Education / School Finance

As the State has struggled with how best to finance its public schools, we have produced relevant data and projections regarding school finance reform for the state legislature, news media, and local officials. We have critiqued existing costing and distribution formulae and have developed alternatives. We have maintained and publicized our own independent fiscal projections. We plan to continue this project as long as the long-term future of school finance is uncertain.

• Jan 2011 SBA Presentation (01-28-2011)

  Under Construction: Improving New Hampshire’s School Building Aid Program

  New Hampshire Center for Public Policy Studies

  January 2010 Powerpoint Presentation

• Under Construction: Improving New Hampshire's School Building Aid Program (01-31-2011)

  Building a new school is a hefty financial undertaking, especially for small districts that lack large tax bases. For more than half a century, New Hampshire has helped local school districts pay for new construction through the School Building Aid program.

  But in recent years, the program’s cost has increased at a rate far exceeding the rest of the state budget, raising concerns about how to maintain this service to local school districts. Requests from districts will exceed $50 million a year in the coming biennium, up from $25 million in FY2003.

  In this report, the Center provides a brief history of New Hampshire's School Building Aid program, a review of its policy goals, an examination of how it has doled out money to school districts in recent years, and suggestions for policy reforms.

   

• New Hampshire’s Latest School Funding Formula (04-17-2009)

  In October 2008, the Supreme Court ruled that in enacting SB 539 (2008) the State has met the mandate to define an adequate education.  This report explores the evolution of this legislation and provides and comparative analysis to the pervious school funding formula. 

  SB 539 in its entirety would increase state aid to schools; larger communities are the primary beneficiaries. The total estimated state cost in FY2010 will amount to approximately $941 million, $50 million more than the state’s commitment in FY2009. In aggregate, the result of this plan is an average state grant of $2,943 per pupil to cover the cost of an adequate education. This represents an increase of 11% over the average per pupil grant under the previous school funding formula for fiscal year 2009 of $2,650. 

   Compared to current state-wide average cost per pupil – $11,416 – the per pupil state grant under the SB 539 plan plus the statewide education property tax (SWEPT) contribution will cover less than half that cost, at $4,793 per pupil, on average. Although this represents an increase in the state support over the previous school funding formula, local communities will maintain their significant role in funding local schools.
   
• Plumbing the Numbers #14 School Finance Reform: Back to Where We Started (02-01-2007)

  It now appears that the laws and programs to reform school finance, enacted beginning in 1999 to comply with the Claremont II decision, have had no effect on pupil equity, as measured by per pupil spending. Among the highest spending districts, spending is now actually a little higher relative to the median than it was in 1999. Also, while the new laws enacted in 1999 initially did affect taxpayer equity and resulted in somewhat more equal tax rates for schools among towns, much of that change has been eroded away in the past six years. If current trends continue, the variation in tax rates will be just as great in two years as it was in 1998. In essence, measured against the two goals of the Claremont II decision, the state?s school finance reform has had little impact, and we are back to where we started in 1999.

• Understanding the Latest School Funding Formula (08-01-2005)

  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.

• Plumbing the Numbers #12: More and Less: How the House's Education Equity Index Redistributes State Aid (05-01-2005)

  This is the twelfth paper in the NH Center for Public Policy Studies’ “Plumbing the Numbers” series of reports on education finance. The paper analyzes data contained in a spreadsheet developed in the NH House as part of the vote on HB 616 in April 2005. The analysis compares that data to current law.

• Plumbing the Numbers #11: Which Target? State Aid and School Spending 1999 to 2004 (04-01-2005)

  This paper, the 11th in our Plumbing the Numbers series, tracks education spending since the state-aid reforms of 1999 and shows that aid formulas have helped reduce the disparity in tax rates across the state but have not reduced disparities in spending per pupil. The gap between a relatively low-spending district and a high-spending district can exceed $5,000 per pupil or $100,000 per classroom. The analysis shows that local spending decisions have been unrelated to a town’s wealth, tax base, tax rate, or state-aid grant. Overall, schools increased their spending by 5.6 percent between 2003 and 2004 and property taxes for education rose 7.1 percent.

