8, the House Education Committee will vote on SB 193, a bill to establish an education freedom savings account program (hereafter, we use the shorthand “voucher” to describe the program).

In order to inform the public discussion on the legislation, Reaching Higher conducted an analysis of the bill’s potential financial impact on school districts. The analysis looks at districts’ student populations and average teacher salaries and projects losses in revenue based upon a range of adoption rates (percentage of students who select a voucher).

Click on the image below to view the full analysis:

Background

SB 193 is a bill to create a universal voucher program which enables the transfer of public funds from public schools to private schools or services related to homeschooling. Under the bill, parents who sign contracts with a scholarship organization receive access to 95% of the state education aid associated with their student(s) (funds that would normally go to the students’ public schools). Parents can use these funds to pay for educational services including private school tuition or homeschooling. The remaining 5% of the state education aid goes directly to the scholarship organization to supports its operations.

The bill was retained by the House Education Committee in April of this year after concerns were raised by a number of groups and individuals, including the New Hampshire Attorney General’s office. The concerns included the constitutionality of sending public tax dollars to religious schools, the transfer of local property tax dollars outside of the district to private schools, the legality of creating options which are available only to parents who can afford to pay some tuition on their own, potential discriminatory consequences towards students with learning disabilities, and the lack of any caps to prevent volatile swings in student enrollment in public schools.

A subcommittee worked on the bill over the summer and fall. It added some additional provisions regarding accountability (e.g., requiring private schools to administer an annual assessment). In terms of overall impact, however, the bill is largely the same as it was earlier in the year, including allowing public dollars to go to religious schools.

How We Conducted Our Analysis

In the latest version of the bill (as of October 24, 2017), the eligibility criteria for the program includes a provision which would allow any student who is a New Hampshire resident and who has attended a New Hampshire public school for at least a year (or who will enter kindergarten or first grade) to select a voucher based upon a parent or guardian determining that the student’s assigned school is not in his or her best interest. This provision means the program would function as a universal voucher program without any restrictions on the number of students from a given district who can select a voucher in any given year.

We looked at a select group of school districts from across the state and modeled how much state aid the districts would lose if between 1% and 5% of the districts’ students selected a voucher. We used the state base adequacy aid for FY 2018 as the per pupil amount districts would lose when a student opts for a voucher (this is a conservative figure as districts would also lose differentiated aid, such as state aid provided for students who are eligible for free or reduced-price lunch). We then equated this projected loss in revenue to the number of teacher positions the districts would need to eliminate (or pay for using local funds) based upon the districts’ average teacher salaries.

If you’d like more information, please contact Dan Vallone at dan@reachinghighernh.org or 603-715-9696.