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Editorial: Striking down education tax credit protects taxpayers

The subterfuge had the sophistication of a child hiding behind his fingers, but the conservative backers of the education tax credit law designed to shunt public money to religious schools convinced themselves that it was legal. They didn’t convince then-Gov. John Lynch, whose veto they had to override to enact the law, and they didn’t convince Strafford County Superior Court Judge John Lewis, who earlier this month correctly deemed the scheme unconstitutional.

Here’s how the plan was designed to work. The state Constitution, for the past 136 years, has specifically stated that “no money raised by taxation shall ever be granted or applied for use of the schools of institutions of any religious sect or denomination.”

To get around that prohibition, the law’s creators authorized the granting of tax credits to businesses that donate to a group that grants scholarships averaging $2,500 to subsidize the education of students in private schools, both secular and religious.

Those who answer the call are then given a credit against any state business profits or enterprise taxes owed worth up to 85 percent of their donation. Because the money never makes it into the state’s hands, supporters claim, it’s not public money.

Lewis didn’t buy it. “Money that would otherwise be flowing to the government is diverted for the very specific purpose” of providing the scholarships, he wrote. It would be unconstitutional to direct money meant for the state treasury to a school with a religious affiliation, he said, and he issued an injunction against doing so. The state Supreme Court, when the expected appeal of Lewis’s ruling is considered, should uphold his decision.

The Office of the Attorney General no doubt feels duty-bound to defend any duly passed law, however wrongheaded, before the court, and Richard Head, the lead attorney for the state on the case, has announced his intention to appeal. Head contends that the business donations, though the state reimburses donors for the bulk of them, should not be considered public money. The high court should disabuse him of that fiction.

Head also isn’t convinced that taxpayers, as opposed to businesses, deserve to have standing to challenge the law. They should, because they are certainly harmed by it. The tax credits rob from the public purse in two ways: first by taking money meant for the treasury which, unless spending is cut, means other taxpayers must pay more.

Second, at least in the initial years of the scholarship program, the great majority of the grants by law must go to students who leave public school for private school or home schooling. When that happens, the local school district loses state education aid because that sum, roughly $3,500 per student, follows the child. That starves the public school, since its costs for classrooms and teachers don’t go down when one or even a dozen children withdraw. That means school spending must be cut or property taxes raised.

Most of the 1,000 applications for aid received by the Network for Educational Opportunity, the major scholarship granting organization, have come from parents whose children already attend a private school, generally one with a religious affiliation.

Some of them believe that the constitutional ban on state support for religious schools, and Judge Lewis’s ruling, discriminates against them, but they have it backwards. What the Constitution does, and should continue to do, is to protect them from being forced to support, with their tax money, a religious institution against their will, a protection that shouldn’t be undone with a cheap trick.

CORRECTION: This editorial was updated July 1, 2013, to correct the age of the constitutional language cited in the second paragraph.

Legacy Comments3

"Head also isn’t convinced that taxpayers, as opposed to businesses, deserve to have standing to challenge the law. They should, because they are certainly harmed by it." Of course the Monitor was pleased when the NH Supreme Court refused to allow Jim Baer to sue the Concord School District as a taxpayer, or when the US Supreme Court denied standing to people affected by California Proposition 8 - only liberals should be allowed to challenge government. Note that the IRS allows charitable deductions for donations to churches, in fact failing to do so might violate the 1st amendment by providing different treatment to religious speech. A good lawyer might get the NH prohibition struck down on those grounds.

Liberals, democrats, progressives or what ever they call themselves actually believe that all money is the Governments FIRST and they are elite so they get to choose how much of your money you get to keep.

Not so. If donors are expecting a tax credit, then the amount credited is in fact government money: it directly affects public schools, and depletes the tax coffers that support those schools. As the judge's decision stated: “'Money that would otherwise be flowing to the government is diverted for the very specific purpose' of providing the scholarships..." This law was specifically designed as a tax dodge to support religious schools, at the expense of the public schools--and the taxpayers.

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