2019 school funding debate

Legislators have proposed many 2019 bills to change how New Hampshire funds schools. This article sums up the competing proposals that have been released so far; Citizens Count will update this article as new bills are released.

The current school funding formula

In fiscal year 2020, New Hampshire plans to provide the following in state funding to local school districts:

• $3,708.78 per pupil
• An additional $1,854.38 for each child eligible for free or reduce price lunch
• An additional $1,995.21 for each child with special education needs
• An additional $725.63 for each student learning English
• An additional $725.63 for each third grade pupil with a score below the proficient level on the statewide reading assessment, unless that pupil is eligible for any of the other additional aid listed above

These amounts are adjusted each year according to the consumer price index.

The state provides additional grants to 169 communities that would otherwise see school funding decreases due to falling student enrollment. These so-called “stabilization grants” decrease by 4% each year.

The state provides this school funding through a statewide education property tax as well as other taxes, such as business taxes.

Towns and cities set their own local property taxes to provide additional school funding.

All told, the state Department of Education calculates the average cost per pupil to be about $15,000 in New Hampshire, so local districts are on the hook for (very roughly) $10,000 per student.

Given the wide variation in property values from town to town, some towns have very high property tax rates and still struggle to fund schools, while other towns have low property tax rates with well-funded schools.

Learn more about the challenges of the current school funding formula

The study committee

In the fall of 2018 a study committee of legislators released their recommendations for a new school funding formula:

• Increase the base per pupil funding to $3,897
• Increase the additional funding for each child eligible for free or reduce price lunch to $2,500
• No change in funding for students with special education needs
• No change in funding for students learning English
• Eliminate the additional funding for each third grade pupil with a score below the proficient level on the statewide reading assessment

The committee also recommended replacing stabilization grants with a new grant program for communities struggling to fund schools due to low property values. That grant program would be based on “equalized valuation per student,” a calculation of equalized property values divided by the number of students in the community. Communities with a low equalized valuation per student would get an additional $1,000 to $2,500 per pupil.

Lastly, the committee recommended that any community that receives federal Title I funds would be eligible for an additional $2,500 per pupil.

The 2019 proposals

Legislators are sponsoring many different 2019 bills to revise the school funding formula. Here is a summary of the bills.

HB 713 - Pretty much the committee recommendation, without new revenue sources

Sponsor: Rep. Kenneth Weyler (R-Kingston)
Base per-pupil funding: Increase to $3,897
Funding for free or reduce price lunch students: Increase to $2,500
Funding for special education students: No significant change
Funding for English language students: No significant change
Funding for low score reading students: Repeal
Grants: Repeals stabilization grants, and creates a new grant program for districts with low local property tax revenue, based on equalized valuation per pupil
Other funding: None

Bottom line: This bill is almost identical to the study committee’s recommendations, which Rep. Weyler served on. Low income districts would see a notable increase in funding, but richer districts would still be able to keep all of their property tax revenue.

HB 709 - Similar to the committee recommendation, but rich towns would pay

Sponsor: Rep. Rick Ladd (R-Haverhill)
Base per-pupil funding: No significant change
Funding for free or reduce price lunch students: Increase ranging from $1,854 to $5,563, with more for schools with a higher percentage of low income students
Funding for special education students: No significant change
Funding for English language students: No significant change
Funding for low score reading students: No significant change
Grants: Repeals stabilization grants, adds new “fiscal disparity aid” for districts with low property tax revenue
Other funding: To help pay for state aid to less wealthy districts, this bill requires some districts to pay “excess education property tax payments” to the state. The bill also puts some limits on how much a town’s school funding can increase or decrease year to year.

Bottom line: This bill is similar to the study committee’s recommendations, which makes sense because Rep. Ladd served on that committee. Low income districts would see a notable increase in funding, while richer districts might end up paying some more to the state.

HB 686 - Increases current funding through a tax on capital gains

Sponsor: Rep. Richard Ames (D-Jaffrey)
Base per-pupil funding: Increase to $4,500
Funding for free or reduce prince lunch students: No significant change
Funding for special education students: No significant change
Funding for English language students: No significant change
Funding for low score reading students: Repeal
Grants: Increases stabilization grants for some districts
Other funding: HB 686 would extend the interest and dividends tax to capital gains, generating about $95 million in additional revenue for school funding.

Bottom line: This bill increases school funding across the board but doesn’t make any major changes to what factors the state considers when funding schools. It would increase annual school funding by about $85 million.

HB 678 - A huge increase for all towns

Sponsor: Rep. Marjorie Porter (D-Hillsborough)
Base per-pupil funding: Increase to $9,929
Funding for free or reduce prince lunch students: No significant change
Funding for special education students: No significant change
Funding for English language students: No significant change
Funding for low score reading students: No significant change
Grants: No significant change
Other funding: This bill increases the state funding for student transportation, from $315 to about $800. The study committee did not recommend any change to the funding formula for school transportation.

Bottom line: HB 678 would increase total state school funding by about $1.1 billion in fiscal year 2020. Every school would see a large increase, but rich and poor towns would still see big differences in how much they can fund their schools.

HB 711 - Increases funding for small towns in particular

Sponsor: Rep. Sallie Fellows (D-Holderness) 
Base per-pupil funding: Increase on a scale from $4,900 to $7,000, with higher per-pupil funding for smaller towns
Funding for free or reduce prince lunch students: No significant change
Funding for special education students: No significant change
Funding for English language students: No significant change
Funding for low score reading students: Repeal
Grants: Repeals stabilization grants
Other funding: This bill increases the biennial adjustment in per-pupil funding based on the consumer price index. It also ends extra per-pupil funding for charter schools, which are not guaranteed as many local tax dollars.

Bottom line: This bill would increase school funding across the board, with the largest increases for small towns and schools with falling enrollment, even if those towns have relatively high property values.

Temporary measures

Rep. Michael Abbott (D-Hinsdale), Rep. Rick Ladd (R-Haverhill), and Sen. Jeanne Dietsch (D-Peterborough) are all sponsoring bills that would freeze the scheduled decreases in stabilization grants, at least for a little while.

Rep. Mel Myler (D-Contoocook) is sponsoring a bill to create a commission to study school funding. He served on the 2018 study committee, and issued his own recommendation for further study.