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School tax credit proposals being debated in NH

Posted March 29, 2012, at 9:39 p.m.

CONCORD, N.H. — New Hampshire lawmakers are debating whether to give businesses a tax credit for donating to scholarship organizations created to send students to private or public schools.

The Senate voted 17-7 on Wednesday to pass their plan, and a similar, committee-endorsed plan in the House is up for a vote on Thursday.

Under both bills, the donations would be funneled through organizations that provide scholarships up to $2,500 to start but would be adjusted annually. Home-schooled children could receive one-fourth of that limit for educational expenses.

The bills also attempts to target low- and middle-income students for the scholarships and regulates 70 percent of the scholarships for the first year to students warranting adequate education grants but would decrease each year thereafter.

Supporters argue school districts that lose state aid for students getting scholarships to go elsewhere would save money because they would have fewer students.

The total amount of tax credits for businesses in the Senate version could not exceed $3.4 million in the first year and $5.1 million in the second year. After the second year when at least 80 percent of available credits had been used the limit would increase by 25 percent. Supporters say they lowered the amount of credits available the first year to decrease the risk of a spike in cost s.

“It’s kind of like having a trial program,” said sponsor state Sen. Jim Forsythe, a Strafford Republican.

The House version mimics the first two years, but would provide $6.8 million in credits the third year.

Opponents in the Senate questioned the constitutionality of the credits, which they say would be akin to paying for religious schools through taxes. Others opposed any promotion of private education at the expense of state revenue.

“If we begin to erode that system we’re going to have great conflict, and that’s something we shouldn’t have,” said state Sen. Lou D’Allesandro, a Manchester Democrat.

Eight other states currently have similar programs.

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