The weekend has arrived when Americans play for three days while politicians give speeches and issue press releases recognizing the economic contributions of the American labor movement. 

Labor’s contributions are worth recognition. But have any politicians ever acknowledged that laboring in isolation produces nothing beyond basic subsistence? For labor to generate human progress, it has to be mixed with innovation. Yet we have no holiday for the innovators.

Our prehistoric ancestors labored for thousands of years with no economic advancement. The discovery of agriculture produced some wealth, but humans then labored on farms for millennia with only periodic and temporary spurts of economic growth. Technological innovations would sometimes lead to bursts of productivity that would improve living conditions, but those would fade relatively quickly. 

Not until the Enlightenment and the Industrial Revolution did humans suddenly begin to generate huge and sustained gains in living standards. This chart from Our World In Data shows how everything suddenly changed in the late 18th and early 19th centuries. 

Scholars debate what caused this explosion of economic progress. But economist Deirdre McCloskey makes a compelling case that it was a change in human thought that gave birth to the miracle of modern growth. 

A change in how people honored markets and innovation caused the Industrial Revolution, and then the modern world. The old conventional wisdom, by contrast, has no place for attitudes about trade and innovation, and no place for liberal thought. The old materialist story says that the Industrial Revolution came from material causes, from investment or theft, from higher saving rates or from imperialism. You’ve heard it: “Europe is rich because of its empires”; “The United States was built on the backs of slaves”; “China is getting rich because of trade.”

But what if the Industrial Revolution was sparked instead by changes in the way people thought, and especially by how they thought about each other?

She goes on…

Economists and historians are starting to realize that it took much, much more than theft or capital accumulation to ignite the Industrial Revolution—it took a big shift in how Westerners thought about commerce and innovation. People had to start liking “creative destruction,” the new idea that replaces the old. It’s like music. A new band gets a new idea in rock music, and replaces the old if enough people freely adopt the new. If the old music is thought to be worse, it is “destroyed” by the creativity. In the same way, electric lights “destroyed” kerosene lamps, and computers “destroyed” typewriters. To our good.

McCloskey has documented how the Enlightenment changed the way people think about work, creativity, invention, innovation, commerce and markets. Work and self-sufficiency were elevated in status, but so too were trade and commerce, finance and innovation. 

In short, market capitalism was slowly recognized as a way for ordinary individuals to improve their station in life. And that changed humanity, unleashing an unprecedented era of sustained economic and cultural progress.

People began to realize that there were ways to advance from one social rank to the next, and those ways involved not working harder, but working smarter. 

Enlightened American gentlemen in the late 18th century did not content themselves with continuing to work as their fathers had. They became obsessed with experimenting, tinkering and inventing. This was not confined to geniuses like Ben Franklin and Thomas Jefferson. 

George Washington experimented with new agricultural methods, invented a new type of threshing barn, and helped develop the American Foxhound. 

The spirit of the age sparked a wildfire of imagination, leading to inventions from ordinary people who sought to improve their own lives and the lives of others.

In 1764, an illiterate weaver and carpenter named James Hargraves invented the Spinning Jenny, helping to spark the Industrial Revolution. He was a nobody, but he’s the one who turned his town into a boomtown. 

Pennsylvania farmer Jacob Yoder invented the flat-bottomed boat in 1782. About 1785, uneducated Delaware businessman Oliver Evans invented the automatic flour mill.

The examples go on and on. A common theme is that the people who created the devices that allowed humanity to lift itself up from subsistence farming tended to be lowly tinkerers with little or no social status.  

These tinkerers, inventors and innovators created the factories and machines that created the labor movement, which Americans are supposed to celebrate this weekend. Yet we have no holiday for the innovators. Their contributions are mostly forgotten, their achievements taken for granted. 

Our culture assumes that prosperity and progress are humanity’s baseline. We have grown up in an advanced civilization with plentiful food, clothing and shelter, and with luxury goods so abundant that even people we consider poor have flat-screen TVs, smartphones and automobiles. We assume this is the way things always have been.

