N.H. Supreme Court lets tax credit dollars flow to religious schools
The state Supreme Court yesterday allowed a controversial education tax credit to remain in place, despite a lower court’s decision that it unlawfully diverts public money to religious schools.
The court did not rule on the merits of the program, as many had anticipated, but said instead that the plaintiffs contesting it lacked legal standing to bring their claims in the first place.
“Our decision in this case does not mean that a taxpayer can never have standing to challenge governmental actions,” Chief Justice Linda Dalianis wrote for the court. “When a taxpayer has a sufficiently personal and concrete interest to confer standing, the taxpayer may seek judicial relief.”
The plaintiffs, including former Executive Council candidate Bill Duncan, claimed that they did have a direct interest, as the program would reduce state revenue and drain money from public schools, where some of them teach or have children.
Legislators passed a law in 2012 that made it easier for taxpayers to challenge government action, regardless of their personal ties. But the justices yesterday found that unconstitutional because, they reasoned, it forces them to act as legislative advisers in certain cases.
Alex Luchenitser, the plaintiffs’ lead attorney, said that decision will have broad and lasting implications.
“It basically slams the door on New Hampshire taxpayers and citizens who want to challenge unconstitutional conduct by the state or local bodies,” he said.
The tax credit program has been divisive from the beginning. Enacted in 2012 over a veto by then-Gov. John Lynch, it encourages businesses to donate tax dollars to scholarship organizations that help students attend private schools, including those with religious backing. Critics argue it strips public institutions of funding and inappropriately supports religious education. Supporters counter that it strengthens public schools through competition and provides opportunities for low-income families, and that the money never passes through government hands.
Last June, a Strafford County Superior Court judge ruled that the program had in fact violated the state Constitution, and he said religious schools could no longer participate. Yesterday’s ruling effectively reinstates the program in its entirety.
Gov. Maggie Hassan has previously opposed the tax credits, and she urged legislators yesterday to repeal it.
“I continue to believe that the voucher tax credit is unconstitutional and am disappointed that the Supreme Court did not rule on the underlying issue,” she said in a statement. “The voucher tax credit is bad public policy for public education in New Hampshire and our taxpayers, diverting millions of dollars in taxpayer money with no accountability or oversight to religious and private schools at the expense of public schools and property taxpayers across the state.”
Others, however, lauded the court’s decision.
“This is a great day for parental liberty in New Hampshire,” Dick Komer, an attorney for the Network for Educational Opportunity, which has received money through the program, said in a statement. “We are delighted that the Supreme Court recognized that the trial court erred in allowing this case to proceed.”
Under the law, businesses that donate to a scholarship organization can receive up to 85 percent of it back in tax credits. The money funds tuition costs at private, religious and home schools.
The program requires 70 percent of the scholarships to be used on students at public schools – a point often targeted by opponents. In April, when the case was argued before the court, Luchenitser said public schools lose about $3,700 every time a student leaves for another school.
The program allowed for up to $5.1 million in scholarships this year, and it provides for additional increases in tax credits in future years.
The plaintiffs in the case were represented by Americans United for Separation of Church and State, the New Hampshire Civil Liberties Union and the American Civil Liberties Union.
Luchenitser said the groups cannot appeal the decision, but can bring a new legal challenge if they find plaintiffs who are directly impacted by the program, such as a school or school district.
(Jeremy Blackman can be reached at 369-3319, firstname.lastname@example.org or on Twitter @JBlackmanCM.)