HB 1512

Committee — INEXPEDIENT TO LEGISLATE

Rep. Marie Louise Bjelobrk

This bill proposes to amend RSA 194-F by adding a new section that allows any municipality, city, town or village to hold a referendum on whether its residents can participate in the Education Freedom Account (EFA) program. The EFA program was signed into law in June of 2021 when the state legislature passed it as part of the biennial budget in HB 2. Though it started with modest enrollment, the program funding grew to $27.7 million annually by 2025. The EFA program allows for state tax dollars to be used as payment for private schooling, home schooling, or other educational expenses when a parent decides to choose an alternate educational path than that provided by their local public school. Parents and guardians were permitted to pursue the most suitable learning environment for their children. Once a parent decides to transfer their child from a public school to an alternate learning environment, their local tax dollars are left behind for a specified time with the public school even though the child is no longer in attendance. This is due to a provision in the current RSA that leaves local monies behind via phase-out grants to each specific public school so school administrators can adjust their budgets over time and ease the transition. The bill’s sponsor testified that the EFA program creates an unfunded mandate on local school districts because these schools lose state aid when students leave public school for another method of learning. The public school continues to have “fixed costs” despite a decrease in enrollment. Declining enrollment as a result of this program leads to higher property taxes for remaining residents due to the phase-out grant. The “opt-out” mechanism that this bill provides is stated to “restore local control” by preventing participation in the statewide program. The Director of Policy and Compliance at the Children’s Scholarship Fund testified against this bill, stating there could be severe issues regarding equal protection that would arise should this bill pass. The bill would treat similarly situated students differently based solely on municipality and residence. There is also improper delegation of legislative authority giving municipalities the authority to accept or nullify statewide eligibility criteria for the EFA program. Additionally, the use of local referenda to extinguish statutory eligibility for children is problematic, allowing local majorities to block access to a state level benefit for students in that municipality. This bill, while stating it fixes a constitutional problem with the EFA program, actually violates the New Hampshire Constitution on equal protection grounds. Equal protection principles under Part I, Articles 1 and 2 of the NH Constitution emphasize that all persons are born equally free and independent with inherent rights. Article 12 requires reciprocal protection under the law. NH courts have interpreted these provisions as protection against arbitrary discrimination in the application of state laws or benefits. Allowing local “opt-outs” could be seen as creating unequal classes of citizens. Broader legal issues could arise should a student that has already received funds be “opted-out” mid school year, potentially implicating protection provided by Part I, Article 14. Lastly, no other state program permits local governments to revoke universal eligibility. This raises potential legal questions, and potential lawsuits, with regard to state authority and uniformity in education policy protected under Part II, Article 83 of the NH Constitution. Vote 17-0.