It was not. This is a recent human creation. Yes, labor made the factories, the railroads, the highways possible. But the innovators gave labor the tools with which they built our modern world. If we want to preserve the progress we’ve made, we should recognize and celebrate the innovators too. 

Innovation, not labor, was the foundation of the Industrial Revolution. Labor, a critical component, came after. And it came because industrial life promised greater economic progress than life on the old family farm.

We can stimulate more progress by encouraging more innovation. If we forget its foundational contribution, we will only make additional progress harder. 

A Croydon couple on Wednesday filed a civil rights lawsuit against the state, challenging a law that forbids local school districts from paying tuition to religious schools.

In 2017, New Hampshire passed a law that allows school districts that don’t offer education at certain grade levels to send students to private schools for those grades. So if a district doesn’t have a middle school, it can tuition students to private middle schools. Except, the law specifically excludes religious schools.  

Dennis and Catherine Griffin raise their 12-year-old grandson, Clayton, in Croydon, which does not have a middle school. Clayton attends Mount Royal Academy, a Catholic school. If Clayton attended any of the private, non-religious middle schools in the area, his tuition would be paid by the school district. But because his family chose a Catholic school, the district cannot pay his tuition. 

The Griffins’ lawsuit says this prohibition is unconstitutional religious discrimination. 

The exclusion “is unconstitutional on its face,” the complaint says, because it amounts to “denying tuition payments to tuition-eligible students and their families on the sole basis that an otherwise eligible private school is sectarian.”

The U.S. Supreme Court ruled in June in Espinoza vs. Montana Department of Revenue that states cannot exclude religious schools from public education programs just because the schools are religious.  

“In light of Espinoza, states like New Hampshire cannot deny tuition to families who live in choice towns and who choose to send their children to religious schools,” said Tim Keller, senior at the Institute for Justice, which is representing the Griffins. “The Supreme Court could not have been clearer when it said that while ‘[a] State need not subsidize private education[, ] once a State decides to do so, it cannot disqualify some private schools solely because they are religious.’”

The Griffins hope the courts will recognize the state law as unconstitutional under Espinoza and allow the district to pay Clayton’s tuition. 

“We’ve chosen what we believe is the best school for our grandson,” Dennis Griffin said in a statement released by the Institute for Justice. “It’s not fair that we can’t receive the same support that other families in the town receive just because his school is religious. We hope that New Hampshire courts will follow the direction of the U.S. Supreme Court.”

Gov. Maggie Hassan vetoed a similar tuition bill in 2016, saying it was “unconstitutional” because it didn’t prohibit money from going to religious schools. In Espinoza, the Supreme Court reached precisely the opposite conclusion.

New Hampshire’s tax credit scholarship program, which lets businesses and individuals take business tax credits for donations made to certain approved scholarship programs, includes religious schools. 

The language prohibiting tuition money from going to “sectarian schools” was taken from a provision in New Hampshire’s constitution that prohibits tax money from going to such schools. That 1877 constitutional amendment, known as a Blaine amendment, was one of many passed nationwide in a wave of anti-Catholic fear after the Civil War. 

In Espinoza, the Supreme Court effectively nullified these amendments, holding that they amounted to unconstitutional religious discrimination. 

NOTE: This post, originally published Aug. 28, was updated on Aug. 31 to add the final numbers for the month. 

 

August has recorded New Hampshire’s lowest numbers of COVID-19 infections, hospitalizations and deaths since May. The dramatic, summer-long decline in all three metrics occurred as the state reopened its economy. But it has been hard to see by looking only at the daily reporting.

Media reports focused on daily snapshots or cumulative totals have masked the decline. Looking at the monthly trends shows just how sharply and quickly the state’s numbers have fallen.

As students return to school and restaurants expand indoor seating, New Hampshire has fewer than 1,000 infections for the month, fewer than two dozen hospitalizations, and fewer than 20 deaths. August saw large drops in all three categories, but especially in hospitalizations and deaths, which both fell by 90% since their peaks in April and May, respectively.

The state does not break down its numbers by month, so the Josiah Bartlett Center for Public Policy created month-by-month graphs to see how infections, hospitalizations and deaths were trending over the summer. 

