A look at the details in dueling House and Senate education-funding plans

There are some similarities, but plenty of differences

“No formula is perfect,” conceded NH Senate President Jeb Bradley in discussing the Senate’s planned method of distributing state aid to public schools in the next biennium. “Those that need the most will get the most,” he said. “That’s how we should be targeting state dollars.”

Like the plan adopted by the House in April, the Senate formula consists of three components — a base adequacy cost of $4,100 per pupil supplemented by differential aid of $2,300 for each pupil eligible for free and reduced price lunch – or FRPL — $2,100 for each pupil receiving special education services and $800 for each pupil learning English.

By contrast, the House plan allots $4,000 for base adequacy, $2,100 for each pupil eligible for free FRPL, $2,100 for each pupil receiving special education services, and $1,000 for each pupil learning English.

Both plans also include extraordinary need grants based on the equalized property valuation per FRPL pupil.

Municipalities where that number is $1.6 million or less would receive $8,500 for each eligible student in the Senate plan and $3,000 in the House plan. Municipalities with equalized property valuation per FRPL pupil between $1 million and $6.6 million would be allocated $0.0017 for each dollar of difference between its equalized property valuation per FRPL pupil and $6.6 million for each eligible pupil. The extraordinary need grants, as well as base adequacy and differential aid, would increase 2 percent annually.

Finally, both plans include a hold-harmless grant equal to 100 percent in the House plan and 102 percent in the Senate plan of the difference between the grants awarded in each year of the biennium and the preliminary estimated grant for the 2024 fiscal year.

Spending differences

But under the House plan, relief aid is restored for those districts where 48 percent or more of pupils qualify for FRPL, adding an additional $400 for each eligible pupil. Where between 12 and 48 percent of pupils qualify an amount equal to $0.1111 of 0.01 percent would be allocated to each eligible pupil. The House plan also includes fiscal disparity aid of $1,000 per pupil where the equalized property value per pupil is between $600,00 and $1.6 million.

Likewise, the House would restore the stabilization grants. It provides that beginning in the 2024 fiscal year municipalities would receive 85 percent of the stabilization grant, if any, that they were allocated in 2012. Stabilization grants would not be awarded to municipalities where the receipts of the statewide education property tax exceed the cost of an adequate education.

Originally, the Senate intended to spend $1.034 billion in FY 2024, $71.8 million more than authorized by current law, and $1.47 billion in FY 2025, but a late amendment added $11.5 million to the kitty. The House plan would spend $1.31 billion in FY 2024 and $1.051 billion in FY25 – $85 million more than current law – and $1.051 billion in FY2025. These figures include $363 million raised by the statewide education property tax.

Meanwhile, the total cost of operating public schools statewide in FY 2022-23 was $3.5 billion. In other words, state funding represents less than a third of the cost of public education. Local school property taxes contribute 60 percent and the statewide property tax contributes 10 percent, placing 70 percent of the cost of the public schools on property taxpayers.

The cost of base adequacy, at near $4,000, is a fraction of the average expenditure per pupil, which approaches $23,000. But it is the most heavily weighted factor in the formula for calculating and distributing state aid, outweighing those factors that address need as measured by the number of challenged pupils and the fiscal capacity of municipalities as measured by equalized property valuation per pupil. Both plans allocate more than half of total funding to base adequacy.

Consequently, state aid would increase the most for the largest and fastest-growing municipalities according to the preliminary estimates prepared by the Legislative Budget Assistant.

In FY 2024, funding for Manchester would rise 16.7 percent from $82.2 million to $96 million under the House plan and by 33 percent, to $109.7 million, under the Senate plan. In FY2025 the House would increase state aid to $98.1 million and the Senate to $112.3 million.

Funding for Nashua would increase 7.7 percent, from $57.3 to $61.4 million, under the House plan and 21.1 percent to $69.4 million under the Senate plan. In FY 2025, the House would increase state aid to $63 million and the Senate to $71.2 million.

Funding for Concord would increase 11.5 percent, from $21.9 to $24.4 million under the House plan, and 23.1 percent, to $27 million, under the Senate plan. In 2025, the House would increase state aid to $25 million and the Senate to $27.7 million.

Funding for Rochester would increase 10.7 percent, from $28.8 million to $31.9 million, under the House plan and 2 percent, to $29.5 million, under the Senate plan. In 2025, the House would increase state aid to $32.6 million and the Senate to $30.2 million.

Enrollments in these four cities range from about 3,600 in Rochester to over 11,000 in Manchester. In all four, the equalized property valuation per pupil is below the state average. And all four have relatively large shares of challenged students.

Smaller cities and towns, with enrollments ranging from just over 500 in Pittsfield to about 1,500 in Claremont, but otherwise with similar characteristics to their larger counterparts fare less well under both the House and Senate plans.

Funding for Berlin would increase 8.7 percent, from $11.1 million to $12 million, under the House plan and 1.8 percent, to $11.3 million, under the Senate plan. In FY 2025, the House would increase state aid to $12.2 million and remain at $11.3 million under the Senate plan.

Funding for Claremont would increase 13.3 percent, from $15.1 million to $17.1 million, under the House plan and 1.8 percent, from $15.1 million to $15.4 million, under the Senate plan. IN FY 2025, state aid would increase to $17.4 million under the House plan and return to $15.4 million under the Senate plan.

Funding for Franklin would increase 10 percent, from $9.8 million to $10.7 million, under the House plan and decrease 1.7 percent, to $9.9 million, under the Senate plan. In FY 2025, state aid would increase to $10.9 million under the House plan and remain at $9.9 million under the Senate plan.

Funding for Pittsfield would increase 10 percent from, $5.1 million to $5.6 million, under the House plan, and rise 1.8 percent, to $5.2 million, under the Senate plan. In 2025, state aid to the town would increase to $5.7 million under the House plan and remain at $5.2 million under the Senate plan.

Property tax burden

Last year, the Education Law Center reported that per-pupil spending in New Hampshire of $19,417 is well above the national average of $15,453. But the $13,923 per pupil spent in the school districts where the poverty rate is 30 percent or higher is 27 percent less than the $19,121 spent where the poverty rate is 5 percent or lower.

The disparity is matched only by Nevada among the 50 states.

In 2020, American Institutes for Research, consultants to the state Commission to Study School Funding, found that students in school districts with higher rates of poverty had lower-than-average test scores, graduation rates and attendance records.

Despite increasing state aid, neither plan is likely to redress the imbalance between the shares of education expenses borne by the state on the one hand and local property taxpayers on the other. Nor will either plan overcome the disparities in the educational opportunities from one school district to another or in the tax liabilities of property owners from one municipality to another.

Meanwhile, as the House and Senate resolve their differences in a conference committee, two lawsuits challenging the school-funding system they seek to shore up are making their way toward the NH Supreme Court.