By GARRY RAYNO, Distant Dome
While members of the Joint Legislative Fiscal Committee want quarterly reports on the state of the state’s finances to avoid another $90 million withdrawal from the rainy day fund to cover last fiscal year’s deficit, one area you can be assured that will not receive any scrutiny is the Education Freedom Account program.
Lawmakers and Republican Gov. Kelly Ayotte agreed to remove the salary cap from the program beginning July 1 as a provision in the state’s biennium budget package that barely made it through the House in June.
Removing the salary cap, which was 350 percent of the federal poverty level or $74,025 for a family of two or $6,170 a month, and $112,525 for a family of four, or $9,379 a month, doubled the number of children in the program for the first year of subsidies for the well to do.
Advocates for opening the program to anyone in the state regardless of family income, agreed to a 10,000 cap on participants which the program hit, and now has a waiting list.
The cap expands automatically next year to 12,500 students because it reached its limit this school year.
Lawmakers appropriated $39 million for the program for the 2026 fiscal year based on estimates from NH State School Board Chair Drew Cline, who is also the president of the Josiah Bartlett Center for Public Policy, which is a member of the Koch Foundation’s State Policy Network.
According to figures released recently by the Department of Education, the parents of the 10,000 students in the program will receive $48 million in grants. That figure includes the 10 percent administrative costs collected by the Children’s Scholarship Fund of NH for administering the program.
The average grant this school year is about $4,800 per student down from $5,200 per student for the 2024-2025 school year.
If you use the $4,800 per student figure for 12,500 students next school year that is about $60 million for the second year of the biennium when $47 million was budgeted or $108 million over the biennium when $86 million was budgeted.
The money comes from the Education Trust Fund which also pays for the per student adequacy grants to school districts and charter schools.
The fund had a $117 million surplus at the end of the last biennium but lawmakers changed the formula for splitting revenues between the education fund and the general fund so less money will flow to the education trust fund this biennium.
The DOE figures also indicate the EFA program does not reflect the same diversity as public schools.
Of the 10,000 students, 1,490 are eligible for additional money as are students in public schools because they qualify for the free and reduced lunch program, and the 777 students who are eligible for special education services and additional money as well.
The figures indicate that children from low-income families represent 15 percent of the students in the program which was sold as an opportunity for low-income parents to find educational alternatives if their child did not do well in the public school environment.
In public schools, the number of children from low-income families is 24 percent.
Students eligible for special education services, although there is nothing in the program requiring an alternative educational setting to provide those services, represent 7.8 percent, while in public schools, about 20 percent of children qualify.
In the insurance industry these numbers for the program would indicate cherry picking or serving the students who are the least costly to educate.
To date the vast majority of the state grants under the EFA program are for tuition reimbursement to religious and private schools as well as home schooling, with about 80 percent in religious and private schools, and homeschooling when they joined the program and not refugees from the public school system, and if you judge from transition grants to public schools it would be less than 10 percent.
Opponents to expanding the program to universal vouchers, which is what was approved this spring, said it would send state tax money to wealthy parents to subsidize their tuition payments while lawmakers nearly eliminated state support for the arts, began charging low-income parents health care premiums and copays, and slashed state aid to the University System of New Hampshire increasing tuition for in-state students.
The Department of Education information on this year’s enrollment also tends to back up the claim that the money would go to wealthy parents instead of poor families trying to help their children who may have been bullied or don’t perform well in public schools.
The number of EFA students in some of the wealthiest communities in the state greatly increased this year compared to last year including Bedford, where the EFA students went from 39 to 152, Bow from 33 to 73, Rye from one to 20, Hanover from 3 to 18, Newfields from 3 to 20 and Windham from 13 to 70.
However, poorer communities with a large number of students on the free and reduced lunch program did not see large increases, such as Berlin, 61 to 76, Newport, remained at 66, Claremont from 77 to 84, Franklin 64 to 87, and Pittsfield 23 to 38, while Colebrook decreased from nine to six.
Using figures from the state’s 13 cities which have a more diverse population in larger numbers than the towns in the state, the number of EFA students increased from 1,922 last school year to 3,123 or an increase of 1,202 students which represents a 62.5 percent increase.
The cities are also more likely to have more alternatives for parents than are small rural towns in the north and western parts of New Hampshire.
However, if you take four of the more wealthy cities — Portsmouth, Dover, Concord and Lebanon — out of the city numbers, the EFA students increase from 1,628 to 2,490 or 53 percent.
In Dover for example, EFA students increased from 93 last school year to 233 and in Portsmouth, the increase was from 24 to 77.
Those figures are more in line with eight wealthy “suburbs” — Amherst, Bedford, Bow, Gilford, Hanover, Hopkinton, Rye and Windham — where there is a remarkable difference compared to figures from poorer communities.
Those eight communities went from 166 EFA students to 533, an increase of 357 or 221 percent.
Compare these communities with Danbury, Goshen, Milan, Newport, Pittsfield, Stratford, Unity and Whitefield which saw their EFA students increase from 136 last school year to 163 this year, an increase of 27 students or 20 percent.
This reflects what happened in Ohio and Arizona when their voucher programs removed salary caps. They experienced a significant increase in suburban parents with children in religious and private schools and homeschooling applying for state grant money, while enrollment in public schools did not decrease, and the number of inner-city parents increased only slightly.
Unfortunately the enrollment numbers for schools that just began classes at the end of August are not available from the NH Department of Education to make that comparison here, but there is little to suggest New Hampshire’s program is any different from others like Ohio’s, Arizona’s, North Carolina’s, etc.
These figures were not a surprise to one of the organizations opposing the move to vouchers without any salary cap, the National Education Association — NH.
The organization’s president Megan Tuttle said the program is taking money away from public schools that serve 90 percent of the state’s children.
“As we stated over and over throughout this legislative session, this initial data illustrates that universal vouchers benefit the wealthy at the expense of the nearly 90 percent of New Hampshire students who attend public schools,” she said. “Anti-public education politicians have made their priorities clear: they’ve opened the floodgates to taxpayer handouts to wealthy Granite Staters while telling students and families in lower-income communities, like Claremont, that they’re on their own.”
Tuttle said vouchers do not solve the decades-long problem with education funding in New Hampshire.
“We know what it takes to improve student outcomes: smaller class sizes; and more one-on-one attention; and competitive compensation packages that help recruit and retain high-quality professionals,” Tuttle said. “But educators can’t do that when the state is taking more money out of public schools to subsidize private schools. New Hampshire voters and taxpayers who overwhelmingly support their community public school must make our priorities clear by holding the politicians who refuse to fix this broken system accountable.”
Over the first two months of the new fiscal year, state revenues are $10 million less than anticipated, which projects to a $100 million revenue deficit for the 2026 fiscal year, and the $22 million deficit in the EFA program will only add to the state’s financial woes.
Garry Rayno may be reached at garry.rayno@yahoo.com.
Distant Dome by veteran journalist Garry Rayno explores a broader perspective on the State House and state happenings for InDepthNH.org. Over his three-decade career, Rayno covered the NH State House for the New Hampshire Union Leader and Foster’s Daily Democrat. During his career, his coverage spanned the news spectrum, from local planning, school and select boards, to national issues such as electric industry deregulation and Presidential primaries. Rayno lives with his wife Carolyn in New London.