Capital Beat: Questions still loom over school choice bill

Monday, January 15, 2018

The vote was conclusive: 184-162 in favor of Senate Bill 193, a transformative proposal to allow eligible parents to use state funds for private education. Republicans celebrated. After clearing the Senate and now the House, the long-awaited “school-choice” bill had entered its final lap ahead of assured passage at the governor’s desk.

But the bill hasn’t made it there yet, and its next stop could prove its biggest challenge.

Arriving before the House Finance Committee for a preliminary hearing Tuesday, SB 193 will come under one more round of scrutiny before its passed back to the House. At issue will be the cost: how many families will avail themselves of the new “education savings accounts,” and how much will the state need to pay to cover them.

The problem? Getting to these numbers is not an exact science. Part of it comes down to the nature of the bill.

SB 193 allows state adequacy funds – normally provided to schools districts at about $3,600 per pupil – to be placed into savings accounts for use at private schools or for home schooling. Restrictions have been placed on who can take part: those with annual household incomes below 300 percent of the federal poverty level are eligible, for instance, as well as those of all income levels who applied to and weren’t admitted to a charter school.

But after concerns were raised that an exodus of students from a school could hurt that school’s budget, a failsafe was introduced: schools losing more than 0.25 percent of students would receive “stabilization grants” to cover the loss. Now, the Finance Committee will have to make an estimate on how much those will cost.

That puts the matter before Finance Chairman Neal Kurk, R-Weare, a fiscal hawk who has been known to sink or recraft bills that don’t pass financial muster. Kurk declined to comment on his thoughts on the present state of the bill; he’s working with the Legislative Budget Assistant to produce cost estimates ahead of Tuesday’s hearing.

But Rep. Rick Ladd, chairman of the Education Committee, said that determining that cost is going to involve the same guesswork as before.

“They’re going to run into the same walls – okay, how many kids are going to participate,” Ladd said. “There’s going to be an estimate or approximation.”

At the heart of the problem is a gap in available information. Because the categories of eligibility are so diverse, it’s hard to nail down how many kids are eligible for the savings accounts, let alone how many would actually use them. There are some categories that are unknowable: For one, how do legislators measure how many students might be rejected from charter schools in a given year?

And there are other categories for which the data comes up short. New Hampshire keeps records on the number of students participating in the free and reduced lunch program – everyone up to 185 percent of the poverty line – but no available figures on the number of families between 185 and 300 percent. Without a state income tax, the ultimate number may prove elusive, Ladd said; estimates on the full 300 percent must instead come from imprecise projections of scale.

Organizations on both sides of the debate have done their best to draw up best and worst case scenarios. Some have looked to other states for examples. In December, drawing on the results for a similar program in Florida, the Josiah Bartlett Center, a right-leaning think tank supporting the bill, settled on a benchmark estimate of one percent: Around one percent of all New Hampshire students are likely to be eligible for and use the grants, the center found. Under that projection, stabilization grants necessary to fund the bill would cost $1.3 million a year.

If five percent of students used the program, the organization determined, the per-year cost to the state would be $6.7 million.

Reaching Higher New Hampshire, a public schools advocacy group, used a different baseline percentage for how many students might use the program: three percent, which it says models the system in Indiana. The average per-year cost at that rate would be $6.2 million, the group found.

Dan Vallone, policy director at Reaching Higher, cautioned on the accuracy of the figures from his organization or the Bartlett Center – without data and given the broad language governing eligibility, it is hard to know for sure, he said.

Meanwhile, it is unclear what, if any, limit Kurk will impose on the bill’s price tag before it’s passed back to the House. But if money does become a problem, Ladd and other supporters have suggested several policy changes to bring the cost down. The Finance Committee could reduce the poverty level eligibility down from 300 percent, Ladd said.

It could require kindergartners and first graders to spend a year in public school before withdrawing, which would allow the schools to determine if they need Individualized Educational Plans for special needs – another cost variable that would affect the size of the stabilization grants.

Or, said Drew Cline, interim president of the Bartlett Center, the committee could raise the bar for how many students may leave a school before the stabilization grants are triggered at all – from 0.25 percent to, say, two or three percent. That way the state may not need to pay out to as many schools as under the present language, he said.

“It’s just going to take a little bit more discussion,” Ladd said. “We may make a few policy decisions in order to achieve the finance (goal).”

Of course, there’s a balancing act. Any significant changes to the stabilization grants could threaten the support of moderate Republicans, some of whom were convinced to vote yes at the House Education Committee vote only when the grants were finally added.

For his part, though, Gov. Chris Sununu says he doesn’t think there’s much to worry about.

“I don’t think any state has ever seen anything even close to five percent, so it’s actually quite easy to predict,” he said last week. “You’re looking at a fraction of a percent likely – it could come up to one or two percent.”

But, he continued, “It’s a minimal impact to the budget with huge potential impacts to these individual lives. The doors you open up: That’s really what this is about.”

Perhaps the quibbling will be ultimately moot: With years of effort and a broad swathe of support from House Republicans, passage of SB 193 is likely a done deal. But exactly what the bill looks like when Neal Kurk is done with it is going to come down to the estimates.