Last-minute House amendments seek to shore up ed funding for poorer districts

In a bid to spare the fiscal year 2024-25 budget from defeat in the narrowly divided House, two floor amendments, each with bipartisan support, were agreed to on Wednesday and will be offered to address the funding of public education at Thursday’s session of the chamber.

One amendment is co-sponsored by Republican Majority Leader Jason Osborne of Auburn and Democratic Minority Leader Matt Wilhelm of Manchester. The other is sponsored by Rep. Rick Ladd, R-Haverhill, who chairs the House Education Committee, and Reps. Tracey Emerick, R-Hampton, David Luneau, D-Hopkinton, and Mary Heath (D-Manchester.

The two amendments offer structurally similar plans though differ is some specifics and both depart significantly from the plans recommended by Gov. Chris Sununu and voted on by the House Finance Committee.

The governor and Finance Committee each make changes to the current school-funding formula. Both would increase the base per-pupil cost of an adequate education from $3,866 to $4,700 in 2024 and to $4,794 in 2025, and then by 2 percent annually. Differential aid for pupils eligible for free and reduced-price lunch, receiving special education services and learning English language would also increase. Likewise, both would increase extraordinary need grants targeted to districts with a disproportionate number of pupils in poverty and relatively low assessed property values.

In changing the school-funding formula, the Governor and the House Finance Committee would scrap two sources of state funding — relief aid and stabilization grants. Relief aid consists of grants of between $150 and $600 for each pupil eligible for free and reduced-price lunch based on the share of such pupils in the district and amounts to $17.5 million a year. Stabilization grants, amounting to $157 million a year, were introduced when the formula was changed in 2011 to offset a reduction in state aid.

In some 70 districts with relatively low property values and relatively high poverty rates, stabilization grants represent at least 40 percent of state aid.

Funding disparities

In the funding formula proposed by the governor and committee, base adequacy is the most heavily weighted factor, outweighing those factors that represent need as measured by the number of challenged pupils and the fiscal capacity of school districts as measured by equalized property valuation. Consequently, enrollment drives a disproportionate share of dollars to large and fast-growing districts and shortchanges those with fewer resources and greater needs.

For instance, in FY 2024 and FY 2025 preliminary estimates prepared by the Legislative Budget Assistant indicate that funding would increase for Amherst by $3.3 million, for Bedford by $7.3 million, for Exeter by $3.4 million, for Hanover by $1.9 million, for Hollis by 2.2 million, for Londonderry by $4.4 million, for Merrimack by $5.3 million, for Portsmouth by $375,000, for Salem by $6.4 million and Windham by $5.3 million.

Among the largest cities, funding is projected to increase for Manchester by $20.8 million, for Nashua by $16.9 million, for Dover by $7.5 million and for Concord by $5.1 million.

Meanwhile, funding will not increase at all for some of the most hard-pressed school districts in the state, with equalized assessed valuations well below the state average of $1,593,024. These include Allenstown, Berlin, Claremont, Charlestown, Epsom, Farmington, Franklin, Lisbon, Newport, Pittsfield and Winchester.

Both floor amendments would increase the share of differential aid applied to need. The cost of base adequacy would increase to $4,000, not $4,700, while differential aid for free and reduced-lunch pupils would increase to $2,100, for English language learners to $1,000 and for special education pupils to $2,100. These figures would increase 2 percent annually.

Relief aid also would be restored. In those districts where 48 percent or more of pupils qualify for free and reduced-price lunch an additional $400 would be allocated for each eligible pupil. Where between 12 and 48 percent of pupils qualify for free and reduced-price lunch an amount equal to $0.1111 of 0.01 percent would be allocated to each eligible pupil.

Extraordinary need grants would be based on the equalized property valuation per free and reduced-price lunch pupil with municipalities where that number is $1 million or less allocated $3,000 for each eligible student. Municipalities with equalized property valuation per free and reduced-price lunch pupil between $1 million and $6 million would be allocated $0.0006 for each dollar of difference between its equalized property valuation per free and reduced-price lunch pupil and $6 million for each eligible pupil.

Restored support
The amendment would also reintroduce fiscal disparity aid. Municipalities with equalized property valuation per pupil of $600,000 or less would be allocated $1,000 per pupil while those with equalized property valuation per pupil between $600,000 and $1.6 million would be allocated $0.00010 for each dollar of difference between its equalized property valuation and $1.6 million for each pupil. Municipalities with equalized property valuation per pupil of $1.6 million or more would receive nothing.

The amendment would restore stabilization grants as well. It provides that beginning in FY 2024 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.

Finally, in FY 2024 and FY 2025 a hold-harmless grant would be distributed equal to 100 percent of the difference between the grants awarded in each year of the biennium and the preliminary estimated grant for FY 2024.

Preliminary estimates prepared by the Legislative Budget Assistant indicate that state aid would increase for some of the most hard-pressed districts. Funding for Berlin would increase from $11.1 to $12 million, for Charlestown from $5.9 to $6.7 million, for Claremont from $15.1 to $17.1 million, for Farmington from $6.9 to $7.4 million, for Franklin from $9.8 million to $10.7 million, for Manchester from $82.2 to $95.9 million, for Nashua from $57.3 to $61.4 million, for Pittsfield from $5.1 to $5.6 million and for Winchester from $4.7 to $5.3 million.

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 more is 27 percent less than the $19,121 spent where the poverty rate is 5 percent or less. The disparity is matched only by Nevada among the 50 states.

Although either of the House amendments would somewhat narrow the funding gap, both far short of fulfilling the mandates of the NH Supreme Court in the Claremont litigation 30 years ago.

State aid will remain about a third of the total cost of public schools, leaving the balance to local property taxpayers, who will continue to pay differing tax rates from one municipality to another based on their disparate assessed valuations.

In 1993, the justices held that the state constitution grants every child a right to a “constitutionally adequate education” and binds the State to pay for that education. Four years later the court further held that, “To the extent the State relies upon property taxes to fund a constitutionally adequate public education, the tax must be administered in a manner that is equal in valuation and uniform in rate throughout the State.”

The first of two lawsuits asking the courts to reaffirm and enforce these orders goes to trial in Rockingham County Superior Court later this month with a second to follow later this year.