Judge says N.H.’s new education tax credit violates state Constitution
New Hampshire’s new education tax law violates the state Constitution’s ban on sending public money to religious schools, but the program can continue to provide scholarships for secular schools and homeschooling, a judge ruled yesterday.
The 45-page ruling from Strafford County Superior Court Judge John Lewis was issued nearly two months after he heard three hours of arguments over the program’s constitutionality.
The case is almost certain to go to the state Supreme Court on appeal.
“This decision is a great victory for public schools and for anyone who doesn’t want tax dollars to pay for religious indoctrination and discrimination,” said the Rev. Barry Lynn, executive director of Americans United for Separation of Church and State, one of three civil liberties groups that challenged the 2012 law in court.
Ashley Pratte, executive director of the conservative group Cornerstone Action, said she was “appalled” by the ruling.
“The education tax credit was carefully established to work within New Hampshire law. In fact, it is run solely on donations from businesses,” she said. “It is not derived from taxpayer funds and is, in fact, a charitable program working to the benefit of our most vulnerable families in the Granite State.”
Gov. Maggie Hassan, a Democrat who opposes the tax credit law, called yesterday’s decision “a victory for New Hampshire public education.”
The education tax credit law was enacted last year by the then-Republican-dominated Legislature, over a veto from then-Gov. John Lynch.
Starting this year, it allows a New Hampshire business to reduce its state tax bill by donating money to a nonprofit scholarship organization. That organization then awards scholarships to help families defray home-schooling costs or pay the cost of tuition at out-of-district public schools and private schools, including religious schools.
Opponents of the program argue it diverts money to private and religious schools at the expense of public schools, and uses public funds to support the teaching of religion. Supporters of the law say it gives low-income families the opportunity to afford the best school for their children, and argue it doesn’t involve public funds because money never passes through the government’s hands.
Legislation to repeal the program passed the Democratic-led House this year but was blocked by the Republican-led Senate. That left the court challenge – a lawsuit filed in January on behalf of eight residents, led by former Executive Council candidate Bill Duncan – as opponents’ best hope for overturning the law.
Lewis yesterday ruled the law violates Article 83 of the New Hampshire Constitution, which states that “no money raised by taxation shall ever be granted or applied for the use of the schools of institutions of any religious sect or denomination.”
Lewis found the program uses public funds, even if funding doesn’t come directly from the government. Money that would have flowed to the government, he said, is instead diverted for a specific purpose.
“A taxpayer’s interest is . . . not dependent on the number of hands the money passes through. A taxpayer’s concern arises when a large portion of the donated funds are, as here, realized very much through a tax credit,” Lewis wrote.
Thus, Lewis wrote, “the program has been shown to have ‘money raised by taxation’ inevitably go toward educational expenses at nonpublic ‘religious’ schools without restriction regarding how the money may be used,” and so violates the Constitution.
But Lewis didn’t strike down the entire law. He said it can continue to provide scholarships for secular private schools, out-of-district public schools and homeschooling.
“The program was enacted to promote parental choice, expand educational opportunities for New Hampshire students and improve the quality of education in New Hampshire,” Lewis wrote. “If the court disallows scholarship funds to be used at ‘religious’ schools, but otherwise allows the program to go forward, the program’s goals will be hampered, but not entirely stymied.”
That was disappointing news for Kate Baker, executive director of the Network for Educational Opportunity, the state’s first scholarship organization.
“Today’s ruling is regrettable since it imposes a limitation on the options available to parents,” she wrote in an email. “We believe all options should be available to parents seeking to be the ultimate decision-makers on what arrangements suit their children’s precise learning needs.”
(Ben Leubsdorf can be reached at 369-3307 or
firstname.lastname@example.org or on Twitter @BenLeubsdorf.)