Facing the political realities of school funding

  • Students from the ConVal Regional School District participated in scientific experiments in the MilliporeSigma Curiosity Cube on Thursday to learn more about the periodic table of elements. The Curiosity Cube is a mobile science lab that travels across the United States to teach elementary and middle school students to teach and get students excited about science. Staff photo by Nicholas Handy

  • Students from the ConVal Regional School District participated in scientific experiments in the MilliporeSigma Curiosity Cube on Thursday to learn more about the periodic table of elements. The Curiosity Cube is a mobile science lab that travels across the United States to teach elementary and middle school students to teach and get students excited about science. Staff photo by Nicholas Handy

  • Students from the ConVal Regional School District participated in scientific experiments in the MilliporeSigma Curiosity Cube on Thursday to learn more about the periodic table of elements. The Curiosity Cube is a mobile science lab that travels across the United States to teach elementary and middle school students to teach and get students excited about science. Staff photo by Nicholas Handy

Monitor staff
Published: 12/5/2020 5:03:04 PM

When the state Commission to Study School Funding delivered its 180-page final report to Gov. Chris Sununu and the state Legislature last week, it came face to face with the political realities that have dogged the school funding debate since the New Hampshire Supreme Court declared decades ago that every student is owed an adequate education, no matter where they live.

The reaction in the State House – where all decisions are made about the state aid to public schools – will determine whether New Hampshire will finally reform a school funding system that perpetuates harsh disparities between rich and poor communities and deprives students most in need of an equal opportunity to learn.

“It’s important that the Legislature take this seriously,” said the commission’s chairman, Rep. David Luneau, a Hopkinton Democrat. “So many people in so many towns and so many students are being disenfranchised by the current funding system.”

The commission, established by the Legislature and given a $500,000 budget, was commended for its exhaustive year-long examination of school funding, the first hard look at widespread inequities in more than 30 years. But some veterans of campaigns for more school aid were disappointed, including the former superintendent of the battle-scarred Berlin School District, Corinne Cascadden, herself a member of the commission.

The report “unfortunately does not provide immediate hope and encouragement for financially strapped public school districts…and no property tax relief for all who can no longer afford to maintain their homes,” Cascadden wrote in a statement included in the report. She urged lawmakers not to “stop short of the finish line.”

“Doing nothing to make changes will continue to widen the gap among communities,” she wrote, “Again, we will continue to be the haves and the have-nots.”

The 17-member commission, in partnership with the Carsey School for Public Policy at UNH and a team of nationally recognized school finance experts, found that the state’s heavy dependence on local property taxes to pay for public schools is inequitable to both students and taxpayers. They proposed a new formula to calculate the cost of an adequate education – the key element in the school funding battles – based on student needs and each community’s ability to raise money to pay for its schools. State aid should be increased, the report said, and it should be distributed based on student performance and need, not on a flat per-pupil basis, as it is now. Districts with the highest concentration of economically disadvantaged students, English language learners and special education students have the fewest resources to support those students, the report said.

The commission noted repeatedly that New Hampshire ranks in the top 10 in per-pupil spending nationwide; and overall student performance ranks among the highest in the country. But, these are averages; the state’s current system of distributing aid on a per-pupil basis, is “extremely inequitable,” the report said. Overall, New Hampshire raises enough money through the statewide property tax and local taxes to fund its schools, the commission said. The problem is how that money is distributed.

The report arrives as the state’s full attention is focused on the health threat and economic damage of the ongoing coronavirus pandemic as well as an anticipated $200 million shortfall in state revenues. While more state aid for public schools has dominated discussion for years, the pandemic has brought new financial pressures – for technology and health and safety measures. Commission members and education advocates say that the pandemic has amplified long-standing inequities in public schools in property-rich and property-poor towns – the heart of the school funding debate.

‘A matter of will’

In the Legislature, political control of both the House and Senate flipped on election night from the Democrats – who were in power when the commission was established – to the Republicans. The reversal is sure to influence the response to the commission’s recommendations and impact the trajectory of any bills designed to change the current funding system.

The report’s fate in the newly elected Legislature “is more a matter of will than it is a matter of policy,” said State Sen. Jay Kahn, a Keene Democrat who was a member of the commission’s executive leadership. Using the state’s own data, analysts for the American Institutes for Research, assembled a compelling case to show that performance outcomes are lower among students in poorer communities that have lower property values and spend less on education. Communities that spend more have higher outcomes. In other words, money does matter.

The lone Republican lawmaker on the commission, Rep. Rick Ladd of Haverhill, a veteran of a previous effort in the Legislature to address school funding, was the only member who voted against accepting the report last week. Ladd was blunt in his remarks at the commission’s final meeting.

“I have really mixed feelings on this whole process,” Ladd told his fellow commissioners. He said he was unconvinced that the commission’s new formula would get the state any further than improvements in the current school funding formula, which has been in place since 2008.

“I feel the most important issue in front of us is the issue of dealing with the Legislature, and implementation … that is a real hurdle,” Ladd said. “We haven’t addressed really this revenue issue …where (does) the money come from?” he asked.

