The Commission to Study School Funding released its final report on Dec. 1. In this new podcast episode, Quest for Equity, four members of the Commission discuss their key findings and what they could mean for students and taxpayers.
Read all our coverage of the School Funding Commission’s Final Report:
- School Funding Commission to Publish Final Report
- The School Funding Commission’s Report At a Glance
- Will School Funding Reform Succeed This Time?
- VIDEO: “Different School, Different World: An Introduction to School Funding in New Hampshire”
After nearly a year of deliberations, the Commission to Study School Funding has released its final report reimagining how schools are funded in New Hampshire. These recommendations will be used to inform school funding legislation in the coming legislative session. I’m Sarah Earle from Reaching Higher NH, and I’m speaking today with four members of the 17-member commission. Representative David Luneau of Hopkinton serves as Commission Chair as well as Chair of the Fiscal Policy Work Group. Senator Jay Kahn of Keene is Chair of the Commission’s Adequacy Work Group. Representative Mel Myler of Contoocook is Chair of the Public Engagement Work Group. And Bill Ardinger is a Concord attorney who has lent his expertise to crafting sound recommendations. They are here to explain some of the Commission’s key findings and recommendations, the rationale behind them, and the prospects that lay ahead. Thank you all so much for joining me today, let’s get started.
Okay, Representative Luneau, you emphasized that in one of last week’s meetings that equity is the key word when it comes to school funding. Can you explain how you’ve addressed that concept as it relates to both students and taxpayers?
David Luneau: Sure, thanks Sarah, that’s a great question and I think that’s a term, student equity, that you are probably going to see used quite frequently in the Commission’s final report. And one of the things we’ve talked about is how the Commission conducted its work over this period of approximately 10 months, and we used this thing called the design thinking process and it starts with understanding the problem. Coming to understand the problem I think took about eight of that 10 months and I think could probably be boiled down to student equity. And what that means is student fairness. And how fair is it for a student to be educated in let’s say, Hopkinton versus educated in Manchester or educated in Claremont? One of the things, like a big finding in the Commission’s work was understanding the disparity in average student performance depending upon where that student lives. Basically the entire work of the Commission really revolves around that concept of student equity. From a costing perspective, the cost of an opportunity for an adequate education, but also from a funding perspective, where state resources can be used to assist local dollars where they’re needed most, where it’s needed most. That provides not only a dimension of student equity but also a dimension of taxpayer equity.
Good thank you, we will get a little bit more into the details a little later. Representative Myler, you’ve served in the legislature the longest and thus I guess have seen the most legislation come and go. And of course the history of education funding reform in New Hampshire goes back even much further than your tenure. What do you think makes this latest effort different from past attempts to create more equitable funding, and what’s to prevent it from becoming just another attempt?
Mel Myler: I introduced House Bill 551 in the last session, and it called for an independent commission with $500,000 to fund the commission. The issue was a bipartisan issue ultimately. It was voted into the house, it went to the Senate, passing the Senate, and it went to House Finance. Along that path there really wasn’t a lot of conversation around the $500,000 or the need for the commission because I think there was a recognition on the part of all legislators that this issue needed to be addressed. So one of the major changes in this process is to have citizens like Bill Ardinger for example, at the table talking about the issues of equity and funding sources. And so that is a major change. Another issue that became very clear from the conversation is that we talked a lot about workforce development so that we have students that are prepared to deal with their careers with college readiness etc. Well if you’re going to talk about workforce development across the state, you didn’t really have to look to see how we’re going to provide for all students to have an equitable education. And that’s why I then began talking about the need to move from a mantra of “my student” to “our students”. How do we provide for our students across the state, so that in those areas that have disparities around funding, etc., that we can focus more funding in those areas that need assistance, rather than just everybody get the same amount from the state? That’s a fundamental shift.
Yes I’ve noticed that emphasis on “our kids,” “our students.” And that kind of leads pretty well into my next question. So Senator Kahn we know that New Hampshire is a high-performing state and consistently ranks among the top five States, I think, in the nation for education. Additionally, the report issued by AIR, or American Institutes for Research, found that our state, I believe, is already spending adequately on education. At the same time however the report finds that New Hampshire has the most regressive distribution system in the country, meaning not all students have the same access to an adequate education. So, how did the adequacy work group address these kind of conflicting realities?
