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June 27, 2013

On June 17, 2013, in Duncan v. New Hampshire, a New Hampshire Superior Court declared that the state's new Education Tax Credit program violates the state constitution because it would send public funds to religious schools. The state has said it will appeal. The court upheld the use of vouchers for private, nonsectarian schools and for home schooling.

The court stated that New Hampshire students and parents have the right to choose a religious education. "However, the government is under no obligation to fund 'religious' education. Indeed, the government is expressly forbidden from doing so by the very language of the New Hampshire Constitution," the court added.

Article 83 of the New Hampshire Constitution states that, "no money raised by taxation shall ever be granted or applied for the use of the schools of institutions of any religious sect or denomination." And Article 6 says, " ... no person shall ever be compelled to pay towards the support of the schools of any sect or denomination."

The American Civil Liberties Union (ACLU), the New Hampshire Civil Liberties Union (NHCLU), and Americans United for Separation of Church and State served as counsel for the eight taxpayer plaintiffs who asserted that the education tax credit program would primarily benefit religious schools and allow those schools to use taxpayer funds for religious instruction and discrimination.

NHCLU's Barbara Keshen said: "We believe that everyone has the right to practice according to his or her own religious beliefs, but taxpayers should not bear the expense of educating school children about religious beliefs that they don't share. This is a core constitutional principle that the Court has upheld today."

The primary argument before the court was a "public funds" dispute, that is, whether the voucher funding is "money raised by taxation." The voucher law gives businesses an 85% tax credit for funds sent to a new set of entities called "scholarship organizations." These organizations are authorized to receive these business "donations" and award "scholarships" to K-12 students to attend non-public schools or public schools outside of their districts or for home schooling. The law would allow this money to flow to religious institutions, which constitute a significant portion of the non-public schools in the state.

As reported in the Concord Monitor, the court found the program uses public funds, even if funding does not go through the state government. Money that would have flowed to the government is, instead, diverted.

"A taxpayer's interest is . . . 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," the court wrote. Thus, "the program has been shown to have 'money raised by taxation' inevitably go toward educational expenses at nonpublic 'religious' schools without restriction regarding how the money may be used," and so violates the Constitution, the court explained.

Moreover, as one of plaintiffs' experts reported to the court, tax credits serve "the same functions as direct governmental spending" and have been recognized as equivalent to direct appropriations "by public finance economists and analysts for at least half a century."

New Hampshire supporters of vouchers for religious schools argued that the tax credit program was designed to avoid the state constitution's restriction. This strategy worked in Arizona, where a divided court held that the funding was not public because it did not reach the state treasury. The New Hampshire court distinguished that ruling and quoted the Arizona dissent, which concluded that the voucher program "is a direct government subsidy limited to supporting the very causes the state's constitution forbids the government to support."

Derrick Black reported on this ruling in a June 18 post on the Education Law Prof Blog, where he covers a wide range of issues and developments in education law. Please visit this informative blog.

Education Justice Press Contact:
Molly A. Hunter, Esq.
Director, Education Justice
email: mhunter@edlawcenter.org
voice: 973 624-1815 x19

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