The Hidden Costs of the Expanded Voucher Program

Every year since the voucher program was established, it has run millions of dollars over budget because contrary to its intended purpose as a poverty program, the vast majority of applicants have been students who were already attending private school at no cost to taxpayers.

Representative Mel Myler (D-Hopkinton), Ranking Democrat on the House Education Committee, said “Republicans are clearly scared that public opposition to the school voucher program will grow even stronger if the financial impact to taxpayers becomes known. Subsequently, the Chair of Finance waived referral of the bill to the Finance Committee which means there will be no review of the fiscal impact on the state budget.

The New Hampshire house voted 190-189 to pass HB 1665 which raises the income cap for the EFA school voucher program to 500% federal poverty level, $150,000 for a family of four. The bill will now go to the NH Senate where there may be a chance to kill it.

Expanding the voucher program to households up to 500% poverty ($150,000) will make thousands of additional private school students eligible and balloon the cost of the program even further. Instead of having an honest review of what this bill would mean to taxpayers, Republicans have decided to stick their heads in the sand and hope that the public is too busy to pay attention.

This bill further breaks away from the voucher program’s intended purpose as a poverty program by raising the income limit to $150,000 annual income for a family of four, which is much higher than practically every other government assistance program. Republicans have even rejected efforts to provide school meals to students above 185% poverty. This voucher expansion is extremely misguided and the decision to skip Finance Committee review is the height of fiscal irresponsibility,” according to Representative Myler.

Democrats Stop Two Voucher Bills From Advancing

Removal of income cap would cost taxpayers an additional $100,000,000 per year

The New Hampshire House voted to defeat two bills, HB 1561 and HB 1634, that would greatly expand the EFA school voucher program. HB 1561 sought to expand the program to students from specific categories, including those who had a fear for the common cold. HB 1634 would eliminate the income cap altogether, opening the program to all 21,000+ students currently in private education.

House Democratic Leader Matt Wilhelm (D-Manchester) said, “The school voucher bills just defeated were misguided attempts to drastically alter the program from its intended purpose, at great expense to taxpayers. When the voucher program was first enacted three years ago, it was touted as a way to help students from low-income families, who were struggling in public school, find alternative options that their families could afford. HB 1561 and HB 1634 would have eliminated the income cap each in their own way, putting taxpayers on the hook for an additional $100,000,000 a year to subsidize private education for the ultra-wealthy.

Private and religious schools are exempt from anti-discrimination guidelines and not required to protect or even accept students from marginalized communities. It feels completely disingenuous for Republicans to claim that they are trying to protect LGTBQ+ youth today, on the heels of voting to enable state-sanctioned discrimination against them just last week.

Trying to expand this program to include all 21,000 students already in private education, which currently costs taxpayers nothing, is the height of fiscal irresponsibility. Democrats are committed to protecting hardworking Granite Staters from these irresponsible bills that our state cannot afford.”

NH Property Tax Payers Can't Afford More Corporate Tax Cuts

Corporate tax rates for New Hampshire businesses have drawn even with our neighboring states after years of cuts, and NH businesses are showing record profits along with nearly every established business in the United States thanks to a robust economy.

As introduced, House Bill 1422 called for yet another cut to the business profits tax (BPT), the rooms and meals tax and the communications tax that could reduce revenue to New Hampshire by over $2 billion dollars over the next 6 years, according to an analysis by the NH Department of Revenue Administration. The hearing on HB 1422 produced no evidence that recent tax cuts have either enticed new businesses to come to New Hampshire or encouraged material expansion of those already here. In fact, the continuation of years of tax cuts may even destroy the economic momentum we have recently seen by depleting state resources that both residents and businesses rely on.

Smart businesspeople in NH know that the best way to keep growing our economy is to fill the vacant jobs, with a healthy, educated workforce who can afford to live in this state. The BIA has made this clear to the Ways and Means Committee year after year and our committee heard NO testimony from the Business and Industry Association (BIA) or any business endorsing the continued tax reduction proposed in HB 1422. Property taxes are a bigger concern than reducing the BPT. In fact, only 20 percent of businesses pay 80 percent of the business profits tax with most NH businesses paying nothing at all.

The annual corporate tax giveaway of $350 million proposed in HB 1422 will cost as much as it takes to fund the very agencies and services that business and our citizens rely on including the Dept. of Safety, Veterans Home, University and Community College systems combined, Child Protection Services, Housing and Homelessness services, Mental Health Services, and Drug and Alcohol Services combined at HHS, and the Division of Medicaid Services.

The tax issue we should focus on is the regressive and punitive property tax situation faced by both business and personal property taxpayers. Bills like HB 1422 may only force local communities to raise property taxes to cover for the many services the like public education, public workers’ pensions, and vital health services now provided by NH Department of Health and Human Services, to name a few.

Today, 52 percent of New Hampshire’s tax base comes from the property tax. While the state of NH has little to no control over these taxes, HB 1422 will further reduce statewide revenue forcing businesses and Granite State property taxpayers to pay even higher property taxes.

HB 1422 has temporarily died in the Ways and Means Committee after House Republicans said that this should be looked at next year when we put together the budget. Several members of the House Republican leadership signed off on this bill so I’m sure we will see this again.