The document discusses New Hampshire's school funding system and its reliance on local property taxes. It notes that the current system is unconstitutional, inequitable, and places undue burden on property taxpayers. Significant gaps exist between the actual costs of education and the level of funding deemed adequate by the state. The system disadvantages property-poor districts and can impede community development. Reforms are needed to create a more equitable and sustainable school funding model.

1. School Funding and Property Taxes

2. Local property taxpayers face greater and
greater strains on their budgets.
2

3. School
Funding
and
Property
Taxes
Overview
• New Hampshire’s
Constitutional
Responsibilities
• Role of Property Taxes in
Funding Schools & Resulting
Inequities
• Enormous Gap Between State
Aid & Actual School Costs
• Consequences & Implications of
New Hampshire’s Current
School Funding System
• Possible Long- and Short-Term
Reforms
3

4. School Funding and Property Taxes
Overview
• Taxpayers and students are not treated
equitably or fairly.
• The problem is getting worse.
• The current system is unconstitutional.
4

5. New Hampshire’s Constitutional Responsibilities
The New Hampshire Supreme Court’s decisions in the Claremont
case establish two fundamental responsibilities:
• The State of New Hampshire has a duty to pay for the cost of a
constitutionally adequate education for every K-12 public school
student.
• The taxes that the State of New Hampshire uses to pay for this
education must have a uniform rate across the state.
Is the State meeting these responsibilities?
5

6. The Scope of an “Adequate Education”:
Expansive and Future-Oriented
“Mere competence in the basics—reading, writing, and
arithmetic—is insufficient in the waning days of the twentieth
century to insure that this State's public school students are
fully integrated into the world around them. A broad exposure
to the social, economic, scientific, technological, and political
realities of today’s society is essential for our students to
compete, contribute, and flourish in the twenty-first century.”
Claremont II, 142 N.H. at 474
6
New Hampshire’s Constitutional Responsibilities

7. The Resources Needed to Achieve Adequacy May
Differ from District to District
“We emphasize that the fundamental right at issue is
the right to a State funded constitutional adequate
education. It is not the right to horizontal resource
replication from school to school and district to district.”
Claremont II, 142 N.H. at 473-474
7
New Hampshire’s Constitutional Responsibilities

8. The Connection Between Defining and Funding
an Adequate Education
“Any definition of constitutional adequacy crafted by the political
branches must be sufficiently clear to permit common
understanding and allow for an objective determination of costs.
Whatever the State identifies as comprising constitutional
adequacy it must pay for. None of that financial obligation can be
shifted to local school districts, regardless of their relative wealth or
need.”
Londonderry School District v. State of NH, 154 N.H. at 162 (2006)
8
New Hampshire’s Constitutional Responsibilities

9. The Constitutional Standard for Using
Property Taxes for School Funding
“To the extent that the property tax is used in the future to fund the
provision of an adequate education, the tax must be administered in a
manner that is equal in valuation and uniform in rate throughout the
State.”
Claremont II, 142 N.H. at 471
9
New Hampshire’s Constitutional Responsibilities

10. School
Funding
and
Property
Taxes
• New Hampshire’s Constitutional
Responsibilities
• Role of Property Taxes in
Funding Schools & Resulting
Inequities
• Enormous Gap Between State
Aid & Actual School Costs
• Consequences & Implications of
New Hampshire’s Current
School Funding System
• Possible Long- and Short-Term
Reforms
10

11. 2019-20 Revenue of NH School Districts
$3.36 billion
11
Local Property
Tax
62%
SWEPT
11%
Lottery
3%
Other State
Adequacy Aid
15%
Other State Aid
3%
Federal Aid
5%
Tuition, Food,
Other
1%

12. Change in School District Revenue, 2009 - 2019
12
$528.8M
$24.7M $18.4M $13.3M $4.3M
$0
$100
$200
$300
$400
$500
$600
Local Taxation State
Adequacy Aid
Federal Funds Tuition, Fees,
Other
Other State Aid

