House and Senate pass bills to remove income limits on EFA program

Yahoo

14-03-2025

In her budget trailer bill, Gov. Kelly Ayotte called for removing income caps on students receiving EFAs only for students who had attended public school for at least a year. Here, Ayotte delivers her inaugural address at the State House on Jan. 9, 2025. (Photo by Ethan DeWitt/New Hampshire Bulletin)
The New Hampshire House and Senate passed two separate bills to remove income caps from the state's education freedom accounts program Thursday, heralding a shift among Republicans since the program began.
But the two chambers' bills differed in their implementation, and each included some guardrails.
In a 198-180 vote, the House passed House Bill 115, which would phase-in universal eligibility over two years. Under the bill, in the 2025-2026 school year, the income limit would be increased from the current 350 percent of the federal poverty level to 400 percent of the federal poverty level, or from $112,525 in total income for a household of four to $128,600 for that same household. Then, in the 2026-2027 school year, the program would be open to all students in the state regardless of income level.
No House Democrats voted to support HB 115; 10 House Republicans joined Democrats to oppose the bill.
And in a 16-8, party-line vote, the Senate passed Senate Bill 295, which would remove income limits immediately, but would include a 12,250-student cap on the program. That would allow the program to more than double — there were 5,321 students in the program at the start of the 2024-2025 school year — but it would also mean that applications could be limited in future years after more students signed up.
Both bills would expand the program further than what Gov. Kelly Ayotte has proposed. In her budget trailer bill, Ayotte called for removing income caps on students receiving EFAs only for students who had attended public school for at least a year. Under Ayotte's plan, families of students who had been home schooled or were already enrolled in private school would still face the 350 percent income cap.
Republicans hailed the universal eligibility bills as a logical endpoint for the education freedom account program, which began in 2021. The program currently allows income-eligible families to use the per-pupil state adequacy aid that historically had been given to public schools and apply it to private school and home-schooling expenses.
'This bill ensures children will no longer be turned away from education that best meets their needs, prioritizing students over systems,' said Rep. Valerie McDonnell, a Salem Republican.
But Democrats, who have long opposed the EFA program, warned that removing the income eligibility caps would require the state to spend much more on the program, and draw more from the state's Education Trust Fund. The state is expected to pay about $27.7 million for the current school year; Democrats said that annual amount could rise by an additional $60 million under the House's bill if every student currently attending private school or home school took an EFA. The Trust Fund spends about $1.2 billion per year on education, largely toward public schools.
'I think it's really, really high time that elected representatives, elected legislators get real about the cost associated with this and what impact it has, not only on the state budget and the state state resources, but also on their school districts that are vastly underfunded by the state,' said Rep. Dave Luneau, a Hopkinton Democrat, at a press conference Thursday shortly after the vote on HB 115.
It is unclear how Ayotte and Republican lawmakers plan to reconcile their different proposals for expansion. Asked in February whether she would support universal education freedom accounts, Ayotte said she supports the concept but believes the state should take a more incremental approach to get there, noting the underperformance of the state's business taxes in recent months. Ayotte's own, more limited expansion proposal would not take effect until the second year of the two-year budget, July 2026, a date that aligns with the governor's projections that business taxes will rebound.
HB 115 and SB 295 are heading next to the House Finance Committee and Senate Finance Committee, respectively, and must both pass the Senate and House again. And either bill could be added to the state budget, which the House Finance Committee is currently reviewing.
For Republicans in the Senate, Thursday's vote represented a change from previous years. In 2024, the Senate rejected a bill by the House that would have raised the income eligibility from 350 percent to 500 percent; some Republican senators worried about the impact on the state's Education Trust Fund and asked to compromise at 400 percent.
On Thursday, Republican senators also voted down a number of attempts by Democrats to impose more oversight and stricter income reviews over the EFA program. One Democratic bill would have required families to prove their income eligibility every year in order to qualify for the EFAs. Currently, families need to do so only in the first year and may continue receiving EFA funds until that child graduates, even if their household income later increases beyond the limit.
Another would have required the Department of Education to administer the program, rather than the Children's Scholarship Fund, the nonprofit group that currently contracts with the state to do so.
Democrats said the measures would keep the program in check and target the funding to families who needed the funds. Sen. Tim Lang, a Sanbornton Republican, disagreed. 'These bills threaten to cripple the EFA program with unnecessary bureaucracy and overregulation,' he said in a statement.