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The Finance Committee should recommend ITL on SB 193

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SB 193 would require local school districts to use their limited adequacy grants to subsidize home and private school costs.  The current version of the bill requires that, beyond a certain point, the State’s General Fund would reimburse the the school districts for those grants, making SB 193 a substantial and growing part of the state budget.

There are many fundamental policy problems with the bill, but here are some of the fiscal issues the Finance Committee should consider in its current analysis:

  • Virtually every student in New Hampshire could be eligible. There is no statewide cap on the number of students who could participate and, in reality, there is no income or any other practical limit on student eligibility.
  • Grants could average $5,000 or more. The grants for both school tuition and homeschooling are large.
  • Participation rates will be far higher than supporters assert. Florida: 5.2%. Arizona: 6.8%. Indiana: 7.34%. Wisconsin: 8.4%. The lack of meaningful eligibility limits and the large size of the grants makes supporters’ 1-2% prediction unrealistic.
  • Grants would probably be concentrated in a few communities. Grant distribution will not be controlled by the State but by an independent scholarship organization and would probably be concentrated in a few communities.
  • Concentrating the grants in a few communities would further increase the claim on the General Fund. Concentration would drive the General Fund exposure up even more because, instead of going to many districts with budget impacts below 1/4%, there would be fewer districts and they would have larger budget impacts and larger claims on the stabilization fund.
  • Outsourcing the decision making to a scholarship organization increases the risk to the General Fund. The state would send tens of millions of dollars to an organization no one knows anything about.
  • The impact of SB 193 on New Hampshire public education would be large.  We present our analysis of the numbers, based on all these factors, and show that it is not possible for the Legislature to protect both the school districts and the General Fund from the damaging impact of SB 193

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