As school starts across the state, some NH communities face sharp cuts in state funding for education

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The Brown Elementary School in Berlin, NH, which the city was forced to close in 2019 due to lack of funding.

Schools across the state will start their school year facing a cut of $1.06 million in total state aid. However, when we look deeper, we see a tale of two communities: half of New Hampshire towns will actually see an increase in state funding, and the other half will receive an average of 5.7% less funding over last year. 

Towns that will receive more state funding are, on average, less likely to rely on stabilization grants and have increasing student enrollment. These districts are set to receive nearly $6 million more in state aid this school year over last year, or an average of 6.9% more state money. 

But the other half of towns in New Hampshire will lose $7 million–an average of 5.7% of their total state grant. These towns are more likely to have declining enrollment, rely on stabilization grants, have a larger proportion of students living in poverty, and have lower property wealth per student (and therefore a more difficult time raising money for their schools). 

Earlier in the summer, lawmakers passed a budget that would have increased state funding by $138 million, targeted at those districts that are the most financially vulnerable. 

However, the budget was vetoed by Governor Sununu in July, and the state is operating in a “continuing resolution,” which serves as a temporary stopgap to keep the government open until they can agree on a statewide budget. But the continuing resolution did not pause the cuts in stabilization grants. 

Download a town-by-town list of the funding changes, both in stabilization cuts and overall state aid (which includes all streams of state aid, and the Statewide Education Property Tax):

The House and Senate held a joint public hearing on the budget, specifically on the effects of the budget veto and continuing resolution on schools, educators, and families, on Thursday, August 29. Reaching Higher NH will provide a full recap of the hearing. Follow us on Facebook to stay up to date on the latest budget news.   

Cuts concentrated in vulnerable communities

The cuts in stabilization grants hit the state’s most financially vulnerable communities the most, since the grants effectively replaced the targeted funding that the state provided in 2008-2011. At that time, New Hampshire had specific aid streams for communities with high percentages of low-income students (measured by the students eligible for the federal Free and Reduced Lunch program), and communities that had low property values per student (and therefore had a more difficult time raising money for their schools through property taxes). 

For example, Manchester, Rochester, Derry, Claremont, Berlin, Nashua, and Franklin account for ⅓ of the total loss in stabilization grants. However, when taking into account other forms of state aid, these communities cumulatively lose $1.03 million this year alone. 

The Governor has expressed support for restoring stabilization grants to their original, 2012 levels, which would infuse an additional $26.4 million into our public schools. Manchester, Rochester, Derry, Claremont, Berlin, Nashua, and Franklin would cumulatively receive $8.1 million more in state aid, through the stabilization grants. 

What are stabilization grants?

Stabilization grants are concentrated in districts with higher proportions of students living in poverty, and low property values (and therefore must have higher property tax rates to raise the same amount of money for their schools). The current stabilization grants were created in 2012, following a funding change that stripped the funding formula of targeted aid for financially vulnerable communities.  

For more information on stabilization grants, read: “Stabilization Grants: A Vital Part of the Formula for NH’s Most Vulnerable Communities.”

The top 15 communities that receive stabilization grants, have 30% higher tax rates, less than half of the property wealth per student, and 64% higher concentrations of students living in poverty (measured by Free and Reduced Lunch eligibility) than New Hampshire overall. 

Under current law, stabilization grants will be reduced 4% each year until they eventually phase out. The cuts began in 2017, meaning that in the 2019-2020 school year, districts are set to receive 84% of their 2012 stabilization grant. 

Read more about how New Hampshire funds its schools: