Covert, Convoluted And Unconstitutional

New Hampshire's Back-door Religious School Subsidy Is Challenged In Court

When Tom Chase received an email last year from Americans United about a scheme that will divert public funds to religious schools in his home state of New Hampshire, he was none too pleased.

“The thing that seems to escape the people who propose, pass and fight for these laws,” Chase told Church & State, “is that the state participating in religious activities through funding or any other overt (or covert) methods means that some religions are being supported more than others. I don’t think the state should be doing that.”  

Chase, an electrical engineer who has two children attending public schools, is one of eight plaintiffs in a law­suit filed last month by Americans United, the New Hampshire Civil Lib­er­­ties Union and the American Civil Lib­erties Union Program on Free­dom of Religion and Belief challenging the con­stitutionality of the New Hampshire Education Tax Credit Program (ETCP).

The three civil liberties organizations told the Strafford County, N.H., Superior Court that the program unlawfully diverts taxpayer funds to religious schools. Because there will be no state oversight of the schools receiving scholarship monies, the lawsuit asserts, religious schools will be able to use the funds for religious instruction and discrimination.

The ETCP, which took effect on Jan. 1, allows businesses to reduce their tax liability by receiving an 85 percent tax credit in exchange for donations made to K-12 scholarship organizations that pay for tuition at religious and other private schools. It allows up to $3.4 million in tax credits to be claimed in the first year and $5.1 million during its second year. Additional increases can occur in subsequent years.

“This program is an attempt to circumvent the law, and it is doomed to fail,” Alex J. Luchenitser, associate legal director at Americans United and lead counsel in the case, told Church & State. “The New Hampshire Constitution plainly bars this cockamamie scheme.”

The tax-credit program has been under fire from Americans United for over a year.

AU Legislative Assistant Emily Krueger noted in January 2012 on AU’s legislative blog that “there is no meaningful difference between tax credits and direct government reimbursement of private and religious schools.” Either way, she said, public funds are being put to use by private religious organizations.

Krueger added that tax credits and school vouchers are not real reform because they do not improve education; instead they divert money away from public schools while failing to boost academic achievement for the few students who receive the vouchers.

Multiple studies of school voucher programs in Washington, D.C., Milwaukee and Cleveland have shown that voucher students who attend private schools perform no better in reading and math than students in public schools, Krueger said.

In April, Americans United again expressed concern with the proposed New Hampshire program, this time through a letter to lawmakers explaining the potential harm it would do to public education as well as the constitutional issues that would arise.

“We oppose this tax-credit scheme because it is nothing more than a back-door voucher system, and has the same constitutional flaws inherent in voucher systems, as they are both subsidized by the state,” then-AU State Legislative Counsel Amanda Rolat wrote. “This bill violates the New Hampshire Constitution and represents misguided education reform policy.” 

Those who backed the bill, however, did not heed these warnings.

The Heartland Institute, a Chicago-based think tank, said the tax-credit ploy was the product of both the libertarian Cato Institute and the New Hampshire-based Jos­­iah Bartlett Center for Public Policy, a free-market think tank. 

Bartlett Center President Charles Arlinghaus called the ETCP “probably the best school choice bill we’ve had at any time in the past 20 years.”  

The measure was also backed by some religious organizations, including the Granite State Christian Schools Association, which said the ETCP will ensure that “options are made more viable for some families desiring Christian school alternatives to public education,” and the Tri-City Chris­tian Academy in Somersworth, which said the tax credit bill “would benefit mostly families of very modest means, who have chosen a faith-based school for their children.”

New Hampshire lawmakers ultimately sided with the interest groups, and the measure breezed through the state legislature in April and May.

“This is a win-win for parents and kids,” Senate Majority Leader Jeb Bradley (R-Wolfeboro) told the Nash­ua Telegraph after voting for the bill in May. “Not every kid fits in the same box.”

The ETCP hit a road block, however, when it was sent to then-Gov. John Lynch (D) for his signature. Lynch had reservations about taking money away from public schools.

“This bill shifts limited state funds away from public school districts, it will downshift the cost of reduced adequacy payments to local communities and property tax payers, it allows private organizations to determine the use of public education funds, and does not fully target scholarship funds to students most in need of help with tuition and other educational expenses,” he said in a statement.

