Editorial: A tall order for school funding commission

Published: 1/26/2020 6:00:34 AM
Modified: 1/26/2020 6:00:21 AM

A new school funding commission will soon meet for the second time. Its mission? To suggest a constitutional way or ways for the state to fund public education. It is the third such commission to have been formed since the landmark Claremont school funding state Supreme Court rulings of a quarter-century ago.

The commission has 15 members but just two are Republicans. Several more seats remain to be filled and, if the commission hopes to win public support for its proposals, most or all of them should go to Republicans. The commission members, and certainly its veteran educators and lawmakers, are well-versed in the history of the state’s struggle to comply with court rulings that held, one, that public education is a state responsibility and, two, that the state taxes used to provide every student with an adequate education must be raised fairly and proportionately.

The state has never met that responsibility.

The gap in educational opportunities afforded children in property-rich versus property-poor districts is as large or larger than ever. Property owners in some towns pay tax rates to support education that are four or five times the rates those in other towns but still can’t raise enough money to provide kids with more than the basics.

The commission will labor under the weight of two grim facts. New Hampshire state government is, and long has been, last in the nation in its support for education. Spending on education is well above average, however, as are student outcomes, thanks to spending on the local level. Grim fact number two: New Hampshire’s property taxes are among the highest in the land, and the state relies more heavily than any other on them to fund government.

The breakdown varies a bit depending on who’s doing the math but local property taxes pay about 73% of school costs, the federal government 6% and the state just 21%. Most states pay at least half. Vermont pays 90%.

The reliance on local property taxes has caused problems that are inseparable from education funding, problems the commission should consider. The tax on a median-priced home at $244,900, according to the financial website Wallethub, is $5,388 or $449 per month. That’s roughly twice the national average.

Big tax bills, which increase faster than household income, make housing less affordable. They work against the state’s goal of enticing its youth to remain and make it hard for employers to hire workers. They are a disincentive for employers considering relocation, as are substandard schools with high teacher turnover.

Property taxes are regressive. They claim a much larger share of the income of the poor and middle class, whose major asset is their home, than they do of the wealthy. Property taxes are an annual fee not on what people own, the equity in their home, but on that plus what they owe the bank. In such cases they are a tax on debt, not wealth or income.

Tax equity, the disparities in local tax effort needed to fund schools, was a key issue in the Claremont decisions. It is something the commission should address.

As in the past, there will be a temptation to find a constitutional way to target aid to the state’s neediest districts without changing New Hampshire’s unique reliance on local property taxes to fund education. If the commission succumbs to that temptation it will have failed.

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