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Democratic state senator proposes annual income test for Education Freedom Accounts

Allegra Boverman for NHPR

A Democratic proposal to add a means testing requirement to the new state scholarship program that allows qualifying families to use tax money to pay for private, parochial or home school costs ran into opposition during a hearing before a GOP-led committee Tuesday.

Under the bill, proposed by Sen. Tom Sherman of Rye, families would need to verify every year that they qualified for the program, which now caps income eligibility for the scholarships at 300 percent of the poverty line, which would be $79,500 for a family of four.

“This is not about the folks who are accessing this,” Sherman said of his bill. "It’s just saying, let’s do at least some annual level of means assessment for the children who are participating and make sure they still meet the goals of the program.”

Sherman’s bill has the backing of the New Hampshire chapter of the National Education Association, which represents public school teachers, and the state School Boards Association. But it faces an uphill fight in a Republican-controlled State House that’s also debating proposals to expand the scholarship program. Republicans, including Gov. Chris Sununu, have hailed the program as a way to empower families of modest means when parents or caregivers decide public schools don’t meet their children’s needs.

“It’s about giving opportunity, so that every child can thrive, “ Bedford Republican Sen. Denise Riccardi said.

Sherman repeatedly argued that higher property taxes are inevitable under the new program if it remains the same.

But Republicans on the committee were dismissive.

“All property taxes in the cities and towns in New Hampshire stay locally (sic),” Sen. Erin Hennessy of Littleton said. “So nothing comes to the state to be distributed locally.”

“I didn’t come to argue with you, Senator, but I will say I disagree,” Sherman said.

The long-term financial implications of the scholarship program, which is considered the most permissive of its kind in the country, remains unknown due to the novelty of the program. Families are eligible for payments, starting at $4600 per student, and the state has so far issued about $8 million dollars worth of scholarships. That translates to about 1 % of overall state education spending.

But that figure could grow quickly. The New Hampshire Department of Education projected 28 students would enroll in programs in the first year; in fact, 1,635 ended up doing so. Seventy percent of recipients hadn’t attended public school in two years.

And under the law, once a student's family qualifies for the program they can continue to participate even if their economic circumstances change. Kate Baker Demers, who administers the scholarships through the Children Scholarship Fund. a nonprofit that contracts with the state, told the committee her organization collects financial information from families every year, and said controls already exist to detect possible fraud.

“For example, if somebody takes their tax return form and is trying to do something fraudulent on it, you can see where someone might have used whiteout,” Demers assured the committee.

Josh has worked at NHPR since 2000.

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