“There are elements that need to be changed”: School business managers reflect on school funding

“There are things in our standards and in our mandates that we face, that could be and should be reflected in a revised definition,” said Nathan Lunney, the Business Administrator for SAU 52 in Portsmouth. He was speaking to the Adequacy work group of the Commission to Study School Funding, a statewide group of lawmakers and members of the public who are tasked with rethinking the way New Hampshire funds its public schools. 

The Adequacy work group is spending the next several months figuring out how much it costs to educate students in New Hampshire. The state Constitution affords each child the opportunity for an “adequate” education, and requires the state to pay for it. In 2008, lawmakers crafted a formula that allocates state money to schools. That formula set the cost of education, in today’s dollars, at $3,708 per student, which was intended to cover the cost of the teachers, the building, transportation, materials, technology, a principal, and other costs. 

But Lunney, along with two of his colleagues, Duane Ford from SAU 67 (Bow) and Tim Ruehr from SAU 29 (Keene), said that there are a number of other requirements — many of them legal mandates — that are either not included in the formula, or are underfunded. 

“There are elements of the definition that need to be changed,” said Lunney: transportation, teacher salary, class size, health services, and facilities, to name a few.

As business administrators, the three guests have a unique insight into school finance: business administrators serve as essentially the Chief Financial Officers of their schools, managing the financial, human, information, and other resources. They said that they are sharing the data about what is happening in their schools, and that data show that the state is underfunding education.

Teacher Salaries

The current formula, which was created in 2008, included a per-student “base adequacy” grant. As part of that calculation, the cost of a teacher was assumed at the average salary of a teacher with a Bachelor’s degree and three years’ experience: in 2008, that was $35,548, excluding benefits. Benefits were assumed at 33% of salary. 

The problem with that equation, according to Ruehr, is that both the salary and benefits assumptions are understated. The formula accounts for $35,548, but the actual average salary of a teacher is roughly $57,000 per year, excluding benefits. And, payroll taxes alone cost about 26% of salary: “It’s not reasonable to get to 33% with benefits on top of that,” he said. The real cost of benefits and taxes is about 50% of the salary, he stated. 

“No school can use Step 3 teachers as an average,” Ruehr told the committee. The NH Department of Education does not publish teacher tenure data, but Reaching Higher NH’s research indicates that the average step 3 salary is $40,860. This suggests that the average teacher tenure is much higher than the formula accounts for. 

In many communities, staff salaries account for a large portion of their school budget. In Bow, for example, salaries and benefits account for roughly $18 million of a $30 million budget. State education funding pays for some of that cost, but local taxpayers are left responsible for what the state funding doesn’t cover.  

Structure of formula: Prioritizing centralization 

The current funding formula, the school business administrators told the work group, favors centralization and high-population areas. New Hampshire, however, is a very rural state — there are very few cities, and most areas are sparsely populated. 

For a school to rely on state aid, many rural districts would have to split administrators, or hire professionals part-time. 

“It’s not practical for an elementary school to hire a part-time principal,” Ruehr said. “As a state we are rural, and we should embrace that. But the formula is currently geared toward a large, city-laden state.”

And, transportation is a big issue: schools across the state have said that the $315 per K-8 student does not cover the cost of school buses. Since state law does not require transportation for high school students, it is not included in the formula, leaving school districts to pay for those costs if their students and families depend on the services. 

Difficulty in determining costs for many services

All three administrators echoed the difficulty in determining the exact cost of education. There are many costs that are quantifiable, like school nurses, which are required by law, but not included in the funding formula. However, other costs simply aren’t as easy to cost out, or may differ depending on district size.

“Some of what you want to institutionalize in the formula can, today, be drawn from the state reporting that we already do,” said Lunney. “Some of them will still be harder, because they’re harder to identify and capture locally, and will be exponentially harder to capture on a statewide basis.”

“I don’t want to be philosophical, just practical,” said Ruehr. 

Next steps for the Commission

The Commission to Study School Funding continues to meet every other week, and has three work groups that meet regularly as well: Adequacy, Fiscal Policy, and Public Engagement. 

The Adequacy work group is tasked with defining and determining the cost of an adequate education, and identifying disparities in student opportunities and outcomes, among other tasks. 

The Fiscal Policy work group is tasked with collecting and interpreting fiscal data, including tax policy, the state budget, and more. 

The Public Engagement work group is tasked with planning public engagement initiatives and collecting and analyzing input from stakeholders, students, and the public. 

The full Commission is tasked with researching the way New Hampshire funds its public schools, and must make recommendations on how to make the system more equitable by December 1, 2020. 

The next meeting of the Commission work groups is scheduled for Monday, June 8. More information is posted by the University of New Hampshire Carsey School for Public Policy

Our Involvement

In late 2018, the board and staff of Reaching Higher NH determined that our leading organizational policy priority will be to inform and support public engagement on the issue of school funding. We believe that re-exploring how NH funds its public schools is among the most important public policy opportunities of our time. To that end and for the foreseeable future, a lot of our policy work will be focused on providing the NH public with the timely research and resources you need to understand and make informed decisions about school funding policies in NH. This work will include in-depth original research, like our Whole Picture of Public Education project, as well community engagement initiatives, and public awareness and information efforts. 

Join our network of New Hampshire parents, educators, business leaders, and community members who are interested in school funding.

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