The Department of Revenue Administration has released a memo clarifying the rules surrounding a controversial education tax credit scholarship. The memo makes clear that the state’s largest scholarship organization will have to change how it operates next year.
The Network for Educational Opportunity will have to give 70 percent of its scholarships to individual public school students. This year it’s giving 70 percent of the funds to just 13 public school students. That’s the lion’s share of the funds going to just 12.6 percent of scholarship recipients.
Oral arguments were heard Friday in a lawsuit which will determine if the state’s new education tax credit is constitutional. The state argues that for the tax credit to be considered unconstitutional, the judge has to consider first if directing money through a tax credit is the same as spending money in the budget. Next the judge will have to determine if because some parents use that money to send their kids to religious schools, does that violate the state’s constitution?
Ten North Country representatives – all Democrats - were among those who voted Wednesday to repeal the education tax credit.
Six North Country representatives – all Republicans – voted against the repeal.
As NHPR’s Sam Evans-Brown reported the law grants an 85% tax credit to businesses that donate to scholarship organizations, which give the money to students going to a private school, an out-of-district public school, or home school.
The House Ways and Means Committee heard testimony Thursday on a bill that would repeal the School Choice Scholarship Act, which passed last year. The act allows businesses to receive a tax credit when they donate scholarship money to private schools.
Many of the same arguments that were heard last session came up again this time, as lawmakers debated whether or not a tax credit for businesses that fund private and even religious schools is wise – or even constitutional.
On January 1st businesses can start getting tax breaks for donating to organizations that give public school students money toward going to a private school. But before that law has even taken effect, there are proposals to change it.
The business tax credit scholarship law was never popular with Democrats, who called it a back-door school vouchers measure. Governor-elect Maggie Hassan has said that she would try to repeal it, and a Manchester Representative, Peter Sullivan, will file a bill that would do just that.
North Country legislators were almost evenly divided about whether to override Gov. Lynch’s veto of a bill that would give tax credits for businesses that make donations to not-for-profit schools.
As NHPR has reported Lynch said “the proposed bill would siphon public money away from public schools and give it to private ones. He said the budget gaps the plan would create would have to be covered by increases in local property taxes.