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Legislature Overrides Governor Veto of Education Tax Credit Bill
This week, the Legislature adopted SB 372, the education tax credit bill that creates a voucher system for New Hampshire. Considered first in the Senate, the vote to override the Governor's veto was adopted on a 16-7 vote, the minimum required for the 2/3 margin of approval. Senators voting against the bill, and to sustain the veto, were Senators D'Allesandro, Houde, Kelly, Larsen, Merrill, Odell and Stiles. The bill then went to the House, where it was adopted on a roll call vote of 236-108 (the House roll call results are available here).
The bill now becomes law, and the first program year of the newly adopted education tax credit program will begin on January 1, 2013. The new law provides an 85% education tax credit against the business profits and/or the business enterprise tax for contributions to scholarship organizations that award scholarships (vouchers) for attendance at a nonpublic school, a public school outside the pupil's resident district, or for limited home education expenses. The average value of scholarships must be $2,500 for private school students and 25%, or $625, for home school students. These values increase annually by the Consumer Price Index (CPI). Initially, 70% of scholarships must go to students currently attending a public school. Allowed tax credits are phased-in, with a maximum of $3.74 million in tax credits for the first year, $5.61 million in the second year, and $7.02 million subsequently, with 25% increases allowed in each fiscal year if the amount of total donations used for scholarships exceed 80% of the current year's amount allowed. For students receiving vouchers and identified in a district's ADM count for adequacy payments, deductions of those aid amounts will be made to the resident district. If that total amount is greater than ¼ of one percent of the school district's total appropriations for the prior year, a "stabilization grant" is made equal to the amount in excess of ¼ of one percent.
These tax credits will result in less revenue for the state, while local districts have current state funding obligations that are not being met. The 'recapture' of state adequacy aid occurs after budgets have been adopted and simply represents a further downshift of costs onto the local property tax. In effect, the state has relied on local funds to help promote a questionable state policy initiative that changes the focus from public to private education.
NHSBA opposition to this legislation was based on long-standing adopted resolutions, including School Choice resolutions I:A and I:B in the Policies, Resolutions and Statements of Belief Manual. The office will provide a thorough analysis of this new law as well as a complete summary of the legislative session in the near future. Questions concerning details of any legislative issue may be directed to Dean Michener, NHSBA Director of Governmental Affairs, at 603-228-2061.
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