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New Hampshire’s school funding formula explained

  • Junior Autumn Colon-Pagan listens to a math presentation at Pittsfield Middle High School last month. “Almost all of the teachers that have been here for a long time – it’s like their passion. This school is their passion,” she said. GEOFF FORESTER



Monitor staff
Saturday, March 03, 2018

How does New Hampshire pay for its schools?

The answer is a mix of state and local funding, with towns and cities ponying up, in most cases, the majority of the funds.

The state’s share is determined by the so-called “adequacy” formula, named for the Claremontstate Supreme Court cases of the 1990s that established the state’s responsibility for funding an “adequate” education.

The formula

Adequacy is a per-pupil formula. The base amount is $3,636 per student, but there’s also “differentiated aid” – that’s extra money for certain types of students. Schools get an additional $1,818 for every low-income student, and $1,956 for special education students. English language learners get $711.

To pay for adequacy, the state uses a collection of revenue sources – business taxes, the rooms and meals tax, for example. But the greatest share of adequacy’s cost – about 40 percent – is raised with the statewide property tax.

In especially property-rich towns, where the statewide property tax raises more money than the local district would receive from the state in adequacy, the town gets to keep the excess.

What’s changed?

Education funding formulas in New Hampshire have a long and winding history. But in its current form, the formula New Hampshire has now was established in 2008. But in just ten years, that system has gone through some major changes.

In 2011, lawmakers did away with “fiscal capacity disparity aid” – extra dollars for property-poor towns. Lawmakers also stopped collecting excess revenues generated from the statewide property tax in property-rich communities. Before 2011, the formula also used to take into consideration how concentrated poverty was in doling out aid.

All told, the changes in 2011, if enacted right away, would have resulted in a $158 million reduction in state aid to schools. So lawmakers came up with a complicated hold-harmless provision called “stabilization” grants. Stabilization meant that districts couldn’t get less in 2012 than they received in 2011, before the overhaul.

In 2015, lawmakers decided to phase-out stabilization grants. Starting in 2016, the grants have gone down at the rate of 4 percent a year.

That year, lawmakers also removed a cap on how fast a district’s adequacy grant could go up every year following a successful lawsuit brought by Dover.