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Capital Beat: As N.H. school districts struggle, lawmakers weigh proposals for funding

Monitor staff
Published: 12/22/2018 8:18:23 PM

In 2010, Berlin faced an economic reckoning, rocked by the closure of a Gorham paper mill and the swift loss of 240 jobs.

Then the school funding cuts kicked in.

It’s a familiar story. A 2011 legislative change to New Hampshire’s school funding formula saw Berlin take in substantially less state funds for students, pushing the town to increase its property tax rate to bridge the gap.

The Legislature created a stabilization fund the same year to dole out “hold harmless” aid to cities like Berlin and help them recoup the difference. But since 2015, that fund has faced a series of annual reductions, and is set for complete depletion by 2040.

Now, after years of scaling back, officials in Berlin say the school district is near a breaking point. With property taxes already abnormally high and outside aid low, the district may have to shut down the city’s last remaining elementary school if nothing changes, Superintendent Corinne Cascadden said.

“There comes a time when you cannot offer education under the minimum standards of approval without certain programs and personnel,” she said. “We’re really close to that threshold.”

To recap: In New Hampshire, the cost of educating a student is around $15,000 on average, according to the Department of Education. Presently, about $3,600 of that goes to students by default from the state, though differentiated aid and other grant categories can bring it up to $8,121, says John Tobin, a lawyer and advocate for reform.

The rest of that $15,000 is borne by local property taxes, necessitating heftier percentage tax rates in towns without a high-value land to generate big revenues. Wealthier towns with stronger tax bases, in contrast, can more easily cover their school costs and keep the rate lower.

Property poor towns, in contrast, generally have two recourses to lowered aid: raising property taxes and cutting programs and services. Most are doing both.

The brewing crisis, in towns like Berlin, and Claremont, and Winchester and Franklin, is not lost on anyone. Democrats and Republicans came together this year for a committee to come up with solutions and released a report urging modest increases to some aid and decreases to others.

And the specter of a third lawsuit waged by school districts to force the state to pay out more – 20 years after the string of “Claremont” decisions set the present legal requirement – is hanging over the next class of lawmakers as they return to the State House next month.

So what should we expect from the Legislature? In short, a flurry of piecemeal legislation in all directions, but no centerpiece bill.

For Democrats retaking control of the House, the answer boils down to an increase in money to schools generally. But the party hasn’t narrowed down which levers they might pull to get that money.

Lawmakers could increase the per student base adequacy amount that goes to each school, or bump up free and reduced lunch differentiated aid to benefit poorer districts. They could reverse the reductions to the stabilization grants and freeze the allocations in place, or even bring back the pre-2015 rate. They could create a more-permanent funding stream for school building aid, to bolster a recent series of one-off payments in the past biennium pushed for by the governor.

Incoming House Education Chairman Mel Myler, of Hopkinton, says all options are on the table. And for Myler, the landscape demands a two-pronged strategy: first, making short-term improvements to state aid next session; and second, pulling together a commission to look at bigger changes.

Already bills have been filed to raise the base per pupil adequacy grant from $3,600 to between $4,000 and $7,000 Myler said. And some lawmakers are pushing to repeal a provision that now allows richer towns to keep excess education property tax revenues for themselves, rather than return to the state to redistribute.

Senate Education Chairman Jay Kahn, a Keene Democrat, agreed, describing his party’s patchwork series of proposed reforms as a holistic fix – one where any combination of ideas could achieve the same results for property tax payers.

But time will tell which of these proposals take the lead during a packed budget year already swirling with other funding priorities. And it remains unclear which proposals might attract the support of Gov. Chris Sununu.

Sununu says he too sees the funding disparities as a “significant problem.” But in an interview Wednesday, the governor declined to comment on whether he supports increases to the base adequacy amounts or a freezing of the stabilization grants. Instead, he offered a different prescription: passing the entire process off to the Legislature and overturning the state requirements.

“I go back to what I’ve always said,” he said, referencing a constitutional amendment he advocated for in his re-election campaign. “You have to restore 100 percent of the power of the purse, the power of funding schools to the Legislature. That is the voice of the people.”

Throughout his re-election campaign, Sununu proposed a constitutional amendment that would effectively override the Claremont decisions and let individual lawmakers fight for and secure funds for their own districts.

In many ways, the degree to which Sununu and the Democratic Legislature differ on solutions mirrors how differently they diagnose the problems. For Sununu, the difficulties stem from the Claremont court rulings themselves.

“Twenty years ago a terrible decision was made in the courts, allowing the courts to dictate these formulas,” he said in an interview Wednesday. “It’s pretty much been chaos ever since.”

To Sununu, emulating other states and shifting costs onto the state government is the wrong way to do it. “They have giant broad-based taxes,” he said of other states. “Sales taxes, income taxes. And those lead to basically a powerhold by the capital city in determining everything that happens across the state. And the people have much less of a voice.”

That would be at odds with the more grandiose visions of advocates for higher funding, like Tobin, who believes most of the $15,000 per student tuition should be covered by the state.

But for Cascadden and other superintendents, getting to a longer term solution – whatever it is – is the only priority.

“The state legislature has got to resolve this issue, and not just put a band-aid on it,” she said. “It’s an age old problem. It’s a big one to tackle. But it needs to be put to rest.”

(Ethan DeWitt can be reached at 369-3307, edewitt@cmonitor.com or on Twitter at @edewittNH.)

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