On Thursday, New Hampshire lawmakers will decide on whether to expand the state’s school voucher program, which would give parents taxpayer dollars to pay for private and religious school tuition and homeschooling. The cost of the program is about $25 million this year, but with the expansion, could double it to more than $53 million per year.
The vote comes at the same time as key developments:
- State revenues in May were bleak, with business taxes about one-third below the budgeted amounts and lower than last year;
- A religious school in New Hampshire, which received thousands of dollars in voucher funding from the state, was revealed to be run by an anti-semitic “hate group” by the Southern Poverty Law Center;
- The Legislative Oversight Committee couldn’t get answers to critical questions from the administrator, the Children’s Scholarship Fund, about how voucher money is spent, how vendors are approved, and how the program operates;
- Lawmakers killed key funding initiatives for public schools earlier this session, which would have restored about $75 million in school funding for high-need schools next year, citing a lack of state revenue; and,
- The state is underfunding public schools by over a half a billion dollars per year every year, according to recent court rulings.
Lawmakers are set to vote on House Bill (HB) 1665, which would increase the income eligibility threshold by 20%, allowing a family of four with incomes of up to $132,600, significantly more that the State’s median household income, to receive thousands of dollars annually to pay for private and religious school tuition and homeschooling.
Both the House and Senate will hold an up-or-down vote on the bill on Thursday. No lawmakers are allowed to make changes or propose amendments to the bill. If approved by both chambers, it will go to Governor Chris Sununu’s desk for signature and would take effect in the next school year.
School vouchers have wreaked havoc on state budgets across the country: In Indiana, an eligibility increase to 400% of the threshold for eligibility for the Free and Reduced Price Lunch program led to a surge in enrollment and now costs Indiana taxpayers nearly a half a billion dollars annually; in Arizona, school vouchers account for nearly half of their state budget deficit of $429 million next year.
State revenues bleak
According to budget experts, state revenues are looking gloomy due to lower-than-budgeted business taxes and falling real estate, liquor, and tobacco taxes. Business taxes were about one-third lower than budgeted amounts and $53 million below what was collected this time last year, according to InDepthNH. In total, business taxes are about $18 million below the revenue plan for the year.
“The May revenue report shows business taxes about one-third below the 2024 fiscal year revenue plan with the business enterprise tax in negative numbers for the month. Budget writers penciled in $43.2 million as the estimate for May returns, but the actual number was $28.6 million,” wrote Garry Rayno for InDepthNH.
Offsetting the low business taxes were the interest and dividends tax, which is set to end next year, and interest on the state’s cash reserves, which experts warn is not a stable source of revenue. While the May revenues were on target for the month, they didn’t produce the surplus that budget writers have been accustomed to for the past few years.
“Budget writers in developing the current biennium’s budget, estimated state revenues would be about $10 million less in the 2025 fiscal year… Given the drop off from fiscal 2023 to 2024 of $117 million to date, the $10 million estimate may be a best case scenario,” wrote Rayno.
State revenues are an important piece of the discussion about school vouchers since supporters often cite the state surplus as a way to support the program, but recent revenue estimates and historical data suggest that the multi-million dollar surpluses in the education trust fund, which pay for public schools and school vouchers, may be trending in a different direction. And, taxpayer dollars spent on school vouchers means that those dollars are not available to fund public schools, school infrastructure, or school safety programs.
Read more from InDepthNH: Distant Dome: NH’s May Revenues Paint a Gloomy Picture for the Future
“Hate group” received nearly $50K in 2022-2023
The Immaculate Heart of Mary School in Richmond, NH is an approved vendor for the statewide school voucher program, and received $48,810 in taxpayer funds in the 2022-2023 school year. Recently, it was revealed that the school is run by an organization that is designated as a “hate group” by the Southern Poverty Law Center (SPLC), a nonprofit legal advocacy organization that specializes in civil rights.
According to a report from the Granite State News Collaborative, the school is run by the Saint Benedict Center, a “radical traditional Catholic” organization that has anti-semitic ties and has been denied as a Catholic organization by the Diocese of Manchester.
When asked to pause approval for the school on Monday, Kate Baker-Demers, the Children’s Scholarship Fund’s Executive Director in charge of vendor approval and administration of the program, refused, saying the report was “hearsay.”
Read more from the Granite State News Collaborative: A school run by a group on the SPLC’s ‘hate map’ is part of NH’s voucher program
Critical questions about voucher program administration remain unanswered
On Monday, a subcommittee of lawmakers charged with overseeing the administration of the statewide voucher program met with Kate Baker Demers, who is contracted to administer the program in New Hampshire.
Committee members had questions about how vendors are approved by the Fund, where students take courses, how parent reimbursements are verified, and how private schools in the state are leveraging the voucher program to supplement their own financial aid programs. Baker Demers did not answer most of the questions at the meeting, saying that she would bring the information to the next meeting.
One of the questions had to do with data sharing: according to a report, the Fund shared anonymized, student-level data with a pro-voucher lobbying organization for a report, but the state’s own oversight committee and state auditors have not had access to some of that same information only a few weeks ago.
Watch the full oversight meeting here. The next meeting of the oversight committee is scheduled for August 22, 2024.
About HB 1665
Negotiators from the House and Senate agreed on a voucher expansion package last week that would increase the income eligibility cap, would extend phase-out grants for school districts
whose students leave their public schools for a voucher, and lowers the administrative fee for the Children’s Scholarship Fund from 10% to 8%.
Increasing the income threshold would significantly increase the cost of the program, which has been over budget every single year of its existence. This year, school vouchers will cost taxpayers about $25 million; with the expansion, that number is expected to double to over $54 million.
The NH Department of Education has reported that over 80% of voucher recipients were already enrolled in private and religious schools or were homeschooled when they applied for a school voucher, and were not enrolled in public schools. This means an expansion of the voucher program will result in new state spending, since the state wouldn’t otherwise pay for those students.
About school vouchers
New Hampshire’s school vouchers are personal accounts that can be used to pay for certain education-related expenses, including private school tuition, homeschooling expenses, tutoring, books and materials, and transportation. Eligible families receive the base amount of state funding per student plus any additional aid for which their student qualifies (eligibility for school meals, special education services, English Language Learner program, or the third-grade reading aid).
When participating in the program, families agree not to enroll their child full-time into their resident district school or public charter school; however, families may enroll their children into public and charter schools part-time, depending on the policies of the school. However, it is unclear what processes are in place to prevent fraud.
Currently, students are eligible for participation in the program if they are eligible to enroll in a New Hampshire public school and meet the income eligibility guidelines at the time of application. Students only need to qualify in the first year of the program and do not need to meet the income eligibility guidelines in subsequent years.
Independent studies have found that outcomes for participation in similar school voucher programs in other states are, at best, mixed. However, more recent studies have suggested that these programs have had significant negative effects on student outcomes for the students who participate in them and have diverted funding from public schools. Researchers have stated that school vouchers “cause catastrophic academic harm” and have had a worse impact on student outcomes than any other policy or event in public school history, including the global pandemic.
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