Understanding the Latest School Funding Formula

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Brief Description

This report, the 13th in our "Plumbing the Numbers" series on school finance, examines the formula for school aid that was passed by the NH legislature in June 2005. We show that the new formula achieves somewhat greater targeting of aid than in previous years. Property-poor districts with additional educational costs generally receive more money, while prosperous districts with greater tax bases for funding education receive lesser amounts. The new formula, like the one it replaced, distributes aid in a less targeted and more equitable manner than did the foundation aid formula in use through 1999 when total amounts of aid were only 1/7 of the current amount. On a proportional basis, wealthier towns have benefited the most from the 1999 reform. On an absolute basis, however, the poorer towns are provided considerably more state aid than their wealthier counterparts.