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Consensus on the voucher tax credit: “It looks like it’s going to die on the vine.”

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New Hampshire’s voucher tax credit program has been notable for the paucity and inconsistency of the Information available. The single active scholarship organization, NEO, has released no information about its program other than periodic responses to reporters’ questions. But we did learn this week, in a very odd way, how much money NEO has given out.

At the request of the Nashua Telegraph, I provided an opinion piece describing how NEO was misusing the voucher program. Based on this NHPR report, followed by this Concord Monitor report, I said that NEO would giving out $235,000. In response, NEO told the Telegraph – the first time NEO had said this publicly – that it has awarded only $129,000 in scholarships. Based on this new information, the Telegraph issued a correction.

So now the public knows two things about the voucher program as NEO is administering it. In response to our right-to-know request, NHDOE said that NEO anticipated awarding scholarships to up to 15 students leaving public schools. And, via that obscure Nashua Telegraph correction, we now know that NEO has awarded $129,000 in scholarships.

If so, NEO has not followed the voucher law. If NEO did indeed give scholarships to 15 students leaving public schools, the program could award no more than 21 total scholarships. And a program with just 21 students could award only about $52,500, less than half of what NEO says it has awarded.

When I filed a complaint about this with the New Hampshire Department of Revenue Administration, DRA Commissioner John Beardmore’s response highlighted a fundamental flaw in the legislation. He said that he could take no action to enforce the law until NEO files its scholarship organization report on December 1, after the program is over and the money is spent for this year.

So we have a voucher tax credit law, written by freshman legislators who are no longer there, that turns out to provide no mechanism to ensure that the participants follow the rules as they give away business donations subsidized by state tax credits. And, according to the State, there’s really not much to be done about it.

After reviewing NEO’s report at the end of the year, DRA will have the option of not renewing NEO’s authorization to serve as a scholarship organization next year and that is clearly one step that should happen. But there appears at this point to be little else to be done, even though NEO’s error will cost the State money (a very small amount, at this point, because the program is so small…but if the program operated at the authorized scale, the loss could be in the millions).

Based on a number of conversations about all this with legislators, there appears to be no appetite for fixing the program or trying again to repeal it. The program is so complex and riddled with problems that any attempt to fix it would require a huge legislative effort, probably from Sen. Stiles, who has emerged as the program’s main protector. But the sentiment you hear most often is, “It’s so small and lacking in support, it’s not worth the trouble. It’ll just die on the vine.”

In any case, legislative leadership would probably not want to work on any of this before the New Hampshire Supreme Court rules on the many pending appeals. A ruling might not come until the spring.

In the mean time, there will be plenty of knots to untangle. DRA should be able to issue guidance on the 70% issue since, after all, the intention of the legislation is not really in doubt. And the December 1 scholarship organization report will provide the Legislature and the public its first real information about what the voucher tax credit program has been doing all these months.

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