School Finance Reform:
Basic Facts & Estimates
(An update to our paper of November 1998)
Author:
Douglas E. Hall
Executive Director
New Hampshire Center for Public Policy Studies
In Association with:
Institute for Policy and Social Science Research
University of New Hampshire
April 2000
Introduction
Lack of essential data can hamper effective public discussion of school finance and education reform. In November of 1998 the Center prepared and released a brief compendium of data and estimates regarding public education and taxes. It was distributed to legislators, journalists, and members of the public. We were subsequently told that by collecting different pieces of information in one place, our paper provided useful reference material during policy discussions. This paper updates the previous one. The data are taken from authoritative sources and, where available, are more recent by two years. We hope these tables will again be useful to legislators, journalists, analysts, commentators, and the public.
A. Number of Students in Public Schools
|
1996 |
1998 |
|
|
Pre-School |
915 |
960 |
|
Kindergarten |
4,384 |
4,428 |
|
Elementary |
98,295 |
97,662 |
|
Middle/Junior High |
35,401 |
37,149 |
|
High School |
53,559 |
55,668 |
|
Total |
192,556 |
195,866 |
|
Source: "1996 Average Daily Membership Based upon Membership and Residence" and "1998 Average Daily Membership Based upon Membership and Residence", NH Dept. of Education, (Excel files) |
||
B. Spending Per Pupil
(Care must be used in using and interpreting these figures because "spending" does not include facility construction, debt service, transportation, or school meal programs.)
|
1996-97 |
1998-99 |
|
|
Elementary |
$5,256 |
$5,802 |
|
Middle/Junior High |
$5,348 |
$5,897 |
|
High School |
$6,308 |
$6,529 |
|
All Grades (K-12) |
$5,552 |
$6,021 |
|
Source: "Cost Per Pupil by District 1996-97", April 29, 1998; and "Cost Per Pupil by District 1998-99", February 9, 2000, NH Dept. of Education |
||
The following figure incorporates all costs and is total expenditures of all districts divided by the total number of students.
|
1996-97 |
1998-99 |
|
|
All Grades (K-12) |
$7,600 |
$7,864 |
|
Source: "Average Expenditures Per Pupil for All Grades 1996-97", April 22, 1998, and "Average Expenditures Per Pupil for All Grades 1998-99", February 9, 2000, NH Dept. of Education |
||
C. Equalized Valuation Per Pupil
|
1996-97 |
1997-98 |
|||
|
Lowest |
Greenville |
$132,421 |
Greenville |
$134,763 |
|
State Average |
$338,428 |
$359,132 |
||
|
Highest |
Newington |
$5,067,644 |
Newington |
$4,731,226 |
|
Source: "1997 Equalized Valuation Per Pupil, 1996-97", August 7, 1998, (with correction) and "1998 Equalized Valuation Per Pupil, 1997-98", October 18, 1999, NH Dept. of Education |
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D. Equalized Property Tax Rates for Schools
|
1997 |
1998 |
|||
|
Lowest |
Newington |
$1.44 |
Newington |
$2.66 |
|
State Average (Mean) |
$19.78 |
$16.77 |
||
|
Median Town |
$19.18 |
|||
|
Highest |
Charlestown |
$32.53 |
Troy |
$30.25 |
|
Source: "Comparison of 1997 School, County, and Municipality Tax Rates, NH Dept. of Revenue Administration (Excel file) and "Valuations, Property Tax Assessments and Tax Rates of School Districts, 1998-99, NH Dept. of Education, October 11, 1999 |
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E. Percentage of Property Taxes Collected Going to Schools
|
1997 |
1998 |
|||
|
Lowest |
Newington |
25.7% |
Waterville V. |
30.1% |
|
State Average (Mean) |
65.1% |
67.4% |
||
|
Median Town |
72.1% |
|||
|
Highest |
Orange |
89.4% |
Chatham |
95.2% |
|
Source: "Comparison of 1997 School, County, and Municipality Tax Rates", NH Dept. of Revenue Administration (Excel file) and "Valuations, Property Tax Assessments and Tax Rates of School Districts, 1998-99, NH Dept. of Education, October 11, 1999 |
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F. Aggregate Spending on Public Schools
(There is a small amount of double counting, especially of tuition from one school district to another.)
