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Friday, March 30, 2012

Plan to give businesses tax credits for private school donations heads to Gov. Lynch

CONCORD – The House of Representatives on Thursday endorsed making New Hampshire the ninth state in the country to give business owners a tax credit for making donations to a nonprofit scholarship.

The legally clever yet valid way for the state tax code to subsidize donations to private schools now makes its way to the desk of a dubious Gov. John Lynch.

The credit would be 85 percent of those donations against either the 8.5 percent tax on corporate profits or the .75 percent business activity tax.

Those scholarships, of an average of $2,500, would go to parents wanting to send their child somewhere other than their assigned public schools.

The House bill, HB 1607, would make scholarships available to parents who earn up to 300 percent of the federal poverty level, equal to about $65,000 a year for a family of four.

“All families should have a choice in education, not just those who can afford to have one now,” said House Deputy Speaker Pam Tucker, R-Greenland.

The Josiah Bartlett Center for Public Policy has been the most vocal cheerleader for the credit.

Advocates devised it as a way to avoid the constitutional roadblock that faces plans for private school vouchers that would go directly to parents.

Rhode Island offers these credits, and state courts elsewhere have upheld them as constitutionally allowed.

“New Hampshire public schools are a great choice for many families, but they aren’t the right fit for every student,” said Charles Arlinghaus, executive director of the Josiah Bartlett Center for Public Policy. “The School Choice Scholarship Act is a constitutionally tested, financially prudent way to make real school choice affordable for more New Hampshire families.”

The House plan would limit the credits to $4 million in the first year up to $8 million by year three and up to 25 percent more than that every year thereafter.

“The size of this program is limited,” said Rep. William Ohm, R-Nashua.

Rep. Neal Kurk, R-Weare, said the state should pay for these scholarships since every child who leaves public school will cost local property taxpayers the $4,100 state per-pupil grant.

“I support the concept of competition in public education, and I support scholarships, but we need to pay for this rather than stick it onto local property taxpayers,” said Kurk, a former House Finance Committee chairman and fiscal conservative. “It is impossible for the school districts to decrease expenses just because one student leaves.”

The House approved the bill, 173-127.

Less than 24 hours earlier, the state Senate Wednesday night embraced by a 17-7 vote its own tax credit, SB 372, that was very similar to the House plan.

The Senate plan would limit credits to $6.8 million a year.

Gov. John Lynch has “real concerns” about the bill, said Colin Manning, his press secretary.

“You are using, essentially, public money for private education, and what would this mean for revenue, both at the state and local level?” Mannin said. “These schools have mostly fixed costs, whether there are 30 kids in the classroom or 29.”

Ohm said the small size of the program equals a quarter of 1 percent of what’s spent on public schools.

“For a school with 400 students, this would be the equivalent of the district losing one student, and by the third year of the program, it would be two students,” Ohm said.

Rep. Christine Hamm, D-Hopkinton, maintained that the impact of tax credits for public schools would be the same as vouchers.

“It remains in fact a shell game, a kick in the teeth to public education and a hand in the pocket of the local property taxpayer,” Hamm said.

Kevin Landrigan can reached at 321-7040 or klandrigan@nashuatelegraph.com; also check out Kevin Landrigan (@KLandrigan) on Twitter and don’t forget The Telegraph’s new, interactive live feed at www.nashuatelegraph.com/topics/livefeed.