Gov. Kelly Ayotte signed into law an expansion to New Hampshire’s school voucher program on Tuesday that removes the income eligibility restrictions that had defined the program during its first four years.

The change will allow any family in New Hampshire to receive at least $4,265 per child next school year to spend on private school tuition or other educational expenses. Families of children with additional needs could receive up to $9,676 per year in government money.

The new law caps student enrollment in the program at 10,000 students in the first year of the expansion but paves the way for additional growth in subsequent years if enrollment in the program exceeds 90% of that cap in the prior year. The program, established in 2021, has steadily grown each year, surpassing 5,000 students last fall, according to the Department of Education.

The Education Freedom Account program was initially hailed as a way to give low- and middle-income families access to educational opportunities they couldn’t otherwise afford. Currently the program is open only to families who make less than 350 percent of the federal poverty guideline, which is $112,525 a year for a family of four.

In recent years, however, supporters of the program have widened that scope, arguing that all families regardless of income should control the government money spent on their children’s education.

“I can’t think of anything more important than making sure that every child in this state has the opportunity to reach his or her full potential in the setting that works best for them in terms of education,” Ayotte said during a signing ceremony Tuesday morning.

Eighth state with a universal program

New Hampshire will become the eighth state to roll out a fully universal education savings account program, according to the school choice advocacy organization EdChoice. Several additional states have universal voucher programs but restrict spending to private school tuition. Education savings accounts, by contrast, grant families wide latitude to spend their dollars on school supplies, extracurricular activities, and several other categories of expenses.

The bill, SB 295, passed on a party-line vote in the Senate. In the House, 14 Republicans bucked their party in opposing it. Democrats in both chambers were united in their opposition.

The expansion was hailed as a major victory by leaders in the state Republican party, who hold a trifecta in state government and made the policy change a signature issue of their legislative agenda this session.

Democrats expressed universal criticism of the expansion, which they characterized as fiscally irresponsible and damaging to state funding for public education, which is calculated on a per-pupil basis.

“This is a wildly unpopular program, and there’s nothing fiscally conservative about it at all,” said Rep. Dave Luneau, a Hopkinton Democrat and a leading opponent of EFA expansion. “It’s really a misappropriation of public tax dollars with no accountability.”

Cost is uncertain

It remains unclear how much the program, which is funded via the Educational Trust Fund, will cost. The Senate budget bill has allocated $39.3 million for the upcoming school year and $47.8 million for the following year, which surpassed allocations by Ayotte and the House. This school year, the program cost $27.7 million.

If the program is fully enrolled for the upcoming year, the cost will significantly exceed even the Senate allocation. Families received an average of $5,204 per student this year. Ten thousand students at that rate would amount to a cost of $52 million.

Public schools that lose students to the program also lose the adequacy payments they would receive, which is equal to the amount that families get.

Megan Tuttle, the president of the largest teachers’ union in New Hampshire, said the expansion will “exacerbate the already inequitable public education funding system” in the state.

The biggest beneficiaries of the expansion will likely be religiously affiliated schools and the students who currently attend them, previous reporting by the Concord Monitor has found. In 2022-23, the most recent year for which spending data is available, religiously-affiliated schools received nearly 90% of EFA funding spent on tuition, a Monitor analysis found. Since the program started, 11 of the 28 independent Christian schools in the state have either newly opened or experienced an enrollment increase of at least 50%. Several are in the process of or have recently completely renovations, school leaders said in interviews.

Kate Baker Demers, the executive director of the company the state contracts to administer the program, celebrated the expansion as “a moment of long-awaited hope for New Hampshire families.”

“It’s not just a policy change – it’s a shift in who holds the power,” she wrote in a statement.

Broader than Ayotte proposed

Ayotte championed the voucher program in her campaign for governor last fall, but the expansion she signed is even broader than the one she proposed, which would have restricted eligibility to families who either fell under the existing income threshold or who had attended public school the year before. In 2024, only 32% of newly participating students came directly from public schools, according to data from the Department of Education.

Most Republican legislators, however, balked at the public school attendance requirement, with House Education Funding Committee Chair Rick Ladd describing it as “very disruptive.”

“I had my proposal, which would have applied to public school students, but this is a very positive bill and I was glad to work with the legislature on this,” Ayotte said Tuesday.

Jeremy Margolis can be contacted at jmargolis@cmonitor.com.