Seacoast schools thrive, North Country’s and others mired In funding crisis

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While the state of New Hampshire is rolling in revenue and has been for four or five years, property-poor school districts who won two landmark Supreme Court education decisions two decades ago are in crisis, while lawmakers reduce their state aid.

A study last year by the now-defunct NH Center for Public Policy Studies found the gap between what property rich and poor towns spend per pupil and their property tax rates has closed little despite nearly three decades of litigation and legislative action. 

In fact, the gaps between the wealthiest property-rich school districts and the most challenged property-poor districts has expanded, says one of the lawyers who helped five property-poor school districts win their lawsuit against the state in 1993 and again in 1997.

While school districts bordering lakes or the ocean or with high-value, second-homes laden resort towns are able to provide IPads for their students, those on the low end struggle to maintain current offerings, but have reduced staff and programs, and frozen teachers’ pay.

As the lead attorney for Claremont education lawsuit, Andru Volinsky, said at a recent event in Newport, these schools are in crisis and others are not far from it.

Discussions over school funding often degenerate into a fight over costs, teachers’ pay, etc. but Volinsky and another attorney who worked on the Claremont lawsuit, John Tobin, were careful to skirt that fight and instead focus on the property tax system that pays about 60 percent of the $3 billion plus cost of public education in New Hampshire.

Volinsky put it simply: “School funding is a math problem.”

And it really is a simple math problem — how much property value does a community have per pupil? — that has been all but ignored by lawmakers since the last major change in the school funding formula in 2011.

The change replaced a new formula that never went into effect that would have significantly increased the state’s monetary commitment.

The 2011 formula did away with much of the “weighting” that funneled more money to property-poor communities by providing additional money for students on free and reduced lunch, with special education designations, and whose native language is not English.

The change costs poor school districts as well as most cities a significant amount of state aid, so stabilization grants were created to ensure school districts received no less state money than they received before the new formula went into effect.

Three years ago, lawmakers decided to reduce the amount of stabilization grants by 4 percent a year, rationalizing that public school population is declining.

Stabilization grants were supposed to continue into perpetuity, but the reduction exacerbated budget issues for many property-poor districts on the edge.

Today school districts like Claremont, Newport, Berlin and most North Country schools, Franklin and Pittsfield, are in crisis with rising property tax bills and many cities sitting on the edge of crisis.

So how is this a math problem when school districts like Rye, Portsmouth, and other coastal and lake towns like Moultonboro, and Alton have more than enough money to spend on public education and offer their students more robust programs than school districts on the lower end of the spectrum?

The amount of equalized property value in a community is key to understanding how the education funding system has failed to meet the state’s obligation under the Claremont decisions to provide an adequate education to all pupils through a tax system with “proportional and reasonable” rates, as the constitution says.

For example, Rye has $2.1 billion in equalized property value, which means there is $3.31 million in property value per student, while Newport has $442.4 million in property value, resulting in $506,577 in property value per student,

That means that Rye has six-times the property value of Newport to draw from to fund each student.

The state average is $1.04 million in property value per student.

Yet the school portion of Rye’s tax rate is $6.20 per $1,000 of valuation versus Newport’s rate of $15.16 per $1,000.

Rye spends $19,535 per pupil while Newport spends $13,888. The state average is $15,310, while state aid is $3,636 per year although almost all communities average more than that because of targeted aid to poorer districts.

The current system relying on the property tax to fund most public education costs means it is much easier for property-wealthier districts to raise money for education than poorer districts.

Tobin said the financial commitment of property-poor towns is far greater just to meet basic school needs. He said taxpayers in property-poor towns are “heroes” for their commitment, as are teachers who work for lower salaries with fewer resources in property-poor districts.

The message was that the issue is not how much public education costs, but how the money is raised.

Under the current system, they implied property taxpayers in all but the property-wealthiest towns are victims of the system.

Costs issues are decided by local school boards and taxpayers, but the tax system needs a statewide solution.

The current system has economic implications for communities with businesses not likely to locate where property taxes are high and the school system is not as robust, they noted. If businesses decide the property taxes are too high, they may move to another town where taxes are lower.

The two attorneys emphasized the blame lies with state government, which has not created the fairer funding system the Supreme Court ordered with both political parties failing the test.

They urged people attending the meeting to ask questions of candidates running for office this year where they stand on school funding.

Several folks asked if another school suit may be on the horizon — some communities are meeting discussing what the next step might be — but Tobin said first they are looking for a legislative solution to the problem before attempting another costly and time consuming legal action.

However, if the last 20 years are the barometer, legal action or the very real threat of it, is the only way to bring about legislative change.

While lawmakers wait, more and more school districts will be in crisis and some communities will be in a death spiral that could take more than a few decades to begin to right.


 

Distant Dome by veteran journalist Garry Rayno explores a broader perspective on the State House and state happenings. Over his three-decade career, Rayno covered the NH State House for the New Hampshire Union Leader and Foster’s Daily Democrat. During his career, his coverage spanned the news spectrum, from local planning, school and select boards, to national issues such as electric industry deregulation and Presidential primaries. Rayno lives with his wife Carolyn in New London. Reach him at garry.rayno@yahoo.com

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