NH Public Policy
New Hampshire Center for Public Policy Studies

Report: Concord Monitor: School funding inequities haven’t changed since Claremont case

Report: School funding inequities haven’t changed since Claremont case

By LOLA DUFFORT

Monitor staff

Twenty years after the landmark state Supreme Court decision out of Claremont that established the state’s responsibility to help pay for school, a new report finds that inequities in education funding and property taxes have barely budged.

And with the state education aid formula tethered to enrollment and sending increasingly less aid to poorer communities, low-income, rural school districts with declining populations could be headed for a crisis, according to a New Hampshire Center for Public Policy Studies report released Tuesday.

“It was striking to us just how much large swaths of New Hampshire are going to find themselves in education no-man’s land as the enrollment declines and these demographic forces and economic forces play out,” said Steve Norton, the center’s director.

Researchers looked at each town’s per-pupil expenditures relative to the median expenditure both the year of the Claremont decision and last year. They found a two fold variation between the towns who spend the most and the towns who spend the least – then and now.

“The distribution of inequity has really not changed in the last 20 years – both from a (spending) side, and a property tax rate side,” said Greg Bird, the study’s co-author.

New Hampshire funds its schools mostly through local property taxes. But the state doles out a flat $3,600 per student to each school district – the so-called “adequacy” payment – plus an extra per-pupil amount based on student demographics. Schools get an extra $1,800, for example, for a student on free and reduced lunch.

The state’s adequacy formula once took into account how property-poor a town was and what its concentration of low-income students was. When the Legislature did away with those provisions, they installed stabilization grants – a $158 million annual program – to buoy those towns set to see the largest reductions in aid.

Stabilization grants are now being eliminated over a 25-year period, at a rate of 4 percent each year.

The report found that, based on the New Hampshire’s current system for funding education, the state is on track to spend $16 million less overall in five years.

Colebrook, Hinsdale, Greenville, Lancaster, Berlin, Northumberland and Newport are likely to see a reduction of more than 10 percent in state aid between 2017 and 2022, according to the report. Meanwhile, towns like Stoddard, Windham, Sutton, Dover, Greenland and Grantham are set to see increase in per-pupil aid.

The authors said the study raises questions about what role the state might play in helping communities transition to “a new education normal – smaller schools, consolidated districts, new models of learning.”

“And this is really outside the box, (something) that we’ve discussed is: could you craft incentives to get people to migrate towards other parts of the state that are maybe more economically vibrant?” Bird said.

Democratic Executive Councilor Andru Volinsky, who led the litigation for schools in the Claremont case, said the report shows that the state’s adequacy payment to schools is too artificially low.

“There’s a refusal to acknowledge the problems that result from our manner of funding schools which was only modestly modified by the Claremont decision,” he said.

Volinsky also said that the state, at one point, made real progress toward addressing inequities after the Claremont decision, but with a succession of tweaks to the funding formula, the Legislature has backtracked.

“The retrenching back to the old state of affairs didn’t happen overnight,” Volinsky said.

The subject of education funding is likely to continue to heat up. Districts who rely heavily on stabilization grants – for some, the program represents up to 50 percent of their state aid – mounted a failed legislative attempt to freeze cuts to the program this year, and some fear another lawsuit could come. Meanwhile, legislators have established a study committee to rethink the state’s funding formula.

The full report can be found online at nhpolicy.org.

Source: Concord Monitor

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