• Plumbing the Numbers #10: Understanding State Aid, FY 05 & FY 06 (12-01-2004)

  This paper, the 10th in our Plumbing the Numbers series, is a lay-person’s guide to New Hampshire’s system of paying for education that explains the school-aid statute the legislature adopted in 2004. The paper first shows how the New Hampshire Department of Education determines each town’s “cost of adequacy” for the town and then illustrates why some towns receive cash grants and others send a portion of their statewide property tax revenues to the state for redistribution. The paper includes graphs to illustrate how the formula works and tables showing exactly how each town fares under the current formula. The paper also examines the relationship between cash grants and tax rates, school spending per pupil, and residents’ incomes.

• Projected Revenue Gap in Education Trust Fund (08-01-2000)

  This table projects annual operating deficits in the State's new Education Trust Fund for years 2001 through 2003 based on preliminary results for 2000.

• What Happens if Nothing Happens April 1 - June 30, 1999 (02-01-1999)

  This report outlines seven specific problems that may occur shortly after April 1 if no constitutional solution to the funding problem presented by the Supreme Court's Claremont II ruling is found. It also provides an update regarding the six problems previously identified in the Center's July 1998 report listed above.

• What Funding Does the Proposed CACR 45 Guarantee? (09-02-1998)

  The legislature considered many proposed amendments to the state constitution to remove some or all of the impact of the court's Claremont II decision. One of these, CACR 45, was supported by the Governor, the President of the Senate, and the Speaker of the House. This paper pointed out flaws in the language of the amendment that had not initially been understood. The amendment was defeated in the New Hampshire House on September 10, 1998.

• What Happens If Nothing Happens (to New Hampshire's local school property tax?) (07-01-1998)

  State leaders and the state's news media both misinterpreted the Claremont II decision to mean that "nothing bad will happen until April 1, 1999." This paper was an attempt to highlight possible important problems that would begin to occur before the supposed April deadline. Key public and private sector leaders were sources of information for the report. When it was complete it was released to key individuals and subsequently to the press. The Governor then asked the State Treasurer and Commissioner of Revenue Administration review our report and report to her. They confirmed the problems and two bills were passed as emergency measures in the early days of the 1999 legislature to provide some "quick fixes" to them.

• Warning: Why Average Isn't Average - Simplistic Statistics Can Be Misleading in Measuring for Accountability in Education (06-01-1998)

  The Claremont II decision has added additional impetus behind using the state's achievement test results as a means of evaluating how well or poorly individual districts or schools may be performing. This paper was prepared to inform key leaders of the way in which gross test result statistics can be misleading. Inappropriate use of such data could lead to adoption of potentially damaging policies at either state or local level.

• Lessons from New Hampshire: What We Can Learn from the History of the State's Role in School Finance, 1642-1998 (04-01-1998)

  This paper was written to draw attention to a largely unknown history of New Hampshire's prior efforts at education and education funding reform. Lessons were drawn from that history. The paper was distributed to all state legislators.

• Lessons from Elsewhere: What New Hampshire Can Learn from Others' Struggles to Define and Cost Out Educational Adequacy (04-01-1998)

  The Claremont II decision of the Supreme Court resulted in the need for the state to create a definition of "adequate education" and to then provide for its funding. This requires the state to adopt a method of costing the definition of "adequacy". The Center realized that there was little information available on how to do this and organized a symposium for state leaders on the topic, inviting the New Hampshire Charitable Foundation, Dartmouth College, the Josiah Bartlett Center for Public Policy Studies, and the University to New Hampshire to co-sponsor the event. The Center also commissioned the writing of this paper that pulls together the most recent thinking on this topic from researchers. Later in 1998 this paper and other material from the symposium became the basis for a major report of the National Conference of State Legislatures.

• Bibliography on Defining and Costing Out "Educational Adequacy" (02-02-1998)