|
1996-97 |
1998-99 |
|
|
Current Expenditures |
$1,253,636,593 |
$1,392,457,817 |
|
Debt Service |
$65,947,675 |
$71,371,152 |
|
Facilities Acquisition and Construction |
$110,912,250 |
$63,095,080 |
|
Total Spending |
$1,430,496,518 |
$1,526,924,049 |
|
Source: "Total Expenditures for School Districts 1996-97", April 17, 1998 (with correction) and "Total Expenditures for School Districts 1998-99", February 9, 2000, NH Dept. of Education |
||
G. Aggregate Revenue for Public Schools
|
1996-97 |
1998-99 |
|
|
Local Property Taxes |
$1,092,042,021 |
$1,195,958,846 |
|
Tuition |
$64,585,674 |
$61,615,672 |
|
State Aid |
$94,541,923 |
$127,701,961 |
|
Federal Aid |
$44,334,256 |
$58,224,175 |
|
Sale of Bonds & Notes |
$107,337,003 |
$29,368,158 |
|
Other |
$43,684,770 |
$49,134,067 |
|
Total Revenue |
$1,446,525,647 |
$1,525,924,563 |
|
Source: "State Total Revenue of School Districts 1996-97", April 17, 1998, and "State Total Revenue of School Districts 1998-99", February 9, 2000, NH Dept. of Education |
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H. Raising Additional Money from Existing Taxes
The total of local property taxes raised for schools was $1,196 million in 1998-99. The following estimates provide a rough comparison with how much could be raised in 2000 by specified increases in existing state taxes. These estimates assume no change in economic behavior of taxpayers and, therefore, are probably slightly high.
|
Existing Tax and Rate |
Current Rate |
Specified Increase |
Would Raise |
|
Business Profits Tax |
8% |
1% |
$26 |
|
Business Enterprise Tax |
0.5% |
0.25% |
$47 |
|
Meals and Rooms Tax |
8% |
1% |
$19 |
|
Tobacco Tax |
52 cents/pack |
10 cents/pack |
$18 |
|
Interest & Dividends Tax |
5% |
1% |
$13 |
|
Insurance Tax |
2% |
1% |
$32 |
|
Communications Tax |
5.5% |
1% |
$8 |
|
Real Estate Transfer Tax |
0.75% |
0.25% |
$27 |
|
Beer Tax |
35 cents/gal |
10 cents/gal |
$3 |
|
Estate and Legacy Tax |
18% |
1% |
$2 |
|
Source: NH Center for Public Policy Studies estimates based on FY 2000 revenues published in "State of New Hampshire Financial Review for the Six Months Ended December 31, 1999, Fiscal Year 2000", NH Dept. of Administrative Services, March 7, 2000 |
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I. Per Capita Income in Towns
The requirement for the Department of Revenue Administration to annually calculate each town’s per capita income was repealed in HB117 of 1999. The 1996 figures are the last in this series.
|
1996 |
|
|
Lowest (Benton) |
$8,024 |
|
State Average |
$19,657 |
|
Highest (Waterville Valley) |
$48,792 |
|
Source: NH Dept. of Revenue Administration 1996 estimates |
|
J. Size of Some Mentioned Large Potential Tax Bases
|
Potential Tax Base |
Year |
Size ($ Billion) |
|
|
Total Equalized Assessed Valuation |
1998 |
$65.1 |
|
|
Gross State Product |
1998 |
$40.5 |
|
|
Total Personal Income |
1998 |
$34.6 |
|
|
Total Personal Spending |
1998 |
$30.7 |
(est.) |
|
Total IRS Adjusted Gross Income |
1997 |
$25.4 |
|
|
Total Personal Investments Producing Interest & Dividend Income |
1997 |
$25.8 |
(est.) |
|
Total Payroll of NH Businesses |
1998 |
$17.8 |
|
|
Total Retail Sales (for broad sales tax) |
1998 |
$16.5 |
(est.) |
|
Retail Sales (for typical state sales tax) |
1998 |
$9.5 |
(est.) |
|
Total Business Profits |
1999 |
$2.4 |
(est.) |
|
Capital Gains |
1997 |
$2.3 |
|
|
Source: NH Center for Public Policy Studies (compiled and calculated from various sources) |
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K. Estimated Tax Rates to Raise $825,000,000
Rates to raise greater or lesser amounts can be calculated proportionally. For example, raising $500 million would require 500/825 or .606 of the listed rate.
|
Type of Tax |
Estimated Rate |
|
Retail Sales Tax (with exemptions for food, pharmaceuticals, and items currently taxed) |
9.2% |
|
Personal Income Tax (no deductions) |
2.6% of Adjusted Gross Income |
|
Personal Income Tax ($5,000 per person deduction) |
3.25% of Adjusted Gross Income |
|
Statewide Property Tax (as in HB117/999) |
$11.60 per $1000 equalized valuation |
|
Statewide Property Tax ($40,000 homestead exemption) |
$14.20 per $1000 equalized valuation |
|
Value Added Tax (tax imposed on all goods and services at all levels) |
3.1% (rough estimate) |
|
Payroll Tax |
4.6% |
|
Source: NH Center for Public Policy Studies calculations based on data and estimates from various sources |
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