Town in N.H. Grants Property-Tax Break As Choice Incentive
A town in New Hampshire has become the latest battleground in the conflict over school choice since town officials last month authorized tax abatements for property owners who sponsor a high-school student's private education.
Although the property-tax abatement policy enacted by the selectmen of Epsom embodies elements of a Minnesota law, the form it takes apparently makes it the first of its kind in the nation.
"This is a new twist," said Mary Fulton, a research analyst for the Education Commission of the States. "I don't really think there is anything like that."
Advocates of school choice are eyeing the Epsom development as a prime move in their effort to bring more competitiveness to the educational marketplace. "Even though it's a tiny town and a modest-size program, it could have gargantuan ramifications," said Clint Bolick, director of the conservative, Washington-based Landmark Legal Foundation.
"It can apply anywhere property taxes provide a significant degree of education financing. Epsom is the ideal starting place," said Mr. Bolick, whose organization has pledged to represent the selectmen in any resulting legal action.
Observers, in fact, see New Hampshire as fertile ground for this kind of initiative. The state contributes less than 10 percent of education funding, by far the lowest share of any state.
Consequently, residents of wealthy communities can end up with relatively modest tax bills and healthy school budgets, while lower- and middle-income communities are often strapped to fund their schools.
"The 8 percent [state] contribution obviously limits the authority of the state to compel local districts to adopt certain practices," said Charles H. Marston, the state commissioner of education. "The choice issue is going to play out here in New Hampshire in some way."
A rural community of some 4,500, Epsom is located 15 miles east of Concord. The average property-tax bill is $2,500. Because it sends its secondary students to a public high school in a neighboring community, proponents of the tax abatement had an easier case to make than if they had included in their plan students who attend the town's elementary school.
"I didn't want to muddy the waters with issues I didn't have to raise," said Jack Kelleher, the plan's prime architect and a former selectman.
Under the plan, property owners in Epsom can have their property taxes cut by as much as $1,000 if they pay at least a portion of a high-school student's tuition at a private school--secular or religious.
At $1,000, the abatement is approximately half of the tuition at nearby parochial schools, according to Mr. Kelleher.
A property owner cannot break even or receive a rebate as a result of the initiative. If an owner's tax liability is $1,000, for example, he or she could realize a maximum abatement of 85 percent, or $850.
The student need not be the property owner's child. Businesses, neighbors, or even strangers can earn the abatement as long as they produce a receipt from the school.
The abatement was not intended as "a proposal for parents but for students and taxpayers," said Mr. Kelleher. "Every student will have to find his own sponsor."
Mr. Kelleher initially raised the issue in the early 1980's, but it was only in March 1988 that voters approved the concept. Mr. Kelleher then consulted several state agencies to get their blessing, although he did not consult the education department, and the attorney general's office refused to issue an opinion. The abatement scheme was selected, he said, because state law gives local selectmen the latitude to abate taxes on all sorts of matters.
Finally, Mr. Kelleher spent 10 months in search of legal backing before the selectmen enacted the abatement on Dec. 10 and made it effective immediately.
He contends that the abatement will save the town money on several fronts as well as offer children a choice of opportunities. Within the vicinity are a parochial school, a Christian school, and a private academy.
Epsom sends 180 secondary students to Pembroke Academy, a public school in a neighboring community, at a cost of $4,600 per pupil. Fourteen secondary students from Epsom attend area private schools; nine of them are enrolled in religious schools. Parents of at least 13 students have already applied for an abatement.
With the abatement, every public secondary student who transfers to a private school will save Epsom $3,600, according to Mr. Kelleher.
Not so, said Paul DeMinico, the superintendent of schools for both Epsom and Pembroke, who noted that an exodus of students from the Pembroke school might force it to increase the tuition it charges Epsom for each student. Taxpayers in Pembroke, as well as in three other communities that send their children to Pembroke, might also be affected, he said.
"There are still fixed operating costs," Mr. DeMinico said. If 25 students leave, all of them will not be from the sophomore chemistry class, for example, so a chemistry teacher cannot be fired. "There is not a dollar-for-dollar savings," he said.
School funding has traditionally been a problem for Epsom, according to Dianna M. Parichand, a school-board member. Last year, voters rejected funding a kindergarten class.
Financing has in large measure encumbered the school board from taking an official position on the tax-abatement program. "To have one town agency go after another town agency in a town [the size of] Epsom would have just sent the tax rate soaring," said Ms. Parichand.
"Personally, I feel that public education is a valuable resource, and they are undermining that resource by giving such an abatement," she said. "I think this could be the beginning of the end for public education. If, in fact, this does go through, I just see it mushrooming."
Although Commissioner Marston said his department would not mount a challenge, the abatement plan is likely to spawn a multitude of lawsuits. At least one Epsom parent said she intended to challenge the policy. Other groups considering lawsuits are the New Hampshire Civil Liberties Union, the NEA-New Hampshire, and the New Hampshire School Boards Association.
Epsom is relying on a 1983 U.S. Supreme Court decision, Mueller v. Allen, to pass Constitutional muster. In that case, the court upheld a Minnesota statute allowing taxpayers a $750 income-tax deduction for tuition, textbook, and transportation expenses incurred in sending their children to public or private schools.
The state National Education Association affiliate will be involved in this "fray in some significant way," said Fred Place, president of the union. "We view it, obviously, as taking educational funding and diverting it from the public sector to the private sector," he said.
Barbara Barksdale, who has three children in Epsom's elementary school and a fourth starting next year, said she spent the holidays talking with lawyers.
"I would love to see more choice in education, but in public education," said Ms. Barksdale who opposes the abatement on Constitutional, philosophical, and equity grounds.
Not only does the abatement fail to differentiate between secular and religious schools, it also discriminates against families who cannot afford to send their children to private schools, she argues.
Moreover, Ms. Barksdale is concerned that the initiative will further undermine the public-school system. "Caring for your own child's education is wonderful, but it's not enough," she said. "The kid you don't educate today is going to be your welfare client 10 years from now, your prison inmate 10 years from now."
"The very same people that [say they want to] advance the quality of education," she said, "were the same people who vociferously and vigorously opposed kindergarten, which I thought was a delicious irony.''
Should the Epsom program survive challenge, similar efforts could spread throughout the state. Like Epsom, roughly half of the communities in New Hampshire do not maintain their own high schools, according to Commissioner Marston.
In fact, residents of a second community, Barrington, have already asked their selectmen to enact similar legislation.
Given the burden placed on local property taxes, Mr. Marston said he does not oppose the idea of some sort of tax abatement, but he hopes other questions are also addressed.
"The financial issue is not the only issue or the most important issue," he said. "The bottom line is whether it's in the best interest of the children. I don't hear much said about how this will affect the children."