We found that new infections peaked in May with 2,505. New hospitalizations peaked in April, with 213. New deaths peaked in May, with 176. 

Since May, the state has experienced a substantial decline in all three metrics. 

By the end of August, New Hampshire experienced a 72% reduction in infections and a 90% reduction in both hospitalizations and deaths since their peaks in April and May.

 

The drop since July has also been sharp. The state had 128 new hospitalizations in July. It recorded only 21 new hospitalizations in August. The state had 44 deaths in July. It has recorded only 17 deaths in August. The drop in infections was much smaller. They fell from 801 in July to 692 in August. In percentage terms, infections fell by 14%, hospitalizations by 84% and deaths by 61% from July-August.

The Sununu administration has acted cautiously by lifting economic restrictions in a slow and methodical manner, which may have helped to slow the spread of the virus during the reopening period.

The numbers trend shows that no additional restrictions are warranted at this time and that remaining restrictions should be reconsidered. 

It’s worth noting that as the governor began lifting economic constraints in May, many predicted a huge summer surge in infections, hospitalizations and deaths. Instead, the opposite happened. As the economy reopened, infections, hospitalizations and deaths all fell. 

As we pointed out last week, the state still has not experienced a single outbreak at a day care center, restaurant or shopping mall. As of August 31, only six people were hospitalized with COVID-19 in the state. 

That is not to say that the virus has disappeared or is not a concern for some people. Just over one fifth (21%) of infections have been traced to community transmission, according to the state, showing that there is some risk of catching it out in public.

It’s possible that Motorcycle Week changes the data or that cold weather brings a resurgence in infections and fatalities. But a realistic look at the data currently available shows cause for optimism and additional reopening measures, not pessimism and further restraints on economic and personal activity. 

 

 

For months, Democratic gubernatorial candidates Dan Feltes and Andru Volinsky have criticized Gov. Chris Sununu for not issuing an emergency order mandating that people wear face masks.

As new cases have declined, the Democratic primary rivals have continued to press for a mandate, with Volinsky even hinting at masses of infected outsiders streaming over the border and spreading the virus in New Hampshire.

“As Gov. Chris Sununu has chosen to open our malls, with hordes of Massachusetts shoppers coming from areas of concentrated contagion, we need to be even more careful to limit the spread of the virus. It is the cost of doing business. No shirt, no shoes, no mask, no service,” Volinsky wrote in May.

Yet state data tracking the dates people contracted the illness show a steady decline in new COVID-19 cases since early May, when shopping malls reopened. Though restaurants reopened for indoor dining a month later, new confirmed cases continued to fall.

May’s daily high was 73 new cases, hit on May 12.

June’s high was just under half that number, 36 new cases, hit on June 1 and June 12.

July’s high was 37, hit on July 22.

Since July 1, New Hampshire has had only a handful of days with 30 or more confirmed new cases, and in August cases have continued to decline overall. (August numbers could later be revised pending test results.)

As of August 20th, New Hampshire had a total of 255 confirmed, active COVID-19 cases and 11 hospitalizations.

Out of a population of 1.36 million people, 11 — or .0008% — are hospitalized with COVID-19 and 255 — or .02% — are confirmed to have the disease.

Not a single municipality in the state has even 30 confirmed cases. Only five have confirmed, active cases in the double digits: Manchester has 29, Nashua 17, Salem 11, Bedford 10, and Derry 10.

Of New Hampshire’s 234 municipalities, 95 (40%) have zero active cases, and 74 (32%) have between one and five active cases.

Without a statewide mask mandate, and with only eight municipalities having passed their own mandates, 72% of New Hampshire’s towns and cities have fewer than five active COVID-19 cases, and only five municipalities (2%) have more than nine active cases.

It’s possible that the warm weather has played a role. Yet New Hampshire has not reported a single outbreak at day care centers, restaurants or shopping malls, three indoor businesses that many people worried would facilitate rapid virus spread.

In New Hampshire, clusters have been the biggest health threats. The state has identified clusters as the largest source of infections (36%), hospitalizations (35.6%) and deaths (82.7%). Gov. Sununu’s order last week for mandatory mask use at planned events of 100 or more people was intended to reduce these clusters.