13. State’s Share of School Funding in NH
is the Smallest in the Country
Percent of school revenue from state sources, 2017-18
13
0%
20%
40%
60%
80%
100%
New
Hampshire
Illinois
Sout
h
Dakot
a
Missouri
Pennsylvania
Maine
Nebraska
Virginia
Nevada
New
York
Massachuset
t
s
Arizona
Rhode
Island
Texas
New
J
ersey
Florida
Nort
h
Dakot
a
Connect
icut
Louisiana
Maryland
Georgia
Colorado
Ohio
Wisconsin
Mississippi
Sout
h
Carolina
Oklahoma
Tennessee
Ut
ah
Arkansas
Oregon
Mont
ana
Kent
ucky
Alabama
Delaware
Iowa
Nort
h
Carolina
California
West
Virginia
Wyoming
Indiana
Alaska
Washingt
on
Kansas
Michigan
New
Mexico
Minnesot
a
Idaho
Hawaii
Vermont
If SWEPT is considered
st at e aid; act ually, it is
relabeled local t ax

14. The key concept for
comparing school tax rates:
Equalized value per pupil
How much property value
is available in a town
to be taxed to support
each student’s education?
Role of Property Taxes & Resulting Inequities
14

15. Role of Property Taxes & Resulting Inequities
Property Value
Tax Rate
(Per Thousand)
Revenue Raised
$1,000,000 $10.00 $10,000
$400,000 $10.00 $4,000
15
It’s simple math.

16. Role of Property Taxes & Resulting Inequities
Property Value
Tax Rate
(Per Thousand)
Revenue Raised
$1,000,000 $10.00 $10,000
$400,000 $25.00 $10,000
16
It’s simple math.

17. Role of Property Taxes & Resulting Inequities
There would be no problem…
IF
The distribution of property value
AND
the distribution of students
were approximately the same.
They are not.
17

18. Role of Property Taxes & Resulting Inequities
Equalized Valuation and Tax Rates for Select NH Schools, 2019-20
Town Pupils Equalized Value
Equalized
Value/Pupil
Equalized
School
Tax Rate
Amount
Raised Per
Pupil
Moultonborough 453 3,610,712,814 7,967,151 3.62 28,841
Sunapee 376 1,490,567,633 3,962,273 7.74 30,668
Portsmouth 2,217 6,784,387,454 3,060,538 6.11 18,700
Salem 3,637 5,758,775,055 1,583,403 11.03 17,465
New Hampshire 173,206 207,866,493,470 1,201,688
Merrimack 3,840 4,097,905,748 1,067,163 15.36 16,392
Concord 4,227 4,192,929,768 991,938 14.43 14,314
Milford 2,227 1,790,063,077 803,638 17.09 13,734
Newport 802 477,089,001 594,911 16.12 9,590
Berlin 1,041 504,908,695 485,251 12.68 6,153
18

19. Manchester and Select Cities and Towns
Town
Equalized
Val/Pupil
Total
Education
Tax Rate
Ed. Tax
Difference/
$200,000
home
Elementary
Spending
Per Pupil
Spending
Gap x 20
Students
Manchester 858,280 9.24 12,201
Goffstown 849,933 13.60 872 14,399 43,963
Bedford 997,595 12.82 716 14,499 45,952
Londonderry 1,227,246 13.45 842 18,621 128,399
Derry 752,472 15.20 1,192 16,739 90,750
Nashua 1,039,335 10.27 206 15,241 60,791
Portsmouth 3,060,538 6.11 (626) 20,159 159,165
19

20. Role of Property Taxes & Resulting Inequities
Which Home Has the Larger Property Tax Bill?
“303 year old, 4+ bedroom colonial
has… back deck [that] overlooks your
own private sanctuary and views of
Great Bay…has an attached Carriage
House, 2 Car Garage, beautiful
wainscoting and chair rails, along with
wide pine floors.”
“Older mobile home with updates
offering 2 bedrooms, one bath,
covered patio area and detached
garage.”
20

21. Role of Property Taxes & Resulting Inequities
Which Home Has the Larger Property Tax Bill?
Newington, NH
2020 market price: $879,000
2019 assessed value: $492,880
2019 school property tax: $1,360
21
Charlestown, NH
2020 market price: $82,900
2019 assessed value: $56,100
2019 school property tax: $1,464

