N.H. districts pay for secondary school in multiple ways

Valley News Staff Writer
Monday, April 15, 2019

Presented with a school budget that included a $34,000 pilot preschool program this year, some Grantham voters bristled. The overall budget carried a 3.9% increase, a hike that would add $133 to the tax bill on a $250,000 home. And not everyone was eager to pay up.

“There has to be some way to rein this in. When does it end?” resident Jeff Figley said at Grantham’s annual school district meeting last month.

What voters couldn’t touch in the $9.9 million budget — making the new preschool the obvious target — were tuition payments for the estimated 17 new students who will enter Lebanon Middle and High School next year, under a contract the two districts maintain with one another.

Theirs was, of course, one of many battles that play out year after year in New Hampshire school districts as residents weigh educational quality against fiscal restraint.

This year’s school district meetings threw one cost into sharp relief: How school districts pay for their secondary school students. Croydon, in particular, faced a budget deficit due to increased enrollment in grades five to 12.

Most towns in New Hampshire (and Vermont, too) have their own elementary schools, but few are large enough to support middle and high schools, which are more costly to operate than an elementary school. The majority, instead, exercise one of four distinct options for educating their middle and high school students:

■Many towns formed regional districts that incorporate all grades. Mascoma Valley Regional School District is one example.

■Two or more school districts can form a cooperative, a regional school district in which towns share costs and governance. Haverhill Cooperative Middle School follows this model.

■A school district can enter an Authorized Regional Enrollment Area (AREA) agreement such as Grantham and Plainfield have with Lebanon, paying tuition for each student they send to the receiving school.

■And schools can form a tuition agreement, which is similar to an AREA agreement but less rigid.

The 33 cooperative school districts in New Hampshire, most of which were formed in the 1950s and ’60s, rely on a wide variety of formulas to determine funding. “There’s a huge, huge range,” said Barrett Christina, executive director of the New Hampshire School Boards Association.

All cooperative districts use some combination of equalized property value and average daily membership (ADM), with exceptions for items such as state aid, to determine funding. These formulas can lead to debate.

In 2017, after several years of ballooning tax rates, the town of Canaan sought to change the way towns in the Mascoma Valley Regional School District — Canaan, Enfield, Dorchester, Grafton and Orange — contribute to the district. Rather than using only ADM to determine each town’s portion of the budget, Canaan officials proposed a formula that included each town’s property value. A study committee composed of representatives from each town eventually voted the proposal down.

Debates over whether to include property values in the funding formula and how heavily to weigh them play out pretty predictably, said Canaan Town Administrator Mike Samson, who advocated for the change.

On one hand, ADM has a “logical simplicity that appeals to a lot of people,” Samson said.

On the other hand, “If you just don’t have the tax base, it can be disproportionate,” he said.

Last year, Enfield residents paid $14.58 per $1,000 of property valuation, while Canaan residents paid $21.10 per $1,000 of property valuation to send roughly the same number of students to Mascoma Valley schools. A formula that included property values would have shifted some of the tax burden off of Canaan and onto Enfield.

“Obviously, if I’m a taxpayer in Enfield, it’s not in my best interest,” Samson said. “There are conflicting interests ... and the underlying issues with these formulas are the inequalities between the school districts,” he said.

At the same time, these clashes illustrate an advantage regional schools have over other arrangements: Voters in each of a district’s towns have a say in the budget process.

By contrast, taxpayers in towns like Grantham, who tuition their students to other districts, can’t tinker with those fixed tuition costs. Essentially, Lebanon sends Grantham a bill that must be paid.

Grantham School Superintendent Sydney Leggett said school officials budget so that elementary school funds aren’t used to pay tuition to Lebanon for Grantham’s middle and high school students.

“We always have to look at the whole budget,” she said. “We would never try to have any competition between what we offer at different levels.”

Voters, however, could think differently. Tuition payments for the AREA agreement, which are set by the Lebanon School Board using a formula that includes ADM, state financial reports and independent audits, are essentially untouchable. That can leave other line items such as the pilot preschool (which voters ultimately approved) vulnerable to cuts.

“I think that’s up to each individual voter and how they would vote on the budget,” Leggett said.

Grantham’s AREA agreement with Lebanon has worked well for the district, Leggett said.

“One of the most positive things in terms of feedback that we get from it is that all of our students stay together,” she said. “That’s important to a lot of people here.”

Grantham and Plainfield also receive a break on tuition as part of the AREA deal.

Many towns have AREA agreements similar to Grantham’s contract with Lebanon, ensuring that the receiving district can accurately plan for staffing, space and resources, Christina said, while providing security for the sending school that all of their students can attend the same school.

In recent years, however, a growing number of towns have begun negotiating tuition agreements with multiple schools, Christina said. And in some districts, that now includes private schools.

Senate Bill 8, also known as the Croydon Bill, which was signed into law in June 2017, specifies that a school district may send a child to a non-religious private school if there is no public school in the district for that child’s grade level.

Although some parents have tried to apply it more broadly, the law applies only to schools that aren’t part of cooperatives and don’t have AREA agreements, Christina said. It also specifies that the decision rests in the hands of the school district in making these agreements, he said.

“I think perhaps there’s a lack of understanding among some members of the public,” he said. “It doesn’t mean that parents can pick what school they want their child to go to.”

But in Croydon, the birthplace of the bill, there’s a different interpretation. Croydon School Board Chairwoman Jody Underwood said that the town will contract with any school a parent chooses that has been approved by the Department of Education.

That brings Croydon and other towns that may follow suit closer in practice to neighboring Vermont, where students in towns without a public school for their grade are allowed to attend any Vermont public or non-religious private institution, as well as out-of-state schools.

The change can also bring special challenges, as Croydon taxpayers discovered this year when an influx of new students in grades five-12 led to a budget deficit. School Board members attributed the increase to new families moving into town to take advantage of school choice and are now grappling with how to budget for the new reality.

Of course, enrollment spikes can happen anywhere, for a variety of reasons. Low property values, for example, tend to correlate with more renters, a phenomenon that can lead to unpredictable enrollment in towns that can ill afford it, Samson said.

To offset such factors, the Mascoma Valley district changed the way its towns pay their share of the district’s costs last year, spreading the enrollment calculations over a three-year rather than a one-year period. Several other multi-town districts around the state have similar accounting practices.

Districts in AREA agreements take enrollment uncertainties into consideration as well. In Grantham, middle and high school enrollment projections are up a bit this year, Leggett said, but the AREA agreement with Lebanon is constructed around several different data points, which helps to stabilize budgets amid these uncertainties, she said.

Sarah Earle can be reached at searle@vnews.com and 603-727-3268.