Analysis: HB 20, statewide voucher bill, could cost state $50-100 million in new state spending in first year alone

Lawmakers are considering the country’s most expansive voucher program, House Bill 20, which would allow families to receive between $3,700 and $8,400 per student in taxpayer-funded “Education Freedom Accounts,” or vouchers. Those funds could then be used to pay for private school tuition, homeschooling expenses, computers, internet connectivity, transportation, and other education-related costs. 

An analysis by Reaching Higher NH has found that, if 50% of the 22,103 students who are currently enrolled in private school or are homeschooling, registered for a voucher under HB 20, it could cost the state $50.9 million in new state spending in the program’s first year alone. This does not include:

  • Any public school students who might leave their public schools to participate in the program;
  • The funding that the state already spends on public schools; or,
  • Any future funding that lawmakers may enact in the 2021 legislative session. 

If all of the 22,103 students who are currently enrolled in private school or home school opted for a voucher, the cost to the state would jump to $101.7 million in the program’s first year. There is no cap or limit on the number of vouchers available, or the cost to the state. 

Table 1: Year 1 Cost to State for Students Currently Enrolled in Either Private or Home School Programs 

Students who are enrolled in private schools and students who are homeschooled do not receive state funding, and are not included in the state’s education budget. Under current law, they “opt-out” of the public education system. However, if HB 20 passes, the state would be obligated to fund those students’ education through “Education Freedom Accounts,” or vouchers, through the state’s Education Trust Fund (ETF). 

Notably, the ETF has run a deficit for the past seven out of 10 years. 

Methodology

Program Eligibility

According to the eligibility criteria under HB 20 (dated January 13, 2021), nearly all resident children in New Hampshire would qualify for an “Education Savings Account,” or voucher, as long as they are not enrolled full-time in a public school. 

For this analysis, we model only those students who were enrolled in a private- or home-school program in the 2020-2021 school year. The model shows new state spending because those students are not currently counted in adequate education calculations, and would be in addition to current spending for New Hampshire public and charter schools. 

In the 2020-2021 school year, there were an estimated 22,103 eligible students. Of those students, 5,809 were home-educated as a part of their public school district according to the NH Department of Education. We do not include those students who were home-educated as part of the state or private schools. That same year, there were 16,294 students enrolled in a private (nonpublic) school according to the New Hampshire Department of Education. Notably, these numbers do not include students who may reside in New Hampshire but attend out-of-state private schools, as those students would also be eligible for a voucher under HB 20. 

Adoption Rate

The adoption rate models the range of takeup rates, between 10% and 100% of participation in the voucher program. While it is unlikely that any non-mandated program would have 100% participation, especially in the first year, a 50% participation rate is feasible given the breadth of allowable uses of the program. 

Other studies of voucher programs have estimated a roughly 2% participation rate, pointing to Arizona specifically. However, that program is designed for a limited cohort of students, and most of the eligibility requirements require students to be enrolled in their public schools for at least 100 days. Unlike HB 20, the Arizona program does not currently include students who were home-schooled or attended private schools at the beginning of their program. 

Amount of Voucher

Finally, we assumed the amount of the voucher at $4,603, which is the “average” amount of per-pupil aid in the 2021-2022 school year ($737,350,886 in Total Cost of an Adequate Education, divided by 160,191 in 2020 Estimated ADM). This was the figure used in the Legislative Budget Assistant’s Fiscal Impact Note of HB 20, as well. It does not include the average per-pupil spending at public charter schools. 

All students would qualify for base adequacy aid ($3,787 in the 2021-2022 school year), and may qualify for additional differentiated aid. Students also receive differentiated aid for those categories in which they qualify: Free and Reduced Lunch ($1,893), Special Education ($2,037), English Language Learner ($740), and Third Grade Reading ($740). 

The actual amount of the voucher may differ depending on whether the student qualifies for differentiated aid. 

The estimated amount of the voucher does not include any additional funding streams that may result from the 2021 legislative session.

Participation in the program

There are no additional requirements for families to participate: There are currently no limitations on the types of education service providers, nor are there any requirements on the part of families, providers, or participating schools.

There are few limitations to the types of programs, services, and materials that are eligible for use. There are no reporting requirements, other than the initial acknowledgement and agreement, meaning that in practice, families would likely not have to change their education arrangements.

There are very few barriers to participation, and it would be reasonable to expect a high participation rate among current private- and home-educated students. 

Questions about this analysis can be directed to Christina Pretorius, Policy Director, at christina@reachinghighernh.org.

Learn more about HB 20, the statewide voucher bill:

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