22. School
Funding
and
Property
Taxes
• New Hampshire’s Constitutional
Responsibilities
• Role of Property Taxes in
Funding Schools & Resulting
Inequities
• Enormous Gap Between State
Aid & Actual School Costs
• Consequences & Implications of
New Hampshire’s Current
School Funding System
• Possible Long- and Short-Term
Reforms
22

23. Calculation of State Adequacy Aid for Select Districts
2020
Base Supplements
Town
Each
Pupil
Low
Income
Special
Education
English
Learners
Below
Proficient
Cost of
“Adequate
Education”
Adequacy
Per Pupil
Actual
Spending
Per Pupil
$3,709 $1,854 $1,995 $726 $726
Berlin 1,064 628 249 3 15 $5,621,184 $5,283 $16,779
Claremont 1,678 923 305 17 14 $8,562,842 $5,103 $16,755
Concord 4,210 1,646 696 362 44 $20,350,964 $4,834 $15,658
Derry 4,749 1,148 1,013 63 77 $21,864,992 $4,604 $15,336
Haverhill 581 235 113 3 8 $2,823,193 $4,859 $18,166
Hopkinton 968 82 174 1 16 $4,102,529 $4,238 $17,175
Manchester 12,957 7,806 2,522 1,992 136 $69,106,135 $5,333 $12,389
Newport 808 478 205 16 15 $4,313,644 $5,339 $15,960
Pittsfield 563 307 138 3 5 $2,936,990 $5,217 $16,442
23

24. What Does an “Adequate” K-12 Education Cost?
An Example
The State of New Hampshire said that, for Pittsfield’s 581
students, an adequate education should cost $2,690,333
or $4,630 per student in 2018-19.
The Pittsfield School District budget for 2018-19 was
$10,302,402 or $17,732 per student.
So let’s pare that budget down…..
24

25. Eliminate 5 of the 16 teachers at the elementary school
Eliminate all art, music, and physical education classes in all grades
Eliminate all school nurses and any medical support
Eliminate all regular and special education transportation services
(parents to transport their children to and from school)
Eliminate one of the two office secretaries at the elementary school
Eliminate one of the two office secretaries at the middle/high school
Eliminate teachers for business ed, family & consumer science, and health
Eliminate one of four science teachers at the middle/high school, thus eliminating
some labs and electives
Eliminate all building and grounds maintenance and repairs
Eliminate student participation in Concord Regional Technical Center classes
Eliminate all foreign language courses
Eliminate both counselor/behavioral professionals and support staff
Eliminate four of eight custodians: building cleaning only twice per week
So let’s pare that budget down…
25

26. Eliminate health insurance and other benefits in current teacher contract
Eliminate all field trips
Eliminate all athletic programs: soccer, basketball, softball, and baseball
Eliminate the district reading specialist
Eliminate 34½ paraprofessional positions, including special ed teacher aides
Eliminate purchase of equipment, supplies, books, subscriptions, technology
Eliminate ESOL program (English for speakers of other languages)
Eliminate all substitute teachers, thus requiring students to be dismissed
Eliminate three special education teachers
Eliminate provisions for teacher development courses, workshops
Eliminate mentor teachers who support new teachers
Eliminate all technology personnel, equipment, training, software, etc.
Eliminate consulting specialists such as vision specialists and psychologists
Eliminate travel reimbursement for training events, meetings, home visits, etc.
So let’s pare that budget down…
26

27. Eliminate all co-curricular programs (clubs, activities, student council, etc.)
Eliminate the summer recreation program
Eliminate all guidance personnel
Eliminate substance abuse counselor
Eliminate speech/language, PT, OT, and vision services for special needs students
Eliminate stipend for teachers’ summertime work on innovation and development
Eliminate stipends for teacher leaders
Eliminate all librarians and media center staff and close media centers
Eliminate school board stipends
Eliminate school board expenses, including lawyers and auditing services
Reduce time of superintendent to one day per week
Eliminate all photocopiers and their supplies
Eliminate maintenance of athletic field
Eliminate one school principal, leaving only one for both school buildings
Eliminate all office incidentals: postage, supplies, advertising, etc.
So let’s pare that budget down…
27

