Need for school building aid exceeds appropriated funds in state budget
Report finds a fifth of NH public schools have not been upgraded in 35 years
While the state’s obligation to fund an adequate education plays out in court, the Legislature, with prodding from Governor Chris Sununu, began to mend the school building aid program, crippled by a moratorium lasting more than a decade.
A report by Carly Prescott of the NH School Funding Fairness Project found that a fifth of New Hampshire public schools have not been upgraded in 35 years, while asbestos and lead is present in nearly a quarter of all schools — when surveyed by the Department of Education in 2019, 39 school districts and 115 individual schools reported the presence of asbestos and/or lead in their buildings.
Moreover, the report finds that the need for investment in public schools far exceeds the funds appropriated in the FY 2024-25 budget.
Since 1955, the state has met between 30 percent and 60 percent of the cost, exclusive of debt service, construction, renovating and furnishing public schools. The grant amount is determined by the median family income and equalized property valuation per pupil of the municipality, which averages about 38 percent.
For years the program operated without either prioritizing applications or limiting expenditures. More than 150 of New Hampshire’s 461 schools were built between 1950 and 1970. Between 1950 and 1990, the population more than doubled, swelling from 533,242 to 1,109,252. By the turn of the century, these schools — along with the 128 schools built before 1950 — began needing renovation or expansion, causing the program to grow out of control.
The NH School Funding Fairness Project report found that more than 140 schools were upgraded in some respect in the 1990s and more than 100 in the 2000s — 30 to 40 years after they were built. Additionally, nearly 70 percent of students attend schools that have been renovated since 1990.
A growing backlog
The moratorium was introduced as a temporary measure in 2008, sparing projects underway, then reaffirmed in 2011. Only three projects in Salem, Allenstown and Rumney were funded after the moratorium was in place. By 2017 when lawmakers contemplated lifting the moratorium, there was a backlog of 70 projects with a total cost of about $650 million.
In 2022, when the moratorium was lifted and building aid was capped at $50 million a year, more school districts than ever before applied for building aid. These included Rochester, Colebrook, Monadnock, Concord, Litchfield, Derry Cooperative, Amherst, Hampstead, Hudson, Barnstead, Thornton, Monroe, Kearsarge Regional, Brookline and Hollis-Brookline.
All together, these projects requested building aid of $227.7 million.
This year the Department of Education approved and ranked projects in 17 school districts — using criteria such as school security, unsafe conditions, operational inefficiencies and obsolescence — with a total estimated cost of $564.4 million and $227.7 million in aid.
Once the state approves a project, Prescott explained, the school district must vote by a two-third majority to borrow the funds to pay for it by issuing a bond and servicing the debt. Since the financing increases local property taxes, the issue is often contentious, particularly in municipalities with relatively low property values and high tax rates.
Meanwhile, the state effectively reimburses the school district for its share of the debt service in the form of a grant amounting to between 30 percent and 60 percent of the principal payments.
As a result, all but 30 school districts were receiving grants before the moratorium, or are still receiving grants for projects approved and undertaken before 2011. Altogether these grants — called the “tail” — amount to $694.4 million, and the state is scheduled to pay districts $117 million through 2041.
While the Legislature raised the cap from $50 million to $86 million for FY 2024-2025, $44 million of this appropriation will be applied against the tail, leaving about $43 million for new projects.
The top five projects include a new kindergarten and elementary school in Rochester at $33.6 million with $20.2 million in aid; expansion and renovation of the elementary-middle school in Colebrook, costing $16.4 million with $9.9 million in aid; closure and consolidation of one elementary school and renovation and expansion of three others at $35.2 million with $19.3 million in aid; construction of a new middle school in Concord at $176.2 million with $70.5 million in aid; and construction of a new elementary school in Litchfield at $32.6 million with $9.6 million in aid.
The unprecedented applications for building aid triggered by lifting the moratorium indicated the need to invest in the public schools and the willingness of communities to pay their share. And the Legislature took a small, first step toward putting the building aid program on a sound fiscal footing.