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Fiscal magic: how private donations to private schools save state government money

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I gave a presentation to a committee of the New Hampshire Business and Industry Association (BIA) about voucher repeal yesterday and Charlie Arlinghaus of the Bartlett Center preceded me with a talk about the state budget.  He took the opportunity, since he had the floor, to defend the voucher tax credit program.  His argument was that the tax credit program actually saves the State money – a few hundred thousand dollars per year.   Voucher advocates seem to have decided to bring this this point to the fore as a key selling point.

It’s an interesting point because while the savings are minor, the point itself highlights the essence of the voucher program.  The savings come because, for each child who leaves the public school system, the State provides a tax credit funded voucher averaging $2,500 to a private school instead of an adequacy grant averaging $4,200 to a public school.  Advocates making this argument are saying, “Privatize education – it’s cheaper than paying for public education.”  So, while the cover story is school choice for poor kids, this is as close as voucher supporters get to the real point of this whole exercise, privatizing public education.

The pitch goes on to assert that these State-funded private schools should not be accountable because they are, after all, private.  The result though, is that some number of the kids – a large number in other states using education tax credits – will go to small, unaccredited Christian schools teaching that dinosaurs and people were created on the sixth day.  Is that really a legitimate use for public money or a substitute for our public education system?  I would argue that disinvestment in public education is not a good way to provide an adequate education to every child as the New Hampshire Constitution requires.

Voucher advocates go on to say that it’s really all private money going to the private schools.  “Because the courts have said so.”  That always reminds me of that great Groucho Marks quote, “Who are you going to believe, me or your lying eyes?”  The courts may treat the almost dollar-for-dollar tax credit the business gets in return for the voucher donation as a separate issue for some legal purposes, but voters can still see it there.  I’d say anything the Legislature has to account for in the State’s general fund is public money.

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