28. What Does an “Adequate” K-12 Education Cost?
An Example
With the above reductions…
• Most “core” K-12 classrooms are maintained
• Class size averages 29 students/teacher
• Budget is now $5,289,610
Now cut to the State’s “adequacy” level of $2,690,333
• Nearly everything else has been eliminated, so now eliminate
nearly half of the remaining teachers
• Class size averages 60 students/teacher
How does anyone believe that this will provide an
adequate education for Pittsfield’s 581 students?
28

29. School
Funding
and
Property
Taxes
• New Hampshire’s Constitutional
Responsibilities
• Role of Property Taxes in
Funding Schools & Resulting
Inequities
• Enormous Gap Between State
Aid & Actual School Costs
• Consequences & Implications
of New Hampshire’s Current
School Funding System
• Possible Long- and Short-Term
Reforms
29

30. Current System Impedes
Economic Development in Property-Poor Towns
30
Berlin Portsmouth

31. Current System Works against Attracting or Keeping
Young Families or Developing Workforce Housing
31

32. School
Funding
and
Property
Taxes
• New Hampshire’s Constitutional
Responsibilities
• Role of Property Taxes in
Funding Schools & Resulting
Inequities
• Enormous Gap Between State
Aid & Actual School Costs
• Consequences & Implications of
New Hampshire’s Current
School Funding System
• Possible Long- and Short-
Term Reforms
32

33. Commission to Study School Funding
A Path Toward a More Fair and More Sustainable System
• Created in October 2019 as part of FY 2022-23 budget agreement
• Charged with reviewing “the education funding formula and [making]
recommendations to ensure a uniform and equitable design for financing the cost of
an adequate education for all public school students in pre-kindergarten through
grade 12 in the state.”
• 16 members, including:
o 6 legislators (Luneau, Myler, Kahn, Ames, Ladd, Morgan; Heath – alt.)
o 10 members of public (Ardinger, Beardmore, Bergeron, Cascadden, Dwyer, Estabrook,
Huard, Ryan, Tremblay, Zanchuk)
• Received an appropriation of $500,000
o Engaged UNH Carsey School of Public Policy to provide staff & logistical support
o Engaged American Institutes for Research to conduct detailed analysis of school funding in
NH
33

34. AIR Report: Clear Diagnosis of the Problem
“The state’s current system is inequitable from both
student and taxpayer perspectives. The districts
serving the highest proportion of students who are
economically disadvantaged spend less, on average,
compared with districts serving the fewest such students.
Moreover, the districts with the least property wealth per
student impose the highest local education tax rates to be
able to fund their children’s education.”
Equity and Adequacy of New Hampshire School Funding
American Institutes for Research, August 2020
34

35. AIR Report: A Possible Path Forward
Distribution of Education Aid
o AIR’s education cost model (ECM) seeks to distribute nearly the entire sum
of state and local education spending (~$2.9B; 2018)
o ECM aims to distribute aid to enable every district to achieve statewide
average outcomes across three measures: assessment scores,
graduation rates, and attendance rates.
o ECM identifies the key factors that affect those outcomes and assigns
“weights” to those factors to distribute funding.
Base per student amount (FY 2020): $6,105
Additional weights for: Free & reduced price lunch
English language learners
Size of enrollment
Age/grade profile
35

36. AIR Report: A Possible Path Forward
Revenue Generation
• Maintain existing revenue sources flowing to Education
Trust Fund
o Examples: portion of BPT & BET, M&R, RETT, et. al.
o Approximately $600 million annually
• Fund remaining $2.35 billion through either:
o Single statewide property tax @ rate of $12.04 OR
o Single statewide property tax @ rate of $7.24 plus
“minimum local contribution” of $5.00
Additional funds flowing into Education Trust Fund would
mean lower statewide property tax rates
36

37. Without Legislative Action, State Education Aid
Projected to Decline $90 Million in Coming Year
37
Expiration
of Fiscal
Disparity
Aid
Expiration
of
Additional
Assistance
General
ADM
declines
due to
pandemic
F&RPL
ADM
declines
due to the
pandemic
Total Decline
$90 million