Lynch vetoed the bill in June, but his action was overridden by the legislature that same month.

Advocates said the tax-credit program would benefit under-privileged students and does not favor sectarian schools over secular academies. But an analysis by Americans United puts those claims very much in doubt.

A minority of ETCP scholarships are reserved for students who qualify for the federal school lunch program or come from households with incomes not exceeding 300 percent of the federal poverty level ($69,160 for a family of four). A very similar tax-credit pro­gram in Arizona, which has also been the subject of lawsuits, is only available to students living in households with incomes not exceeding 185 percent of the federal poverty level.

Even traditional vouch­er programs in “school choice”-happy states like Indiana and Louisiana don’t offer vouchers to students whose household incomes exceed 250 percent (Louisiana) or 200 percent (Indiana) of the federal poverty level.     

“There is really no redeeming social purpose to this program,” Bill Duncan, founder of Advancing New Hampshire Public Education, told Church & State. “The plan is not even targeted to failing schools, and sponsors are now introducing legislation that would remove any targeting to low-income families.”

As for claims that students who receive vouchers would be equally likely to attend secular private schools as religiously affiliated ones, that seems unlikely based on data. The Josiah Bartlett Center compiled a list of the annual tuition rates for 46 private schools in the ten most populous communities in New Hampshire.

The 39 religiously affiliated schools listed had an average tuition of $5,449 while the seven secular schools had an average cost of $15,253. Under the guidelines of the ETCP, the average student scholarship cannot exceed $2,500 per year. The least expensive secular private school listed by the Josiah Bartlett Center cost $7,875 annually while four schools from the sectarian list cost under $2,500. 

“Given that kind of disparity of cost between secular schools and religious ones, it’s not hard to guess which school children will choose if they receive a voucher,” Americans United Executive Director Barry W. Lynn said.

Not only are New Hampshire’s religiously affiliated private schools much cheaper than their secular counterparts, they are more plentiful. AU’s legal filing noted that 61.2 percent of New Hampshire’s 116 private general-education schools are religious. All but one of those schools is affiliated with Christianity.

The filing also noted that these schools predominantly require religious components in the curriculum. For example, the Infant Jesus School, a Catholic elementary in Nashua, requires all students, “regardless of the[ir] religious affiliation,” to “participate in all liturgies, classroom prayer, and other aspects of the spiritual life of the school.”

Many find this sort of religion-infused curriculum unacceptable for taxpayer subsidy. 

“I do not want tax benefits to go to support objectionable teaching and proselytizing, particularly teachings and practices that discriminate against other citizens,” said lawsuit plaintiff Charles Rhoades, a graduate of Catholic school and former professor at New Hampshire University.

Since the tax credit is alarming to both education advocates and many religious leaders, a diverse group of plaintiffs stepped forward to bring the Duncan v. State of New Hampshire case.

Besides Chase, Duncan and Rhoades, the plaintiffs include the Rev. Richard Stuart, a minister in the United Church of Christ and former member of the New Hampshire House of Representatives; Stuart’s wife Ruth, a retired high school librarian; and Rep. Rebecca Emerson-Brown (D-Portsmouth), a parent and newly elected member of the New Hampshire House. 

Although the lawsuit is in the beginning stages, several plaintiffs expressed high hopes for its outcome. Duncan said he is “confident we will win,” and Ruth Stuart said she is “optimistic.”

Emerson-Brown said she doesn’t have a sense yet of how the case will turn out, but that the issues seem “fairly cut and dry; I don’t see how we can lose.”

She also said it is conceivable that New Hampshire lawmakers will want to avoid a long and expensive court fight by simply ending the tax credit.

“I think given today’s legislature, yes it could be repealed,” Emerson-Brown said. “It’s just not a very good bill.”  

Regardless of those possible outcomes, Richard Stuart said he is hap­py Americans United and its allies have given him a voice.

“Sometimes you feel kind of helpless, even as a former member of the New Hampshire legislature,” he told Church & State. “The way money for private schools and charter schools is being handled, it’s wrong. You guys came to the rescue.”