Every New Hampshire child is entitled to an equal opportunity for an adequate education. Subjecting this right to the variability of local property tax capacities and choices violates this constitutional right. And yet this uncertain and unequal property tax dependence is today the reality of New Hampshire’s public-school finance system.
Ten years ago, in 2007, New Hampshire undertook to move in the direction of a system that would do a better job of funding an equal educational opportunity for all public-school children. At that time, a “Joint Legislative Oversight Committee on Costing an Adequate Education,” was formed, hearings were held, and research reports were received.
A core finding in the Oversight Committee’s ensuing 2007 report related to the presence of economically disadvantaged, at-risk students. Specifically, the committee reported that “a large body of research shows that students who are poor or economically disadvantaged are at risk for academic failure. … As a result, many states vary the amount of funding distributed for poverty by providing larger per-student grants to school districts with higher poverty concentrations.”
Building on this and related findings, the Legislature enacted in 2008 a new education adequacy funding formula. The new formula provided significant increments of funding to school districts with higher proportions of economically disadvantaged, high-risk students. It doubled state aid for schools with the highest proportions of poor students. This 2008 legislation included a comprehensive statement of legislative purpose making clear that the new formula had been explicitly designed to meet constitutional standards consistent with the 2007 Oversight Committee report.
The 2008 legislation also included “fiscal capacity disparity aid.” This aid took the form of special grants, additional to constitutionally-mandated adequate education grants. The aid was provided to property-poor, low-income communities in recognition of their limited ability to raise funds for education via their respective local property tax assessments.
The 2008 education adequacy funding formula, and the companion fiscal capacity disparity aid, had a short life. Led by then-Speaker William O’Brien, the 2011-2012 Legislature engaged in a concerted across-the-board effort to cut back on the state’s funding obligations. The 2008 school-aid formula was an obvious target.
The result was new legislation (now codified as RSA 98:40-a), enacted in the waning days of the 2011 legislative session. It eliminated all those 2008 provisions that had been designed to sufficiently recognize constitutionally-mandated adequate education costs associated with increasing proportions of economically disadvantaged, at-risk students. No research or other substantial findings were cited in support of the 2011 change.
The 2011 change instantly reduced the statewide legislatively-recognized, constitutionally-mandated cost of an adequate education from about $921 million to about $776 million. But this extraordinary cut in the state’s funding obligations was masked by a time-limited “stabilization” grant system that essentially operated at the time to hold most communities harmless at then-existing funding levels.
The mask has come off. Stabilization grants, which have been characterized as discretionary and not constitutionally based, are now being cut by a new 2016 legislative mandate (RSA 198:41, IV(d)) at a rate of 4 percent per year from 2012 stabilization grant funding levels. These stabilization grant cuts have belatedly revealed the constitutional deficiency of the 2011 adequacy formula. As documented by several recent news reports, these funding cuts are placing increased stress on school districts, municipalities and local property taxpayers.
I have filed a bill that seeks to return us to the 2009 education aid formula. (The printed version of the bill, HB 597, and its fiscal note contain a serious drafting error; I will submit at the bill’s hearing on January 31 a corrective amendment along with a revised fiscal analysis) The bill’s co-sponsors are Representatives Cloutier, Myler, Heath, Rosenwald, Berch, Luneau, Lovejoy and Rogers and Senators Feltes and Watters. The amended HB 597 seeks to re-establish, with minor modifications, the part of the 2008 adequate education formula that provided for increasing aid for all students in school districts with higher concentrations of economically disadvantaged, at-risk students. The proposed changes in the adequacy formula, after accounting for student enrollment changes, will increase the statewide legislatively recognized cost of an adequate education in FY 2018 from about $752 million to about $939 million. Most of the increase will be funded from no-longer-needed stabilization grants.
The proposed bill also re-establishes a modified version of fiscal capacity disparity aid, providing a statewide total of about $33 million to the lowest 12 percent of communities as measured by equalized property valuation per pupil, but only to communities with a median family income less than the statewide median.
If enacted, an estimated 183 municipalities will receive aid above current levels. All other municipalities will be held harmless at FY 2017 levels at a replacement stabilization grant cost of about $28 million. These remaining, relatively small, stabilization grants will then be stepped down to zero over the next 25 years.
This is costly legislation. Approximately $35 million of the new costs appear to me to be constitutionally-mandated. About an additional $33 million for fiscal disparity and $28 million for stabilization comprise discretionary grants, which nonetheless are essential to the stability and success of many school systems.
Options for state-level funding of these costs need to be discussed. But the need to explore and identify state-level funding options cannot become an excuse for inaction. And passing the buck to the variable capacities and choices of beleaguered local property taxpayers is not acceptable. Our children are our future. Their educational rights and needs are paramount. They must no longer be ignored.
State Rep. Dick Ames lives in Jaffrey.