U.S. Markets closed

Suit claims NH school tax credit unconstitutional

Norma Love, Associated Press

CONCORD, N.H. (AP) -- Three civil liberties groups filed a lawsuit to block Wednesday a New Hampshire law that would give businesses a tax credit for donating to scholarship organizations to send students to private or public schools.

Americans United for Separation of Church and State, the New Hampshire Civil Liberties Union and the American Civil Liberties Union sued in Strafford County Superior Court on behalf of eight plaintiffs.

They argue the tax credit program enacted last summer over former Gov. John Lynch's veto would divert taxpayer funds to religious schools in violation of the constitution.

"This is just a backdoor voucher scheme. Whether it's through a traditional voucher or a tax credit, the result is the same: taxpayers are subsidizing religious institutions," the Rev. Barry Lynn, Americans United executive director, said in a statement.

NHCLU staff attorney Barbara Keshen said the state constitution contains several provisions intended to prevent this kind of program.

"A robust respect for the separation of church and state is vital to protecting the religious freedom of all New Hampshire citizens," she said.

House Republican Leader Gene Chandler of Bartlett said the Legislature — which was controlled by Republicans when the law was enacted — did not believe it violated the state constitution.

"Now, I guess the court will decide," said Chandler of Bartlett. "It just provided more choice for students. It seemed like a good idea to give it a try."

The first year of the program started Jan. 1 and allows up to $3.4 million in tax credits in the first year and $5.1 million the second year. It provides for increases in tax credits in subsequent years. The business donations would go to organizations created to provide scholarships of up to $2,500 to eligible students. The scholarship amount would be adjusted for inflation. Students attending private schools, public schools outside the student's home district and students schooled at home would qualify for scholarships. Income limits are set on who qualifies to receive a scholarship.

Districts losing state aid above a certain threshold would receive additional money to partially offset the loss of funding when students leave their schools.

The lawsuit asks the court to declare the program unlawful and block the state from implementing it.