Senate Minority Leader Donna Soucy, D-Manchester.

CONCORD — What has been called the most expansive school voucher program in the country was included in the Senate’s proposed operating budget by the GOP controlled Senate Finance Committee Wednesday.

The controversial program would allow parents to receive the equivalent of their student’s basic state adequacy aid grant for an education program of their choice, including homeschooling and religious schools.

The committee also decided to reinstate the municipal revenue sharing program, but at a lower level than in previous years before it was suspended during the great recession, and to include an abortion ban after 24 weeks of pregnancy but removing the House’s restrictions essentially prohibiting Planned Parenthood and other abortion providers from offering family planning and other health care programs.

The committee removed the “divisive concepts” provision the House included in House Bill 2, but did vote on a proposal based on the concept that no one is superior or inferior to anyone else and will be back Thursday morning to decide what to do.

The committee also removed a House provision that established a commission to study the merger of the University System of New Hampshire with the Community College System of New Hampshire but left the remainder of the House’s changes to Gov. Chris Sununu’s merger proposal intact.

The committee also decided to add $20 million more for nursing homes with the cost split between the state and federal governments and not counties.

The Republican majority on the committee, also beat back Democrats’ attempts to remove tax rate cuts for business and rooms and meals taxes, and to reduce and phase out the interest and dividends tax.

The committee did approve a 1.6 percent pay raise for the next two years for all state employees and $30 million for a new forensic hospital on New Hampshire Hospital grounds.

The committee also approved some pet projects for committee members including removing the Exit 10 tolls in Merrimack and $3.2 million to upgrade Calef Road in Tilton leading to the Veterans Home.

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Vouchers

The committee voted 5-2 down party lines to include the content of Senate Bill 130 in House Bill 2, the budget trailer bill.

Thousands of people attended the virtual public hearing on the bill, with a vast majority opposing it.

They called it the most expansive educational choice program in the country and the most lax with little accountability or transparency.

Supporters said the pandemic has heightened awareness that every child learns differently and needs options and choices to reach their full potential.

They said the program would not only help students it would save state taxpayers hundreds of millions of dollars, although opponents claimed it would cost the state that much money.

Senate Minority Leader Donna Soucy, D-Manchester, questioned the department’s estimate of the program’s cost. The department believes few students will use the program in the first year, but then nearly 700 would in the second year, estimating $3.2 million will come from the Education Trust Fund for the biennium.

She also questioned a provision waiving income eligibility requirements once a student qualifies for the program. If the parents win the lottery after the first year, they would qualify, she said.

The bill’s prime sponsor Senate Majority Leader Jeb Bradley, R-Wolfeboro, said that is true and the provision is based on the tax credit scholarship program,

After the vote, Soucy said instead of trying to fix the current education funding system, they are taking money away and raising property taxes.

“This shift of public tax dollars out of our public school systems in order to benefit a small population will do nothing but impose further financial hardship on our public school system,” Soucy said. “The original language of SB 130 came in under the guise of helping families at or below the poverty level. Today’s amendment to that language continues the Republican agenda of delivering handouts to the wealthy while leaving the average Granite Stater behind.”

Bradley praised the committee for including the program in the budget.

“EFA’s (education freedom accounts) allow state education adequacy grants to follow the student, giving parents the ability to seek out the best educational path for their child,” he said. “The reality is the vast majority of parents will continue to send their children to their local public school, but for those parents who want a choice, EFA’s give them that option, especially if they are from lower income households.”

The House had a nearly identical bill, but the House Education Committee decided to hold the bill for a year to try to improve some of the flaws.

Under the bill, a parent seeking to establish an account, would receive between $4,500 to $8,500 per pupil to spend on tuition to any private, religious or alternative school and on other related educational costs including home schooling, computers, books etc.

The student’s parents would receive the basic state adequacy grant of about $3,700 as well as additional money if the student qualified for free or reduced lunches, special education services, English as a Second Language instruction, or failed to reach English proficiency.

The average grant is estimated to be $4,600.

The program is open to the parents of a student in public –traditional and charter — private or religious school, home schooling or other alternative educational programs.

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Revenue Sharing

The committee voted unanimously to reestablish revenue sharing of rooms and meals tax receipts with cities and towns, which was suspended about a decade ago.

Under the plan proposed by Senate President Chuck Morse, R-Salem, a dedicated fund would be established and would provide municipalities 30 percent of the rooms and meals tax returns or about $31 million for each of the next two years.

The program that was suspended provided up to 40 percent of the revenue from the levy.

Morse said he told the NH Municipal Association he wanted something the state could live up to, which was about 30 percent. He said nothing prevents a lawmaker next year from tying to raise it.

“We can’t keep suspending what we send back to communities,” he said.

Sen. Cindy Rosenwald, D-Nashua, asked if there were any provisions requiring cities and towns use the money to reduce property taxes, and Morse said there is not, but town officials have heard loud and clear residents want property tax relief.

Later in the meeting, the committee voted down a proposed amendment by Sen. Lou D’Allesandro, D-Manchester, to provide $20 million a year in municipal aid like that in the current biennium budget, that would dedicate 60 percent to reducing property taxes.

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Abortion

Down party lines, the committee voted for an amendment proposed by Bradley that would remove restrictions the House placed on family planning providers to physically and financially separate abortion from other health services, which targeted Planned Parenthood and other abortion providers.

But the amendment also included the contents of House Bill 625, which prohibits abortions after the 24th week of pregnancy with few exceptions.

Under the bill, doctors who performed abortions after 24 weeks would be subject to criminal charges. The Senate will vote on the bill Thursday.

Democrats said this provision has no place in a budget bill.

“This is nothing more than a political stunt to advance an extreme agenda intent on limiting women’s rights of autonomy over their own bodies,” Soucy said after the vote. “This is one more step in a crusade to eliminate the rights of women and families across the state.”

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Tax Cuts

Along partisan lines, the committee refused to remove tax rate cuts for business, rooms and meals, and interest and dividends taxes. The interest and dividends tax would be phased out beginning with the 2023 fiscal year.

Democrats proposed removing the tax cuts from the budget bill approved by the House.

The rate cuts would mostly impact tax revenues in the second year of the biennium. The estimates are the rate cuts would reduce state revenue $13 million the first year of the biennium and $30 million the second year.

Democrats argued the reduction mostly benefit large out-of-state corporation not small, in-state businesses.

“These cuts are irresponsible and put a healthy revenue outlook at risk,” Rosenwald said, “while providing little to no financial relief to the average Granite Stater.”

The committee also refused to include a temporary change in the amount of money going to the operators of restaurants and lodging for collecting the rooms and meals tax and submitting it to the state from 3 to 5 percent.

The one-year change would cost the state about $5 million.

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Divisive Concepts

The committee voted unanimously to remove the provision the House included in its budget deemed divisive concepts based on an executive order issued by former president Donald Trump.

The provision would prohibit including “divisive concepts related to sex and race in state contracts, grants, and training programs.” The bill would apply to schools, state agencies, and companies and organizations that have state contracts.

Bradley proposed an amendment that would be included in the state human rights statutes that would list human differences, races and other characteristics and find one is neither superior or inferior.

And those provisions would apply across several areas including education and government and under the anti-discrimination provisions of the law.

Several committee members said the lengthy amendment needed more review before a vote and agreed to meet the next morning to vote on the proposal.

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Family Leave

On a 4-2 vote, the committee approved Sununu’s proposed family leave program, which the House removed from the budget.

The program would be voluntary and begin with public employees, while businesses would be able to join the program once it is up and running.

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School Funding

The committee also approved a one-time change in how state education adequacy grants are determined taking into account the drop off in average daily attendance due to the COVID-19 pandemic and federal change in the free and reduced lunch program.

Without the changes, school districts stand to lose upwards of $90 million in state education aid.

Other provisions of House Bill 2 approved by the committee include:

The state Highway Fund would receive a $50 million boost in general fund money to help is sustain state agency operations, particularly for the Department of Transportation.

A new state forensic hospital on the New Hampshire Hospital grounds would receive $30 million, to go with $8 million approved in this biennium’s budget.

The Department of Education would receive $3 million from the Education Trust Fund for a new student data collection system.

The school building aid program would receive $30 million.

State employees would receive pay raises of about 1.6 percent a year totaling $12.6 million the first year, $5.7 million in general fund, and $23.2 million in the second year, $10.25 million in general fund.

Instead of using $5 million a year from the real estate transfer tax for the affordable housing fund, $25 million in surplus 2021 fiscal year money will be put into the fund.

The Governor’s Scholarship Fund will receive $6 million, after the House used the money for other purposes.

The committee also voted to increase the travel and tourism budget by $1.8 million over the biennium.

The money will restore the division’s promotional and marketing account to current spending levels of $4.7 million a year or $9.4 million for the biennium.

The governor’s proposed budget reduced the amount of money for promotion and the House reduced it further.

“We depend on the return on investment for tourism to get the economy back to where it was before (the pandemic),” Daniels said, “and provide the revenue to fund the thing we talked about last six weeks.”

The Senate budget briefing will be Tuesday and the vote on the budget package will be next Thursday, after that a conference committee is expected to work out the differences in the House and Senate budgets.

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