The case for an individual mask mandate in general, however, is much harder to make based on the state’s numbers.

Masks have been shown by multiple studies to be effective in slowing the spread of the novel coronavirus. The Josiah Bartlett Center for Public Policy has recommended voluntary mask wearing along with a state public relations campaign to encourage it.

But a statewide mask mandate is clearly unnecessary to achieve the state’s goal of maintaining enough hospital bed capacity to handle a surge in COVID-19 patients.

New Hampshire has more than 300 Intensive Care Unit beds (including surge capacity), and only 11 actively infected patients.

As the state’s economy has slowly reopened, infections, hospitalizations and deaths have fallen. State-imposed business restrictions may have played a role, along with businesses’ own rules and a general, voluntary acceptance of mask wearing as a social norm.

What played no role was an emergency order compelling citizens to wear masks. It seems strange that the demand for a mandate doesn’t fade along with the state’s dwindling infection and death rates.

Charter schools increase the average quality of traditional public school teachers by providing high-quality, unlicensed teachers an easier pathway into the field, a new paper published by the National Bureau of Economic Research concludes. 

“Because the fixed costs to participating in the charter sector are low, teachers are able to explore their taste for teaching before committing to fixed costs (licenses). This in turn generates positive selection on the quality of teachers entering public school careers,” conclude economists Jesse Bruhn of Brown University, Marcus Winters of Boston University and Scott A. Imberman of Michigan State University. 

Looking at Massachusetts public charter schools, the economists discovered that charter schools exhibited a U-shaped teacher attrition pattern, with high-performing teachers and low-performing teachers both tending to leave at high rates. But the destinations of the high-quality and low-quality teachers were polar opposites. 

Unlike in traditional public schools, low-performing charter school teachers tended to leave teaching for other fields. By contrast, high-performing charter school teachers tended to pursue licensure and transfer to a traditional public school. 

The authors conclude that the low barrier to entry for becoming a charter school teacher attracts people who are interested in teaching but who are not ready to commit to getting a four-year teaching degree and a state license. 

By offering a quick on-ramp into the teaching profession, instead of a wall that takes years to climb over, charter schools are able to attract talented teachers who otherwise would never enter the field. Once they decide to stick with teaching, they then pursue licensure and move to traditional public schools, which typically offer higher pay and more generous benefits. 

In short, charter schools perform a valuable public education service by weeding out poor-performing teachers and channeling high-performing ones into traditional public schools. 

Bruhn, Winters and Imberman write that “charter schools tend to hire unlicensed teachers who are ineligible to teach in the public sector and then there emerges a mobility pattern such that the least effective charter school teachers are more likely to exit teaching while effective teachers are more likely to obtain a license and move into the traditional public school sector. This pattern of results suggests that charter schools create a positive externality for local public schools by increasing the average quality of the labor available to them.”

Charter schools are public schools that are operated under a contract, or “charter,” with the state or a local school district. They are not subject to district-negotiated teacher union contracts or many state regulations that dictate how public schools are to operate. That gives them the flexibility to pursue alternative management practices. 

The authors note that rigid employment restrictions at traditional public schools likely make traditional public schools less, not more, effective.

“Employment restrictions embedded in collective bargaining agreements, administrative policies, and legislation may inhibit public school effectiveness by limiting their ability to retain effective teachers and remove ineffective teachers (Goldhaber & Hansen, 2010; Staiger & Rockoff, 2010; Cowen & Winters, 2013),” they write.

By contrast, charter schools that aren’t subject to rigid employment restrictions have found ways to recruit very high-performing teachers into the profession while pushing low-performing teachers out. 

To help lower-income students at risk of falling further behind in the 2020-21 school year, Gov. Chris Sununu allocated $1.5 million out of $1.25 billion in federal coronavirus relief aid to scholarships students whose families earn no more than 300% of the federal poverty level. Much of the coverage and commentary about this modest effort to help these students has been inaccurate or misleading.

This is hardly surprising, as attacks on these scholarship programs have always consisted largely of misinformation. Here we explain some of the misleading claims being made in attacks on the governor for offering aid to lower-income students.

