The House Finance Committee voted to recommend further study on SB 193, the statewide voucher bill, in an executive session on April 25, with members citing the cost downshifting as the major reason for their vote.
The committee reports in the House Calendar are more robust than usual, signaling how controversial the bill has become.
The majority report, which recommended interim study and would ultimately kill the bill, highlighted seven reasons for taking the Finance Committee’s recommendation. Those include concerns over special education services, oversight, and downshifting of costs.
The minority report outlined the program, and argued that the choice provided by the vouchers would force public schools to improve.
Representative Robert Theberge, a Republican member of the Finance Committee from Berlin, authored the majority report recommending interim study (breaks added for clarity):
This bill presents unusually complex challenges, including constitutional, historical, educational, organizational, public, private and financial issues… Even after the House adopted the Education Committee report, the leaders of the Education Committee were troubled by issues unsettled in that version of the bill and spoke openly that the version of SB 193 that came to Finance needed extensive revision. The Finance Committee held 13 work sessions, including several hearings. Five successive amendments were considered by Division II of the Finance Committee. The final amendment failed in Division II, with 3 in favor and 5 opposed on an OTPA motion. It was written by four leaders of the House Education Committee and sponsored by them and the chair and vice chair of Division II of the Finance Committee. The majority believes that the amendment needs further work.
First, it does not adequately deal with the needs of special education students: the committee discovered that only public schools are bound to deliver a free, appropriate public education (FAPE) and that almost no non-public school is equipped with appropriately trained staff and/or willing to invest its resources in meeting complicated special needs.
Second, two-thirds of the 140 non-public schools approved by the Department of Education are approved for attendance (that is, they meet zoning requirements and fire and safety rules only) and not for their academic programs (with the consequence that state adequacy funds would be used to support students in schools whose academic programs do not meet any private or public academic oversight requirements).
Third, oversight over parent-directed education, familiarly known as home schooling, is minimal.
Fourth, the amendment provides a scholarship for each eligible student equal to the base cost of an adequate education (about $3,600) plus differentiated aid ($1,800) if the child is entitled to such aid. The latter is somewhat confusing. There is no requirement nor expectation that the services covered by differentiated aid will be delivered outside of the public schools.
Fifth, to compensate a school district for the loss of adequacy funds when a pupil participates in the education savings account program, the state will continue to provide adequacy aid for the first year plus a $1,500 per child stipend for the second year to help meet the school’s fixed costs. However, those fixed costs are far higher than these amounts and last far longer than two years, imposing a significant financial burden that increases over time. Ultimately, this burden will be borne by local property taxpayers.
Sixth, this program will be managed by a private, non-governmental entity that will receive up to 5% of the total funds transferred from school districts. Procedures used by such entities in other states have been demonstrated to be vulnerable to misuse and maladministration, and the amendment does not provide sufficient protections against such abuses in New Hampshire.
Seventh, the amendment would downshift over $99 million to local school districts during the program’s 11 year-ramp up period, most likely resulting in an increase in local property taxes. It is estimated that about 500 children will participate in the program’s first year, increasing to about 2,000 per year in the ninth year and beyond. While the average downshift is about $9 million per year, it begins at about $2 million per year for the first year, reaches $10 million in the sixth year and nearly $12 million in the tenth year and beyond.
It is clear to the majority of the Finance Committee that much more work needs to be done to ensure that unintended consequences are addressed and the educational needs of New Hampshire’s children are met.
Representative Karen Umberger, a Republican member of the House Finance Committee, wrote the minority opinion that recommended passing the bill:
As amended, this bill has been a cooperative effort between the Education Committee and Finance Committee. The policy was developed by the Education Committee and the financial aspects were developed by the Finance Committee.
The purpose of the Education Savings Account program is to provide approved educational options that best serve students currently attending public schools. In order to be eligible for an Education Savings Account a student must be at least 6 years old and not more than twenty, attend public/charter school for one year preceding participation and receive an ESA in the prior year. In the initial year, the income level of the families cannot exceed 185% of the poverty level. The child can remain in the program as long as the income level does not exceed 300%. Additionally if a public school is not providing an adequate education for 2 consecutive years as determined by the Department of Education, students can participate.
The options for students include both public and non-public schools approved by NH for school attendance which administers standardize achievement tests with the results submitted to DOE and the scholarship organization. There is also an option for parent-directed education.
The scholarship organization will be chosen by competitive bidding process. They will be responsible for developing and maintaining agreement forms, accepting and reviewing applications, reviewing all receipts and fees and providing an annual report to the oversight committee established in the bill. The parents must submit the invoices to the scholarship organization for payment. The scholarship organization shall conduct yearly audits approved by DOE. The parent receives the account and is responsible for enrollment of their child in a public or non-public school or in parent-directed program.
Specific items that the funds can be spent on are identified. The resident district is not responsible for any special education costs. A student may be eligible for a service plan in accordance with the IDEA program.
The bill establishes caps on the number of students who can receive an ESA. The minimum number of students for any school is three, with 5% at schools of 100 students or fewer, 4% at schools between 101 and 300 students and 3% at schools with 301 or more students. The parents will receive $5,806 which includes the base adequacy grant plus differentiated aid for free and reduced lunch. If a child is receiving special education or is an English language learner this differentiated aid will also be included in the amount the parents account will receive. Based on these caps the maximum number of ESA’s that are available is 527 per year.
The first year a student leaves a public school there is no reduction in state dollars going to a school district. This is a result of adequate education grants and differentiated aid being funded a year in arrears. The second year a child is out of the public school the school district will receive $1500 per student who has received an ESA.
This bill has had two years of study and the current bill as amended provides oversight, accountability and has a maximum cost to the state of 6.97 million over an 11 year period and a maximum of 99.43 million to local school districts over an 11 year period. These costs are cumulative, with the maximum in one year of $11.97 million statewide, and apply only if all students eligible enroll. The costs start year 1 at $2.19 million for all school districts in the state.
Improvements in the public schools will result in a reduced number of families who choose ESA’s for their children. We have to ask ourselves should parents have another option for their children to succeed.
During the committee meeting, House Finance Chairman Neal Kurk (R-Weare) said that he couldn’t support a bill that diverts nearly $100 million from local school districts:
“This bill downshifts $99 million to local property tax payers in ways that they will not be able to avoid by reducing expenses. I was not elected to downshift money on my constituents,” Kurk said before the vote.
If the House agrees with the recommendation to send the bill to interim study at their vote on Wednesday or Thursday, the bill will die and will have to be reintroduced in 2019.
Read more about the bill, Reaching Higher NH’s analyses on its impact on our students, families, and schools, and the major changes it has gone through since it was first introduced last year:
