Looming questions about voucher bill and its effects on students and districts at House Finance hearing

On January 16, the House Finance Committee held a public hearing on SB 193, the bill that would create a statewide voucher program. After hours of public input, a subcommittee will meet on January 23 to do a more in-depth financial analysis of the bill.

Parents, advocates, school board members, school administrators, and legislators came out in overwhelming opposition to the bill, which they said would take money away from districts already operating on extremely tight budgets. Supporters of the bill, including sponsor Senator John Reagan, State Board of Education Chairman and interim president of the free-market think tank center Josiah Bartlett Center Drew Cline, several parents, and national nonprofit Ed Choice expressed support for the bill, saying it provides families with more choices for their children’s education.

Eligible students

According to Representative Glenn Cordelli (Tuftonboro), a strong advocate for the vouchers proposed by SB 193, about half of New Hampshire’s students (approximately 84,500) would be eligible for the program. As amended, children would have to be current public school students or entering Kindergarten or first grade, and meet one or more of the following requirements:

  • Family income of less than 300% of the federal poverty level (about $73,000 for a family of 4);
  • Attend a school that has demonstrated that it does not provide an adequate education for 2 consecutive years;
  • Have an Individualized Education Plan (IEP) or a 504 plan;
  • Have an unfunded application for the Education Tax Credit scholarship program or be have applied and not been admitted to a New Hampshire charter school.

But one of the key questions remains: how many students would take up a voucher?

Representative Cordelli suggested that figure could be anywhere from 1% to 3%. Voucher programs in Arizona, Tennessee, and Florida had similar participation rates, he cited. According to Reaching Higher NH’s analysis, a ~1% participation rate could mean a loss of about $430,000 in state aid in Manchester the first year (after stabilization grants), In Nashua, the loss would be an estimated $407,000.

Impact to New Hampshire’s largest city

Manchester Mayor Joyce Craig told the House Finance Committee that SB 193, if passed, would hurt the city’s schools and innovative programs. Programs like the ones that brought one of the city’s elementary schools, Parker Varney, from one of the lowest performing schools to a model of student achievement and parental engagement.

“At a time when we are trying to bring new ideas and innovation to Manchester to prepare our students for the future and to attract new students, this bill will negatively impact our progress,” Craig said.

Manchester school board member Arthur Beaudry, summarizing a letter opposing SB 193 sent to the Finance Committee by Manchester Superintendent Bolgen Vargas, noted that the state is already reducing support for public education by phasing out the stabilization grant from adequacy.

“The elimination of the stabilization grant from the adequacy formula is also shifting costs onto the taxpayers. Over the 25-year phase out the cost to the Manchester taxpayers will be $12.5 million.”

Beaudry, a member of his school board’s finance committee, also underscored the difficult financial situation in which New Hampshire school districts find themselves.

“If the books were to be closed in Manchester today, we have a little over $400 remaining in our total $167 million budget…so when they say $430,000 doesn’t mean much, it means a lot to the city of Manchester.”

Impacts on special education

A major concern of teachers, school board members, and parents was the effect on special education. Lisa Beaudoin from ABLE NH, an advocacy group for individuals with disabilities and their families, feared downshifting costs or cut services for students under the bill:

“As districts lose state aid due to scholarship students, they may look to reduce special education spending at the local level, translating into inferior services being offered for families or they may raise local property taxes. [During annual deliberative sessions] it is both sad and cruel how students with and without disabilities are pitted against one another due to state and federal downshifting of special education costs to towns. SB 193 exacerbates this financial challenge that families and towns are facing. Taxpayers across our state are in fights with one another over special ed funds because of inadequate state and federal funding.”

Concerns with stabilization grant funding

The bill includes stabilization grant funding for districts who lose more than one-quarter of one percent in state funding, but does not specify where the funding for the grants would come from.

Mascenic School Board member Tom Falter questioned whether the legislature would fund the grants. “Unfortunately for us, SB 193 as written does not compel the state to reimburse us for this money. [The bill] does not include a fiscal impact statement. These two facts leave me skeptical that the state would follow through with reimbursing districts with stabilization grants,” he said.

“I remind the committee that the state has made substantial cuts by removing building aid, by walking away from contributions to New Hampshire retirement system, by shortchanging local school districts on catastrophic aid. While the state may have saved money by defunding or underfunding these programs, local taxpayers are paying higher taxes,” Falter continued.

Supporters of the bill told the committee that districts would still be able to keep more than 99% of their budgets, since the grants would reimburse for costs over 0.25% of their annual budgets. But Grantham resident and school board member Brittany Pye said that even 0.25% of her town’s annual budget is substantial.

“What would ¼ of 1% look like for our district? That’s about $22,000. [That] can fund the trash removal and bus fuel for our entire school for an entire year. It could fund the workbooks, the replacement furniture, and the periodicals for our entire school for an entire year. Somewhere between $10,000 and $20,000 can fund audiology and vision screening for our entire school for an entire year.”

“Between 10 and 20k has a really significant impact on district with a school of our size. These are things that would make a really meaningful difference in the lives of our students on a day-to-day basis. When we talk about ¼ of 1%, I don’t think it really gives an accurate picture of what that really looks like for a district,” Pye said.

Some feared that other services would be cut.

“As members of the fiscal committee, you know you will be forced to either take funding away from somewhere else–fighting the opiate epidemic? [Preventing] domestic violence? Transportation? Where? Where will that come from? Or, you’ll have to raise taxes, or we’ll just downshift the costs to towns like mine,” said Beaudoin.

Competition in education

“My philosophy about choice in education is that if we don’t have competition, how will we ever know how smart our children are? And how will we ever determine how much it should really cost?,” said Senator John Reagan (R-Deerfield), the bill’s sponsor.

The Senate passed the original version of the bill 14-9 in the spring, which did not include eligibility requirements, stabilization grants, or other accountability measures. Since they already approved a version of the bill, the chamber won’t likely have another vote–instead, if the bill passes House Finance and another full vote by the House, it is expected that the Senate will likely approve the bill through a committee of conference.

Next steps

The House Finance Committee will meet on Tuesday, January 23 for a Division II Work Session where they will work out the fiscal details of the bill. Legislative budget assistants will provide a 13-year model of the program costs. Projections of school district budgets that far into the future are difficult and likely unreliable, meaning that the estimated stabilization grants, if included, will likely include a myriad of assumptions.

SB 193 is due out of committee by March 15, but the House could vote on it sooner if the Finance Committee works through it quickly.

Watch Reaching Higher NH’s recording of the hearing:

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