 

Claim: This is a taxpayer giveaway to private schools.

Fact: This aid goes to low-income families via two non-profit scholarship organizations that administer New Hampshire’s tax credit scholarships. Those organizations give scholarships directly to families, not to private schools. By law, families may use these scholarships at any private or parochial school, at any public school outside their home district, or to home school their children. The money is not direct aid to private schools. It is aid to families, who are free to choose public schools if they wish. They tend not to choose public schools, which are more expensive than most of the private or home-schooling options.

 

Claim: The scholarship organizations are sitting on $1.7 million in unspent funds from the last school year.

Fact: The $1.7 million listed as unspent in the scholarship organizations’ 2018-19 annual reports was used for scholarships awarded in 2019-20. It is not cash sitting in reserve. The effort to paint these funds as cash-rich is deliberately misleading. (The way the groups collect and spend money has been explained to legislators and education activists repeatedly.) The scholarship organizations collect money in one academic year for distribution the following academic year.

 

Claim: Money slotted for the education of children must go to public schools only.

Fact: New Hampshire has never reserved education spending exclusively for public schools. In the 19th century, municipalities would sometimes pay private schools to educate students.  State law allows public education funds to pay for tuition at private schools in some circumstances. The goal of public education is to pay for students to become educated, not to fund one particular institution exclusively, particularly if that institution offers some students an inadequate education. On average, minority and lower-income students significantly underperform white and more affluent students in public schools. There is evidence that this gap has widened during the hastily improvised remote instruction period in 2020 (see here and here). The $1.5 million is not being set aside to fund private schools, but to shrink that achievement gap by giving lower-income families the ability to access an education that will work better for their children.

 

Claim: The scholarships will equal roughly $1,875 per pupil, much higher than the few hundred dollars per pupil that public schools are receiving.

Fact: Breaking down the coronavirus education aid this way creates the misleading impression that taxpayers are being cheated. The opposite is true; they are realizing an amazing bargain. New Hampshire public schools spend an average of $19,806 per pupil, including capital and transportation spending. Of that $19,806, more than $12,000 of local taxpayer money will remain in the local public school after a scholarship student leaves. On average, the state’s portion is more than $5,000 to educate each of these students (depending on how much additional state aid they get for special educational needs and socio-economic status). With these scholarships, the state would spend a paltry $1.5 million to educate approximately 800 students ($1,875 per student), instead of more than $4 million to educate them in a traditional public school.

Including all state, local and federal spending, the value is even more stunning. For a mere $1.5 million, the state is buying an education for 800 students that would cost more than ten times as much ($15.8 million) in a traditional public school.

Furthermore, if the $1.5 million in question were divided among all New Hampshire public school students, it would equal an additional $8.65 per student, producing no noticeable impact on student achievement. Using these funds to provide scholarships for students most at risk of falling behind would save taxpayers money while freeing up space in public school classrooms when space is at a premium.

 

Summary: This supposed controversy really isn’t about what’s best for the at-risk students who will be winning scholarships or about taxpayer value. It’s about whether families ought to be empowered to choose an alternative education. For some, anything that allows families to choose an alternative to their assigned public school — even another public school in a different district — must be crushed. That’s the basis of the objection, which is really a shame.   

In our republican form of government, all public employees, including police officers, exercise only the powers granted them by the people. All public employees serve the citizens and are accountable to them. The powers granted to public employees are altered from time to time as the people demand.

High-profile abuses of police power in recent years have led to widespread demands for increased accountability. In this paper, attorney Chuck Douglas offers eight proposals for reforming New Hampshire police practices and making officers more accountable to the people.

The eight proposals are:

  1. Make police discipline files public.
  2. Outlaw chokeholds or neck compression, regardless of the circumstances.
  3. Mandate body cameras and verbal warnings.
  4. Require officers to intervene, stop, and report misconduct.
  5. Improve screening and treatment for PTSD.
  6. Pursue more and better de-escalation training.
  7. Adopt better use-of-force policies that require force to be reasonable, necessary, and proportionate to the crime and circumstances.
  8. End officer immunity from civil lawsuits.

