Forum looks to bring equity to NH’s school funding model

Valley News Correspondent
Published: 9/17/2022 1:01:52 AM
Modified: 9/17/2022 1:01:24 AM

SUNAPEE — As the general election nears, advocates for New Hampshire school funding reform are increasing their community outreach to educate more residents about the ongoing battle over New Hampshire’s funding system for K-12 public schools, which advocates contend is unconstitutional, inequitable and places undue hardships on property-poor communities.

On Thursday, more than 50 people, including many Croydon residents, gathered in the Shelburne Gymnasium in Sunapee for a forum hosted by the New Hampshire School Funding Fairness Project, a nonprofit organization calling for a more equitable approach to funding public education in the Granite State.

Over 70% of New Hampshire’s funding for public education, approximately $2.3 billion per year, is raised from local property taxes, as opposed to state-generated funds, according to School Funding Fairness members.

This reliance on local taxes poses a greater disadvantage to property-poor communities, which are forced to raise their tax rate to compensate for their lack of property wealth, funding reform advocates said.

“The current system puts people in a box, pitting the elderly (on constrained incomes) against parents,” said John Tobin, an attorney who co-led the Claremont school-funding lawsuits in the 1990s, in which property-poor districts sued the state over the funding model.

Croydon resident Amanda Leslie, a high school English teacher, said she witnessed the division created by New Hampshire’s system firsthand in March at the Croydon School Meeting, when residents at a sparsely attended meeting approved a floor amendment to reduce the proposed school budget for the 2022-23 school year from $1.7 million to $800,000, a 53% cut. Voters in attendance passed the reduced budget, 20-14.

Croydon residents would successfully overturn the budget cut by petitioning for a special meeting to revote on the budget, which the school board approved and held in June. That special meeting drew nearly 60% of Croydon’s total registered voters, who voted, 377-2, to restore the $1.7 million proposed budget.

That vote, Leslie said, illustrated that the majority of Croydon residents value education, as well as the power of democracy when people participate and work to increase voter awareness and understanding of the issues.

New Hampshire is currently facing two lawsuits from school districts or residents over the state’s education funding. Both suits allege that New Hampshire has failed to abide by the rulings of the New Hampshire Supreme Court in the Claremont lawsuits two decades ago. In those rulings the court declared that the state is constitutionally obligated to fund “an adequate education” for New Hampshire students in grades K-12. In addition, the court ruled that any tax used to raise funds for education must have a uniform rate across the state.

One lawsuit, known as the Conval lawsuit, was filed in 2019 by Contoocook Valley School District in Peterborough, and has since been joined by 16 school districts, including Lebanon, Claremont, Mascoma, Fall Mountain and Newport.

The Conval suit argues that the state’s definition of “adequacy” is not sufficient, which results in downshifting the burden to fund schools on local property taxpayers.

According to data shared by the School Funding Fairness Project, New Hampshire’s state-level contribution to local school districts, less than 20% if not including local property taxes, is the lowest of any state in the U.S.

In addition, New Hampshire’s formula for calculating the cost of an “adequate” education, known as Education Adequacy Aid, has not been reevaluated since its creation about 15 years ago, Tobin said. The original calculation did not include costs for many expenses that are now mandated by the New Hampshire Department Education, such as registered school nurses.

“There have been inflation adjustments, but no change to the formula fundamentally,” Tobin explained. “Right now the state can’t or won’t tell us what the formula (specifically) covers.”

The most recent lawsuit, the Rand lawsuit, was filed in June by Tobin and Andru Volinski, an attorney who also worked with Tobin on the Claremont lawsuits. The Rand lawsuit, named after one of the plaintiffs in the case, argues that local property taxes are not uniform in rate, which violates the Supreme Court’s requirement for funding education.

But regardless of the court’s rulings in these cases, the creation of a more equitable funding system will fall upon the New Hampshire Legislature and governor, funding reform advocates said.

There are a number of possible approaches to making the funding burden more equitable to New Hampshire communities, though there likely will not be one approach that satisfies all parties, Tobin said.

One proposal would be a single statewide property tax rate for funding education, set at $10.24 per $1,000 of assessed property value.

Zach Sheehan, director of the New Hampshire School Funding Fairness Project, said this statewide rate would most benefit communities with higher equalized tax rates, such as Claremont, ($20.37 per $1,000 of assessed value), Newport ($15.42 per $1,000 of assessed value) or Lebanon ($13.47 per $1,000 of assessed value). Communities with lower tax rates would pay more, including Croydon ($7.67 per $1,000 of assessed value) and Sunapee ($7.76 per $1,000 of assessed value), based on 2020-21 tax data.

In addition, this system could also create hardships for low-income residents who live in wealthier communities, as they might have more difficulty absorbing a higher education tax rate, noted Lebanon City Councilor Karen Liot Hill.

“Taxpayers within communities are also differently situated,” Hill said. “Could an income sensitivity component be added to this (possible approach)?”

Tobin agreed about the concern and said that many proponents of this approach have recommended a robust tax relief program to aid low-income residents cover a portion of their property taxes.

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