Today’s Strafford County Superior Court decision declared unconstitutional the provisions of voucher tax credit law that fund religious schools.  That portion of the program will have to shut down immediately.  The program will, however, still be able to provide funding to secular private schools, out-of-district public schools and home schools.  However, 70% of the students must come directly from public schools and very voucher few applicants do.

The court decision confirmed that the law did, indeed, divert tax payments to religious schools.  Addressing our key contention that granting tax credits in return for donations amounted to the expenditure of public funds, the Court said:

“The phrases ‘public funds,’ or ‘money raised by taxation,’ focuses the Court’s inquiry not on when the government’s technical ‘ownership’ of funds or monies arises, but on when, or at what point, the public’s interest fairly arises in how funds or monies are spent. The Court concludes that the interest of New Hampshire taxpayers in regard to challenging the legality of legislation such as the program at bar does not arise only after money is deposited in the New Hampshire treasury….

“….A taxpayer’s interest is also not dependent on the number of hands the money passes through. A taxpayer’s concern arises when a large portion of the donated funds are, as here, realized very much through a tax credit….

“This Court concludes that the program uses “public funds,” or “money raised by taxation,” and thus the program implicates Part I, Article 6, and Part II, Article 83. The New Hampshire tax code is the avenue used for producing and directing much money into the program. Contrary to the State’s assertion that “the government has not set aside revenue for a specific purpose,” see State’s Trial Mem. 17, it appears to the Court that is indeed exactly what the legislature has done. Money that would otherwise be flowing to the government is diverted for the very specific purpose of providing scholarships to students.”

Finally, the Court granted an injunction prohibiting the State from paying religious schools with these tax credit funded donations, saying:

“The plaintiffs’ request for injunctive relief is GRANTED to the extent that, effective immediately, the State and all those involved with the program’s realization and implementation are enjoined from proceeding to allow scholarships, as well as any associated tax credits, to be approved, granted, or applied, or in any way further carried forth or realized, in regard to, or toward, or covering educational expenses of “schools or institutions of any religious sect or denomination” within the meaning of Part II, Article 83.”

Supporters of the voucher program will probably appeal this ruling to the New Hampshire Supreme Court.  As you will see, the opinion is well reasoned and should stand up well to Supreme Court scrutiny.  If the decision is appealed, there is no way to know when the Supreme Court would rule.