You can download and read the full report (in pdf format) here: Josiah Bartlett Center Eight Police Reform Proposals

Cigarette smokers and flavored tobacco scavengers from Massachusetts produced a surge of New Hampshire tobacco tax revenue that almost single-handedly prevented a business tax increase, preliminary, unaudited state figures suggest.

State tobacco tax collections rose significantly in March, April and June, putting tobacco tax revenue $14.5 million (7.3%) higher than budgeted and $13.7 million (6.9%) higher than last year, according to the Department of Administrative Services’ June revenue report. 

Revenue from the federal tobacco settlement was $2.9 million above plan, for a total tobacco-related increase over budget projections of $17.4 million. Preliminary, cash figures suggest that the state missed triggering an automatic business tax hike by $15.35 million. 

In the last state budget, lawmakers included a provision that would trigger automatic business tax hikes if state general and education fund revenue fell at least 6% below projections. Based on June’s cash figures, revenues appear to have fallen 5.4% below projections. These are preliminary figures, however, and are subject to revision when adjustments are made based on the state’s later, more thorough accounting of the year’s revenues.

If these figures hold, business owners could reasonably thank smokers and Massachusetts lawmakers for helping to prevent those automatic tax hikes. Tobacco tax revenue was 34.6% above budget in June, 34.9% above budget in April, and 10% above budget in March.

Department of Revenue Administration staff say those increases are most likely caused by smokers stocking up for the first lockdown and in anticipation of a second lockdown, combined with Massachusetts residents crossing the border to buy flavored tobacco. 

Massachusetts banned the sale of flavored tobacco products, including flavored snuff and chewing tobacco, effective June 1. In addition to a cigarette sales surge, state tobacco tax data show a large increase in smokeless tobacco sales, particularly snuff, in June. 

Sales of what the state classifies as “other tobacco products,” meaning everything excluding cigarettes and premium cigars, have spiked in recent months, surpassing 7% of all tobacco sales in June. 

A sizable portion of that is likely related to the Massachusetts ban on flavored tobacco products. In addition to flavored smokeless tobacco, the ban also includes menthol and other flavored cigarettes as well as flavored vaping products. 

New Hampshire budget writers expected to supplement state revenues this year by applying the tobacco tax to electronic cigarettes. Last year, legislators expanded the tobacco tax to cover e-cigarettes, even though there is no tobacco in e-cigarettes. 

The tax went into effect on January 1, but it has produced less revenue than expected. By the end of the state’s 2020 fiscal year on June 30, taxes on e-cigarettes had generated just $1.2 million. 

Legislators budgeted $5.7 million in revenue from e-cigarette sales for Fiscal Year 2021, which began on July 1. Based on the first six months of collections this year (covering the final half of Fiscal Year 2020), that projection seems unrealistic. Collections so far suggest that the state could expect to bring in less than half what it projected to take from e-cigarette sales in FY 2021.  

On Monday, the Josiah Bartlett Center reported on our website (which you should read religiously because you’re smart and you want to drop impressive knowledge on unsuspecting strangers at cocktail parties, whenever we can have those again) that preliminary state revenue figures suggest there won’t be automatic business tax hikes for the 2021 fiscal year. 

The key word there is “suggest.” A business tax increase is still a possibility, if a remote one.

Last year’s state budget contained a provision that would trigger a Business Profits Tax increase of 2.6% and a Business Enterprise Tax increase of $12.5 percent if state General and Education Fund revenue fell at least 6% below projections. 

State collections for June, the final month of the fiscal year, show that General and Education Fund revenues fell below plan for the year by 5.4%. But the June report is based on cash collections as of the end of June. The numbers are always adjusted later, and the totals are not final and official until the audited financial report is released in December. 

We looked back at state revenue reports through 2007 (the last year for which reports are posted online) and found five years between 2007 and 2019 in which there was at least a $20 million difference between the June cash report and the final audited revenue figures.

The differences are as follows:

2008: $20.4 million

2010: $78.5 million

2012: $27.2 million

2016: $67 million

2019: $-25.1 million

Only in 2019 was the audited figure lower than the June cash figure, and most of that change (more than $16 million) was attributable to business tax refunds. But there was a drop of about $9 million not related to tax refunds. 