38. Preserving Progress toward a
More Equitable Funding System
ADDITIONAL AID
• Designed to assist cities & towns with concentrations of low-income students.
o FRPL concentration > 48% = $350 per student
o FRPL concentration < 48% but > 12% = phase out range
o FRPL concentration < 12% = $0 per student
• Provided $11.7M in funds in FY2021
• 199 municipalities (over 70 percent) received average of $61,400
FISCAL CAPACITY DISPARITY AID
• Intended to help communities with comparatively low property values
o EQVP < $350,000 = $1,750 per student
o EQVP > $350,000 but < $1 million = phase out range
o EQVP > $1 million = $0 per student
• Provided $47.5M in funds in FY2021
• 98 municipalities (40 percent) received average of nearly $485,000
38

39. Without Legislative Action, State Education Aid
Projected to Decline $90 Million in Coming Year
Property-Poor Communities Could See Steepest Rate Hikes
to Make Up the Difference
39
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
$4.50
$5.00
$0 $1 $2 $3 $4 $5 $6
Pot
ent
ial
Rat
e
Increase
($1/
$1000)
Assessed Value Per Pupil (in millions of dollars)
CORNISH
Assessed Value per Pupil: $5.8 million
Potential Rate Increase: $0.00
TROY
Assessed Value per Pupil: $460,646
Potential Rate Increase: $4.60

40. Substance & Status of Education Funding Legislation
ADMA
GEN
ADMA
FRPL
ADD’L AID FCDA OTHER STATUS
HB 1/2
(Sununu)
???
Proposed
2.11.21
HB 608
Amend. 399
(Ladd)
Permanent
increase
eff FY 22
Permanent
increase eff
FY 22
Repeals
stabilization
aid
eff FY22
Retained H Ed
2.18.21
HB 623
(Luneau)
FY 22
FY 23
FY 22
FY 23
FY 22
FY 23
FY 22
FY 23
Retained H Fin
2.16.21
SB 135
(Hennessey)
FY 22 FY 22 Passed Senate
2.18.21
SB 145
(Kahn)
FY 22 FY 22 FY22 Suspends
inflation adj for
FY22
Heard S Fin
2.16.21
SB 158
(Kahn)
FY22 Numerous
Commission
provisions
Heard S Fin
2.16.21
40

41. Short-Term Progress Possible on
Two Long-Term Principles
• Restoring the Statewide Education Property Tax (SWEPT) as a true
statewide tax
o “…the state should eliminate the “excess-SWEPT” grant and such excess funds
funds should be applied through the reformed distribution formula to improve
improve student and taxpayer equity. There should be no blanket rebates,
abatements, refunds or grants of [SWEPT] back to municipalities.”
o Restoration of the SWEPT would generate $25 to $30 million annually
• Expanding property tax relief to low- and moderate-income
households
o “The state should enhance taxpayer equity through property tax relief targeted
targeted to homeowners and renters…”
o Existing LMIHPTR program has all but disappeared – in 2018, paid $1.1M to
approx. 7,000 homeowners; in 2003, paid $7.5M to 27,000+
41

42. Policymakers and Public Await Supreme
Court Ruling in ConVal School Funding Case
March 2019 Four school districts - Contoocook Valley, Winchester, Mascenic,
and Monadnock - file suit against State of NH, alleging school
funding system fails to comply with NH Constitution and Claremont
decisions
June 2019 Cheshire County Superior Court rules in favor of districts,
holding that State was violating the Constitution by failing to
fully fund an adequate education for Granite State students
Sept 2019 NH Supreme Court accepts State’s appeal
April 2020 26 school districts and NH School Boards Association file brief in
the Supreme Court supporting the ConVal plaintiffs
Sept 2020 NH Supreme Court hears oral arguments in case
????? NH Supreme Court issues decision in case
42

43. A Final Thought
New Hampshire students’
educational opportunities
and property owners’
school tax rates
should not depend
on their zip codes.

44. THANK
YOU!
info@fairfundingnh.org
www.fairfundingnh.org
@FairFundingNH Twitter
@NHSchoolFundingFairness Facebook
@fairfunding_nh Instagram
603-945-9988