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Lawmakers Consider Business Tax Credits for Scholarships this Week

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January 23, 2012

CONCORD, N.H. - New Hampshire lawmakers will consider bills both in the House and Senate that would give tax credits to businesses that contribute to private scholarship funds for pupils who attend private, religious or home schools.

However, Jeff McLynch, executive director of the New Hampshire Fiscal Policy Institute, says the measure would be costly for state officials to implement and would divert tax revenue from public services to private interests. Under the bills, a maximum of $15 million in credits would be granted, which could grow to $20 million or more over time. The individual scholarships would be $2500 or less.

"Given the state's current budget crisis, that means the state is going to have to cut spending by $15 to 20 million over time. Those spending cuts would be made largely to subsidize the private school attendance of families who likely have the financial ability to send their kids to those schools already."

McLynch says state aid to public schools would likely suffer under the bills.

Sponsors say they will show that the proposed legislation would save the state about $1 million. If the bills pass both the house and senate, the law would take effect in July of this year.

District Four State Senator Jim Forsythe, the lead sponsor of the Senate version of the bill, says the measure is really about providing choice and would benefit lower-income parents who fall within 300 percent of federal poverty guidelines.

"Other states that have done this have seen about 75 percent of the scholarships go towards people that are at that level of poverty or below. The bottom line is wealthy people already have school choice; this is extending school choice to people of lesser means."

Mark Joyce, the executive director and treasurer of the New Hampshire School Administrators Association, believes the measure would be poor public policy because it would reduce funds for public schools.

"So, we are taking general assistance tax money away from a public good, and by discretion giving it to parents for some private right of action."

He adds that most schools have scholarship and financial aid programs of their own.

The bills ares: HB1607, SB372.

Monique Coppola, Public News Service - NH