Why is NH still waiting for a school-funding fix?

State policymakers must ensure an adequate and fair solution

Recently, reports of New Hampshire being in the top 10 states for personal income came out, repeating many recent years in which our state is among the highest in the nation. This year, New Hampshire was seventh, with Rockingham County leading the way.

At the same time, the disproportionate ability of school districts to pay for education, which is based primarily on the local property tax, was brought home in a meeting of the Save Our Schools group in Manchester, one of a series being held across the state. It was a stark contrast to the personal income report.

John Tobin and Andru Volinsky, two attorneys who represented the property-poor towns in the Claremont lawsuits of the 1990s, continue to try to educate the population about the inequities of school funding in New Hampshire and the inadequacy of the state’s response to decisions of the NH Supreme Court in those lawsuits, which established that funding “an adequate education” was a state responsibility.

The response of the state was to come up with a formula that sends relatively little to every school district, way below the actual cost of education -— and even that amount has dwindled over recent years.

At the meeting, held at Manchester’s Memorial High School, speakers described the incredibly divergent ways in which towns are able to raise funds for education through the property tax. The highest amount raised per pupil is in Moultonborough, where the amount of highly valued property enables the town to raise more than $64,000 per student enrolled in public schools, with a tax rate far below the average. On the other hand, more than half of the towns are below the average level.

The ability to raise money is a function of the equalized value of property in towns and the local school tax rate, which is set based on the school budget in each school district.

For example, Manchester has $10.115 billion of equalized property valuation, and in the latest year studied had 13,968 students, meaning Manchester has $724,178 of property value for each pupil. The state average is $1,043,647 per pupil, so Manchester only had 69 percent of the state average. This is one-third less than Portsmouth, for example. Portsmouth raises $17,340 per pupil with only a $6.59 equalized school tax rate; Manchester raises $7,136 per pupil with an equalized school tax rate of $9.85.

Many other examples were cited, including towns like Claremont which has a tax rate in excess of $20 per $1,000 in order to raise a relatively low amount of money.

Of course, the ability to raise money is influenced by the willingness of the community to raise taxes. Were Manchester to raise school funds at the average rate in the state, it would raise a lot more than it does, although a tax cap and other constraints, including other demands of a big city, are felt by those in power to limit the ability of the city to fund schools.

Many of its citizens believe the city should be raising more money locally to do its part before asking the state for more funds, but that debate misses the larger point of how we fund schools in New Hampshire and why there isn’t a “we are all in this together” attitude.

Despite knowing about the problems related to adequate school funding, state administrations and legislatures have consistently failed to address the problem.

At the meeting, audience members pointed out that in New Hampshire, there is a myth of high-income, consistently good schools and the “rural” nature of the state. In reality, New Hampshire has urban centers like Manchester and Nashua, Claremont, Rochester and others that have all of the problems of cities nationally. People living in rural areas with high property values need to recognize the issues in the cities, or those problems will spread. Somehow, they should be made aware of the appropriateness of sharing the responsibility for the education of all of the schoolchildren in New Hampshire so that the state’s responsibility will be met meaningfully and mechanisms will not be invented to skirt the issue instead of addressing appropriately.

The unspoken alternative was another lawsuit, which is not as good as a legislative solution.

Adequate and fair school funding at the state level certainly is an issue that is complicated to understand, will be difficult to address and is needed sooner than later.

Brad Cook, a shareholder in the Manchester law firm of Sheehan Phinney Bass & Green, heads its government relations and estate planning groups. He can be reached at bcook@sheehan.com.

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