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We understand that the House Finance Committee is likely to amend SB 193 to limit the bill’s impact on the state budget. One result will be that local property tax payers will bear the full burden of sending students to private and home schools. The other is that New Hampshire will have begun an inevitable multi-year process of expanding a second voucher program, as is happening with the first one from 2012.
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.
The impact of SB 193 on the General Fund will, under any assumptions, larger than the Legislature will accept
Advocates for and against SB 193 will over the next weeks debate participation rates and the other assumptions that drive the financial impact of SB 193. However, our analysis is that, even under the most conservative assumptions, the impact of SB 193 on the General Fund will be so large that SB 193 will not make good on its promise to limit the damage to local school districts. In the end, school districts would be left with most of the bill.
We’ve done this analysis of the “Potential Impact of SB 193 on the New Hampshire General Fund,” assuming very low participation rates. This surely is not the last word. Various factors could change as the Finance Committee analyzes the bill in greater depth and agencies provide more data. However, the broad basics of the bill are clear from the Potential Impact spreadsheet.
If the SB 193 program started out with a 1% participation rate, less than the current waiting list for the Education Tax Credit program, and grew over 5 years to a only a 2% participation rate, less than in any of the comparison states, SB 193 would have funded almost 13,000 students and spent tens of millions of dollars from the General Fund. (more…)
Outsourcing decision making to an independent scholarship organization increases the risk to the General Fund.
It is unusual, under any circumstances, for New Hampshire to consider outsourcing the administration of a huge new program such as the ESA initiative to an outside entity, especially one about which the State has no detailed information. However, the possibility is especially concerning in the case of SB 193. (more…)
SB 193 grants concentrated in a few communities will cost New Hampshire even much more that distributing them evenly
If the ESA grants were distributed equitably throughout the state, the General Fund impact would be relatively low. But if the ESA grants are concentrated in a relatively few communities, the call on stabilization funds will be much higher. The table below shows the impact.
If the participation rate is only 1% and the grants are spread evenly to all 176 school districts throughout the State, the districts pay most of the cost out of their 1/4%. If, just for illustration purposes, the grants all went to the 5 largest high need communities in which the ETC has concentrated its work, the General Fund impact is very large, as shown in the table. (more…)
Reaching Higher NH has presented persuasive and detailed data projecting that ESA grants should not be expected to be evenly used across the State and that property poor communities to be impacted the most.
Data from the 2012 voucher program funded by tax credits (ETC program) bears that out. (more…)
Advocates on both side of the voucher issue laid out their basic financial cases yesterday before the House Finance Committee. This is just the opening salvo as the committee begins its analysis of the bill but it included unrealistic assertions by proponents that few children would actually use the generous vouchers and there would be enough extra money in the General Fund to cover any costs there might be. (Here is our assessment, “Virtually every student in New Hampshire could be eligible for a grant from the SB 193 voucher program.”)
Virtually every student in New Hampshire could be eligible for a grant from the SB 193 voucher program
At yesterday’s Finance Committee hearing on SB 193, advocates for the bill continued to quote the requirement that students’ families earn no more than 300% of poverty, or $73,600 for a family of four, as the key determinant of student eligibility for large ESA grants. However, the criteria listed on page 1 of the bill make clear that eligibility is, in fact, unlimited. Here are all the pathways the bill provides into the voucher program: (more…)