Various bills are now being drafted for the upcoming legislative session that will address aspects of the commission’s report, including a review of tax relief programs for low and moderate-income residents, which are long overdue for updating.

In a “minority response” to the report, Ladd recognized “disparity and inequalities encountered in property-poor communities” and proposed assistance through a grant program. In a telling close to his statement, Ladd said that any future education funding should be open to “alternative instructional settings,” including the “Learning Everywhere Program” supported by Education Commissioner Frank Edelblut that allows high school credits for alternative programs and was opposed by majority Democrats who said it undermined control of public school graduation standards.

Currently, about 69 percent of public school costs are funded through local education taxes (at widely varying rates) and the Statewide Property Tax (SWEPT). That tax is set at a uniform rate to cover what the state calculates in the cost of an “adequate” education, currently $3,709 per pupil (the average per-pupil cost is actually $17,000). Any surplus SWEPT money in excess of the cost of adequacy is returned to property wealthy towns – a practice the commission says should be stopped and the money used for tax relief.

Previous efforts to collect the surplus have failed under pressure from wealthy so-called “donor” towns, which “still hangs over any discussion,” said commission member Christine Dwyer, a former city council member in Portsmouth, one of the “donor” towns. Public support for any new funding system will require “serious consideration” of revenue sources other than the property tax, Dwyer said in her response to the report.

Public sentiment on the tax issue is far from decisive. According to a poll conducted for the commission by the UNH Survey Center in September, “There is uncertainty about how to raise funds for public schools,” the report said. “The reliance on local property taxes to fund public schools is undesirable, but there is no consensus on alternative forms of revenue.”

Lawsuit looms

Meanwhile, the pending outcome of the latest school funding lawsuit now before the state Supreme Court looms in the background. Since 1993, when the justices declared that the state must provide all school children with an “adequate” education, and pay for it, the court has emphasized that it is the Legislature’s obligation to fix the system. Education advocates contend they have still failed to do so.

Whatever the Supreme Court rules in what’s known as the “ConVal” case, the litigation provides the court with an opportunity to speak out on the issue, which it has not done in 13 years – and impact how the Legislature reacts to the commission’s findings and recommendations.

In the pending case, brought by four school districts in southwest New Hampshire and backed by 26 others, the Attorney General’s office has pushed back hard on a trial court judge, saying he overstepped his bounds – and had insufficient evidence – when he declared in June 2019 that the state’s formula for funding an “adequate” education was unconstitutional. The judge said the Legislature needed to go back to the drawing board; the state’s top lawyers countered that the judge – who dissected the state’s complex education funding history – was acting like a “super legislature.” A decision is anticipated before the end of the year.

While the commissioners said the state share of public education financing, which is the lowest in the nation, needs to increase, the members did not examine any new potential sources of revenue. They pointed to a 20-year-old study, conducted for then Gov. Jeanne Shaheen when she was in search of revenue options to the education funding crisis, which looked at the pros and cons but made no recommendations. The commission said it “believes that all possible revenue options should be open for discussion and debate.” But, “the question of which tax policy is best for public education funding (or any other public sector purpose for that matter) is a fundamental matter of legislative and public policy. ”

The commission did not endorse either of two financing models laid out in detail by their team of experts from the American Institutes for Research, but said they provide examples from which the Legislature can develop funding policy.

Both the AIR models hinge on the Statewide Education Property Tax and base their computations by redistributing the total amount of money now raised in New Hampshire in state and local education property taxes, which stands at about $2.3 billion.

The commission offered the Legislature a third example of school funding, now used in Massachusetts, a combination of state aid and a minimum mandatory contribution to school funding from local communities, based on their ability to pay by using income and property values.

The commission failed to resolve its own vigorous internal debate about whether the state Supreme Court, in a 2006 school funding case, involving the town of Londonderry, said the state had to pay the entire cost of an adequate education with state funds – no local taxes. That language, critics say, has led lawmakers to set the cost of “adequacy” unrealistically low.

Gov. Sununu’s appointee to the commission, Concord tax lawyer William Ardinger, has vociferously objected to what has become known as the “first and last dollar” interpretation, which he contends should not preclude the commission from making its own policy judgments. Ardinger, who has worked on education funding issues for years, says such a “rule” undermines the vested interest localities have in their schools through their decisions on property taxes for education financing.

Education reform advocates consider the “first and last dollar” language, the linchpin of school funding decisions and the Attorney General’s office has long agreed that the Londonderry standard means that the state is obliged to define a “constitutionally” adequate education, and pay for it.

For attorney John Tobin, who has advocated for school funding reform from the start, says the commission’s “lasting legacy” will be evidence – produced by the independent experts – that confirms the deep divide between property-rich and property-poor communities and the consequences for students, and taxpayers.

“The problem isn’t going away,” Tobin said. “Property tax hardships and inequities have to be addressed.”

A complete record of the commission’s work is available online through UNH’s Carsey School of Public Policy.

The full Opportunity For All series can be found at ConcordMonitor.com.

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