Lawsuit aims to block N.H. tax credit that funds scholarships

Last modified: 1/11/2013 12:19:43 AM
Opponents of a new tax credit that funds scholarships to help New Hampshire students attend private and out-of-district public schools filed a lawsuit yesterday arguing that the program violates the state Constitution’s separation of church and state.

A rabbi, two pastors and a Democratic state representative are among the eight plaintiffs represented by lawyers from the New Hampshire Civil Liberties Union, the American Civil Liberties Union and Americans United for Separation of Church and State.

In a lawsuit filed in Strafford County Superior Court, they argued that because most private-school students in New Hampshire attend religious schools, the tax-credit program will divert taxpayer money to schools that teach religion and discriminate in hiring and admissions on the basis of religion.

“Of course, religious schools are entitled to teach their beliefs and serve or employ those who share their beliefs,” the lawsuit states. “But, under the New Hampshire Constitution – in order that religious liberty may thrive and that neither religion nor government may have any undue influence upon each other – tax funds cannot support such religious endeavors.”

Defenders of the tax-credit program point to a U.S. Supreme Court decision handed down in April 2011 as proof that it’s legal. In Arizona Christian School Tuition Organization v. Winn, the nation’s high court ruled that a tax credit is different than a government expenditure, and taxpayers didn’t have standing to challenge a tax credit simply on the basis that they are taxpayers.

“The court already ruled that money that never goes through government hands isn’t government funding. . . . Because it’s privately funded by the businesses, it’s been ruled constitutional,” said Kate Baker, executive director of the New Hampshire chapter of the Network for Educational Opportunity, the first scholarship organization to set up shop under the new law.

New Hampshire’s tax-credit program was created last June by the then-Republican-led Legislature, overriding a veto by then-Gov. John Lynch, a Democrat. It allows businesses to receive credits against their state business-tax bills if they donate to nonprofit scholarship organizations that then help families pay for tuition at private schools or at public schools outside their home districts, or help defray the cost of homeschooling.

At the time, opponents including the NHCLU argued the program was unconstitutional. The state Constitution says “no person shall ever be compelled to pay towards the support of the schools of any sect or denomination,” and 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.”

Supporters say the program, which went live Jan. 1, will help low-income families pick the best educational option for their children.

“I’ve heard from about 60 families so far, and they are more than half free- and reduced-lunch-income level families,” Baker said. “And particularly in these economic times, these families really do have an authentic need. . . . I’m really looking forward to helping them and I’m going to continue to do this work and make sure that they get the help that they need.”

The plaintiffs in the lawsuit filed yesterday asked a judge to declare that the law violates the state Constitution. In 1969, they argued, the state Supreme Court struck down a $50 tax credit for property owners with children attending private schools, which the lawsuit described as “materially indistinguishable” from the tax-credit program.

They also asked for a preliminary injunction to block the new program from being implemented.

“They’ll set up a hearing, hopefully, within the next couple of weeks,” said Barbara Keshen, an NHCLU staff attorney.

The lawsuit was filed in Strafford County, the groups said, because two of the plaintiffs, Thomas Chase and Charles Rhoades, live there.

The attorney general’s office, which defends the state in court, didn’t have any immediate comment on the content of the lawsuit.

“We’ve received a copy of the complaint and we are analyzing the merits of it, and will be defending the litigation,” said Mary Ann Dempsey, chief of the civil law bureau in the attorney general’s office.

House Republicans, in the minority following the November election, issued a statement yesterday defending the program.

“We believe the school choice law is constitutional,” said Minority Leader Gene Chandler of Bartlett, adding, “It is a shame that we now have an out-of-state special interest group leading the charge to challenge this law. This frivolous lawsuit will no doubt cost the taxpayers of New Hampshire money and tie up resources.”

Still, two bills have been filed at the Legislature this year to repeal the tax-credit program. And Gov. Maggie Hassan, a Democrat, said during the fall gubernatorial campaign that she opposed the program and reiterated her opposition yesterday.

“The governor does not support the last Legislature’s voucher program, which diverts millions of taxpayer dollars to religious and private schools with no standards or accountability,” spokesman Marc Goldberg said in an email.

In addition to Chase and Rhoades, the plaintiffs in the lawsuit are:

∎ Bill Duncan, founder of Defending New Hampshire Public Education and Advancing New Hampshire Public Education.

∎ Rep. Rebecca Emerson-Brown, a newly elected Democratic state representative from Portsmouth.

∎ The Rev. Homer Goddard, a retired Unitarian Universalist minister.

∎ Rabbi Joshua Segal, rabbi emeritus of Congregation Betenu in Amherst.

∎ The Rev. Richard Stuart, a United Church of Christ pastor and a former Democratic state representative from Laconia, and his wife, Ruth Stuart, a retired high-school librarian.

All are described in the lawsuit as paying state taxes and objecting to the tax-credit program on various grounds.

(Ben Leubsdorf can be reached at 369-3307 or or on Twitter @BenLeubsdorf.)

Concord Monitor Office

1 Monitor Drive
Concord,NH 03301


© 2019 Concord Monitor
Terms & Conditions - Privacy Policy