If the final, audited General and Education Fund revenues for FY 2020 are lower than June’s reported revenues by $15.35 million, the tax increases would be triggered. 

That would be an unusually large drop, but it’s not unprecedented. Businesses face the prospect of spending the next six months in tax-rate limbo, which can affect hiring and other spending plans. 

If you’re uncertain whether your taxes are going to go up, you’re more likely to save cash and avoid hiring, especially since payroll makes up the largest share of the Business Enterprise Tax, which is scheduled to rise by 12.5% if the revenue trigger is met. 

Legislators had the chance to remove this uncertainty and repeal the tax-hike trigger. But, hoping for a tax increase, they refused. 

We’ll have a better idea of the situation in a few weeks, when the state releases June preliminary accrual report. That’s a follow-up report to the June cash report. It includes a fuller financial picture and tends to be much closer to the final, audited report released in December.

For now, business owners and managers should keep the celebrations on hold.  

The June 30th U.S. Supreme Court ruling in Espinoza v. Montana Department of Revenue demolishes once and for all the false claim that New Hampshire’s Education Tax Credit Program violates the New Hampshire and U.S. Constitutions. 

Further, the ruling renders inoperative New Hampshire’s anti-Catholic Blaine amendment, added to the state constitution in 1877. 

“While the plain text and history of New Hampshire’s Blaine Amendment should not have been an impediment to enacting robust school choice programs prior to the Supreme Court’s ruling in Espinoza, there is now no question that legislators and policymakers in the Live Free or Die state are free to design and enact programs that will empower parents to choose the educational environment that will best serve their children’s learning needs,” Tim Keller, senior attorney at the Institute for Justice and co-counsel in the Espinoza case, told the Bartlett Center.

The Espinoza case overturned a Montana Supreme Court decision that had blocked that state’s tax-credit-funded educational scholarship program because it allowed parents to use the scholarships at religious schools. 

In 2013, New Hampshire political activist Bill Duncan sued to have New Hampshire’s similar program overturned for the same reason. The New Hampshire Supreme Court did not address the merits of the case, ruling in 2014 that Duncan did not have legal standing to sue.  

In the Espinoza case, the U.S. Supreme Court rejected the Duncan argument. The court ruled that if a state has a scholarship program, it may not discriminate based on religious status. Such discrimination violates the First Amendment’s guarantee that individuals have the right to the “free exercise” of religion.

At issue in the case was Montana’s “Blaine amendment,” an anti-Catholic amendment to the state constitution that prohibited state appropriations from going to “sectarian schools.”  

The New Hampshire Constitution has a similar amendment, added in 1877, which states that “no money raised by taxation shall ever be granted or applied for the use of the schools of institutions of any religious sect or denomination.”

These amendments are often called “no-aid” provisions.

“Montana’s no-aid provision discriminates based on religious status,” the court held.

“Montana’s no-aid provision bars religious schools from public benefits solely because of the religious character of the schools,” the court determined. “The provision also bars parents who wish to send their children to a religious school from those same benefits, again solely because of the religious character of the school.”

“To be eligible for government aid under the Montana Constitution, a school must divorce itself from any religious control or affiliation. Placing such a condition on benefits or privileges ‘inevitably deters or discourages the exercise of First Amendment rights,’” the court concluded.

In sum, education scholarship programs cannot discriminate against schools based on the religious status of those schools. New Hampshire’s Education Tax Credit Program does not bar funds from going to religious schools, so no change needs to be made. The Espinoza ruling clarifies that this practice is constitutional and that changing the program to exclude religious schools would be unconstitutional.

In 2017, the Josiah Bartlett Center for Public Policy and the Institute for Justice published a briefing paper arguing that New Hampshire’s tax credit scholarship program does not violate the state or U.S. constitutions, for reasons similar to those laid out in the Espinoza case. 

The co-authors of that report were Richard Komer and Tim Keller of the Institute for Justice. Komer argued the Espinoza case before the U.S. Supreme Court last year, and Keller was a co-counsel on the case.