Part Two of a Five-Day Series
Assessing the Current Formula: Using data and analysis provided by American Institutes for Research (AIR), the Commission determined that New Hampshire’s school funding formula, which relies heavily on local property taxes, is not equitable.
1. Students across the state do not have the same educational opportunities.
2. Taxpayers have to pay much more in some districts than in others to achieve the same outcomes.
Reviewing School Funding History: As part of its work, the Commission examined the history of school funding in New Hampshire and past efforts to make the system more equitable.
- Over the past three decades, several important court cases have challenged the way New Hampshire funds its public schools. Court decisions have largely found that the state has not met its Constitutional obligation to educate its students equitably, due primarily to its reliance on local property taxes.
- Since 2008, the state Legislature has passed several key statutes addressing the concept of adequacy in education, sources of revenue for funding schools, and the methods of distribution.
Defining the Cost of Adequacy: The State currently distributes funds to schools based on inputs needed to run the school. These include necessary resources like teachers, materials, technology, and transportation. The Commission recommends adopting an outcomes-based system, which uses student results in the following areas to set the cost of adequacy:
- Graduation rates
- Test scores
- Attendance rates
Calculating Equity: The average school needs to spend $17,000 per student to achieve the state-average outcomes. However, some schools can do it for less and some need more, based on student needs and community characteristics. The current funding formula provides differentiated aid based on student need, but the Commission’s recommendations go further than the current formula, to include additional factors that affect outcomes and attach “weights” to each cost factor:
- Free and Reduced Price Lunch eligibility rates
- English Learner rates
- Special education rates
- Indicators of district size
- Percentages of students by grade level
Paying for Schools: The Commission is not recommending a specific way of paying for education, but the independent analysis that informed its work proposes a statewide property tax that would be collected locally, sent to the state, and distributed based on the weighted formula, along with a minimum local contribution. The proposed statewide property tax would be considerably larger than the current statewide property tax, and districts who raised in excess of the adequate funding level (usually due to high property values) would not get to keep the excess. About 70% of towns would see a reduction in property taxes under this scenario. To ensure taxpayer equity under such a scenario, the Commission recommends improving the state’s property tax relief program to protect people in low-to-moderate income categories.
Engaging the Public: With assistance from the University of New Hampshire’s Carsey School of Public Policy, Commission members collected input from a variety of stakeholders through surveys, focus groups, and public comment sessions. They found several common themes:
- Many New Hampshire residents do not fully understand how schools are funded in the state.
- Most people agree that the current system does not provide an equitable opportunity for an adequate education; that school funding should be student-centered based on identified student needs; and that high quality teaching staff is key to a quality education.
- The public is dissatisfied with the state’s heavy reliance on local property taxes, but there is no consensus on an alternative funding model.
Read all of our coverage of the School Funding Commission’s Final Report:
- School Funding Commission to Publish Final Report
- PODCAST: Quest for Equity
- Will School Funding Reform Succeed This Time?
- VIDEO: “Different School, Different World: An Introduction to School Funding in New Hampshire”
Read more about school funding in New Hampshire:
- “There are elements that need to be changed”: School business managers reflect on school funding
- Manchester English Learners Request Fair Funding
- “It’s penny wise and pound foolish”: Teachers reflect on how disparities in pay affect culture, instructional quality, and morale
- Community on the Brink: Idyllic New Hampshire Town Beset By School Budget Battles
- Commission begins reexamining public school funding