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Wednesday, January 30, 2013

Virginia organization joins battle over tax credit constitutionality

CONCORD – A battle over the constitutionality of the state’s education tax credit gained another player Tuesday, as Virginia-based Institute for Justice filed papers to defend the program against a legal challenge filed earlier this month.

The institute aims to defend the tax credit against a legal challenge filed Jan. 9 in Strafford County Superior Court by Americans United for Separation of Church and State, the American Civil Liberties Union and the New Hampshire Civil Liberties Union. ...

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CONCORD – A battle over the constitutionality of the state’s education tax credit gained another player Tuesday, as Virginia-based Institute for Justice filed papers to defend the program against a legal challenge filed earlier this month.

The institute aims to defend the tax credit against a legal challenge filed Jan. 9 in Strafford County Superior Court by Americans United for Separation of Church and State, the American Civil Liberties Union and the New Hampshire Civil Liberties Union.

“Education Tax Credit Programs like New Hampshire’s do not violate state constitutional provisions that prohibit state funds from directly aiding religious schools because tax credit programs rely entirely on private funds, private organizations, and private decision makers,” the institute’s lead attorney Dick Komer said in a statement.

The 25-page suit maintains that the tax credits amount to illegal support for religious schools, since 61 percent of students in private schools attend parochial studies. The suit surmises that most of the credits will go to religious schools, since the credits are capped at $2,500 a student and nonreligious school tuition is more than twice the cost.

The Republican-led Legislature adopted the tax credit over the veto of former Democratic Gov. John Lynch last spring. The program provides credits to businesses that donate to organizations that fund scholarships to low-income families sending their students to private schools and tuitioned public schools.

The law went into effect Jan. 1, and the program is still being implemented. Network for Education Opportunity, the state’s only scholarship organization, has yet to award scholarships.

The suit requests an injunction to put an end to the implementation.

The Institute for Justice denied the suit’s arguments in a statement Tuesday, saying the tax credit program does not violate the state constitution and that an injunction would hurt New Hampshire families.

“There is no reason for the court to halt the program right now,” Komer said. “There is plenty of time for the court to give this case the measured consideration it deserves before any funds donated to (Network for Education Opportunity) are awarded to parents.”

The Institute for Justice has defended tax-credit-funded scholarship programs similar to New Hampshire’s in Arizona and Illinois.

The tax credit program also is being challenged in the Legislature. The House Ways and Means Committee will hold a hearing Thursday on a bill to repeal the tax credit law passed last summer. The bill was filed earlier this month by several House Democrats.

The total amount of tax credits that could be issued the first year is $3.4 million but so far only about $120,000 has been pledged toward scholarships for the next school year.

Danielle Curtis can be reached at 594-6557 or dcurtis@nashuatelegraph.com. Also follow Curtis on Twitter (Telegraph_DC).