Education Tax Credit

The Supreme Court will release its ruling later this morning on whether a small but controversial school choice program is constitutional. 

Under the 2012 law, businesses that donate to private scholarship organizations can receive an 85 percent tax credit. The organizations then give scholarships to students attending private schools, homeschool or an out-of-district public school. Seventy percent of the scholarships go to public school students who leave the public school system for another option.

The administration of Governor Maggie Hassan has submitted brief in support of a Superior Court ruling that crippled a controversial Education tax credit program. The program gives tax breaks to businesses that donate to scholarship funds. The scholarships are then used to help students switch to a private school or homeschooling.

Last spring a judge ruled it was unconstitutional to use those funds to give scholarships to students going to religious schools. The New Hampshire Supreme Court is set to review that decision this spring.

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.

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.

New Hampshire's Legislature has voted to override a bill vetoed by Gov. John Lynch that is intended to help public school students switch to private schools.