By GARRY RAYNO, InDepthNH.org

CONCORD — House and Senate negotiators reached agreement on expanding the Education Freedom Account program that would increase the income threshold for a family of four by $23,400 beginning next school year.

The sides failed in two days of negotiating to reach agreement until the Senate increased its income threshold from 400 to 425 percent of the federal poverty level, still short of the House’s version at 500 percent.

The House’s version of House Bill 1665 passed by one vote, meaning its passage next week is not a sure thing.

The Senate agreed to drop a provision that would have the state pay school districts about $660 per class for an EFA student after the House complained it was “double dipping” as an EFA student’s parents would also have to reimburse the public school for the class from the EFA grant.

The remainder of the bill would reduce the percentage the Children’s Scholarship Fund NH would receive for administering the program from 10 to 8 percent and continue the phaseout program for public schools that lose students to the EFA program for three more years and requires the Department of Education to track those payments and report to the legislature where the money went.

The House and Senate came to quick agreement Thursday morning —the last day to negotiate different versions of bills — on the proposed changes presented by Sen. Timothy Lang, R-Sanbornton. 

The House rejected a proposal to eliminate the payment to public schools for EFA students attending a class at the public schools and shortening the phaseout grants to public schools to two years Wednesday. The agreement retains the three-year extension of the phaseout program.

Last month, the House killed the Senate’s EFA expansion bill, Senate Bill 442, but the Senate replaced the content of the House’s plan with the content of its bill.

The Senate approved bill lowers the eligibility for the program from the House approved 500 percent to 400 percent of the federal poverty level, reducing the estimated increase in state costs to about $55 million from $70 million to $80 million annually.

The Department of Education estimated the change to 400 percent would increase costs by $1.56 million, but the department has significantly underestimated costs since the program began.

Senate negotiators maintained setting the threshold at 400 percent would essentially open the program to 50 percent of the families in the state to use Education Trust Fund dollars and the phaseout program should continue because of the number of new students who will leave public schools with the expanded income eligibility. The department estimates an additional 300 students will join the EFA program with the increased income threshold.

Senate negotiators rejected a House proposal at 450 percent of federal poverty level saying the Senate was taken back by the House refusing to discuss further this session the possibility of annual income verification for the program as the threshold level increases. Currently a parent only has to qualify once under the income threshold for their child to remain in the program and receive state grants until he or she leaves the program or graduates.

The EFA program provides an average per pupil grant of $5,255 to about 4,700 students this school year, up from the 1,600 students when the program began three years ago when the average grant was $4,952. 

Increasing the eligibility cap to 500 percent of the federal poverty level would cap the income of a family of four at $156,000 and $102,000 for a parent and child household based on federal 2024 figures.

The current rate of 350 percent limits income to $109,200 for a family of four and $71,540 for a family of two.

At the 400 percent threshold, a family of two would be able to earn up to $81,760 and a family of four up to $124,800.

And at 425 percent, a family of four could earn up to $133,600 annually, and a two-member family could earn up to $86,870.

The federal government estimates the median income in New Hampshire for a family of four is $133,447. 

The state money for the program comes from the Education Trust Fund, which also pays for state adequacy grants, some special education and school building aid, and other education items.

The fund currently has a surplus of about $212 million.

The controversial program was sold as an alternative for lower income parents to send their child to a more appropriate educational environment for their learning abilities other than public schools.

However, about 75 percent of the students in the program were not in public schools when they applied for the state grants and instead were in private or religious schools or in homeschooling.

The increase in eligibility has not significantly increased the number of students leaving public schools but has increased subsidies to attend private and religious schools or homeschooling programs. The majority of the EFA grant money goes to private Catholic schools as is true throughout the country where 29 states have some form of voucher programs allowing parents to use public money for alternatives to public schools, which continue to house the vast majority of school-age students.

States that have no eligibility cap have seen the program explode with non-public school students seeking grants that have nearly bankrupted Arizona and put Ohio public schools in peril.

When the program was first proposed in New Hampshire there was no income cap, but when the program was first approved as part of the 2021-2022 biennial budget it included a 300 percent poverty limit, which was raised to 350 percent for the current school year.

Critics of the program say it lacks academic accountability and financial transparency with the Children’s Scholarship Fund based in New York City so financial reporting is for the entire organization not what is spent on the New Hampshire program.

However, the majority of Legislature has refused to approve major changes to the program beyond increasing the income eligibility.

Garry Rayno may be reached at garry.rayno@yahoo.com.