March 21 2012
New Hampshire Tax-credit Scholarships Make Good Education and Economic Sense
Vicki E. Alger
The school-choice prospects just got a little brighter for Granite State students and their families. The New Hampshire Senate just voted 15-9 in favor of a corporate tax-credit scholarship program. Non-profit scholarship organizations would collect donations for scholarships worth up to $2,500 so students from low- and middle-income families could attend the public or private school of their choice. Home-schooled students would be eligible for scholarships worth one-fourth of that amount for educational expenses. Corporate taxpayers would receive 85 percent of their donations as a credit against their tax liability. A similar bill is making its way through the House. If adopted New Hampshire’s tax-credit scholarship would become the country’s 35th school choice program.
Critics, however, insist that the program is a “backdoor voucher” that would be unconstitutional for funneling public dollars to private schools. Sounds reasonable at first blush, except that tax-credits are not vouchers. Unlike vouchers, which are funded with public dollars, tax-credit scholarships are funded by private donations—which are not the de facto property of government or public schools. At least, that’s what the U.S. Supreme Court decided last year in Winn v. Garriott, a case against the country’s first tax-credit scholarship program established in Arizona back in 1997.
Tax-credit scholarships also save money. As with any tax credit, there is an upfront loss in general-fund revenue; however, that loss is offset by savings when children use scholarships to attend private schools instead of more expensive public ones. According to the U.S. Department of Education, New Hampshire public-school spending is just over $13,000 per student. In contrast, private school tuition averages around $8,500 nationally. Children should not be trapped in schools that don’t work for them. A tax-credit scholarship program would go a long way toward helping them.