Jay Kahn: I mean what we know is that low property value communities have the highest tax rates. And while they have the highest tax rates they spend less per student. And as a result, not surprisingly, they have lower outcomes. And the Constitutional test for us is, students have the opportunity for an adequate education, and that’s what’s been inculcated into state statute. So when you see that there are lower outcomes in lower property value communities, the question becomes, how do you equalize them and then on what basis? So the AIR study was important because it provided a statistical relationship between student performance, based on outcome measures, such as graduation rates, standardized test scores, attendance rates, and based on student need characteristics, such as the relative poverty level that a student faces on the basis of free and reduced lunch. Does the student have special education needs? Does the student have English language learning needs? And determined that each of those is statistically related to a student’s ability to achieve an average outcome based on the average outcomes in the state. There are also community characteristics that needed to be accounted for. Is this a small school and what level, what grade level is the school aiming to serve? You take those statistical relationships and it allows us to then see, what is the relationship to average spending in the state, and the average spending per student in the state currently to achieve those better than national average test scores. And you find that there is a strong correlation and the basis for equalizing the opportunity. So now we have weights for each of those significant variables. And based on current spending and the weights we can now use that for predictive models, meaning, if we were trying to reach the average outcomes for the state for all school districts, what would be the funding need in each of those districts? Now we change the argument that it’s no longer an input based funding model based on the number of students in a class or the number of administrators per student in a school. Now it’s based on the actual performance of the students in the school, the characteristics those students have, and what that school district needs to spend in order to provide a topper to equalize the outcomes. The student-centered outcome based model is going to give all students in the state the opportunity to achieve at the averages for the state, which are in the highest 10% of states in the nation. So it is an equity based funding model.
Can you describe very briefly on what the weights capture that isn’t already captured in our current model and how that aids in creating a more equitable model?
Myler: Sarah, that’s a great question, New Hampshire has long recognized that there are differences in student needs. And these same variables are already given differentiated aid in the current funding model; it’s just not significant enough to provide districts with differentiated funding levels to address the problem. We’ve got a policy on the input-based model that funds every student equally with the same input dollar amount, but some school districts don’t need that dollar amount to achieve the outcomes that they are achieving. So there are certain inefficiencies in the current distribution of how we distribute what state aid we do provide because it’s so even across all students in all school districts. When we move to an outcome-based model it’s also looking at the capacity of a community to raise funds based on its community characteristics. We see that the state aid can be more focused, more targeted, to these differentiated needs and what the weights have done is actively and accurately determine how much more needs to be spent for that student to achieve the average outcomes.
Another key feature of AIR’s model is its use of a uniform statewide property tax. Representative Luneau can you explain to me how the model differs from what’s currently in place and now the change would affect taxpayers?
Luneau: Thank you very much Sarah, that’s a good question, and I think I am going to start by saying that what the AIR research report really shows, or presents, are a couple of examples of how you might be able to have a student equity-based local and state funding plan. And the uniform state property tax is something that that we actually have in place right now. You know it’s uniform at I think a rate of I think $1.92 per thousand on property values. But $1.92 by itself doesn’t raise the amount of money you would need locally to provide all the costs for your local school district. Certainly, in most cities and towns it falls far short of that. So that’s where districts come in, and beyond what every school district gets from the state, which is this little bit of flat funding everybody gets, it doesn’t matter where you live. It’s up to the local cities and towns to raise the rest, and that’s where you get that enormous variation in tax rates. So what AIR did was provide a couple of examples of how things could be done differently, and they’re pretty straightforward. But there’s other ways of doing it too and I think in the final report we will certainly be talking about a number of different possible solutions. The most important part to realize is that it’s not up to the Commission to ultimately decide what’s really going to be the product of a political process involving obviously the Legislature and the Governor’s office.
Myler: I think it’s important to note that we have talked about the American Institute for Research. This is the first time in 35 years that we’ve had an outside group that has come in and looked at our data and provided feedback on our data. I believe the last time that that took place was in 1985 when Augenblick came in and it is not the same study but looked at the information that we have in the state and provided what was then called the Augenblick formula.
Great point, okay so let’s talk a little bit about potential opposition. Mr. Ardinger some people have taken issue with the proposed model because they feel like it brings back the concept of “donor towns,” (that dirty word), stipulating, I guess, that the towns who raise in excess of the statewide property tax will no longer get to keep that excess. How are you responding to that concern, and are you worried that these communities might put up roadblocks to reform if that’s the way the funding model proceeds?
Bill Ardinger: That’s a great question, let me say thank you, Sarah, to you, and Reaching Higher for letting me participate. The fact that representative Myler was able to get bipartisan support for this kind of an inquiry, including the use of a real expert, is a huge achievement in and of itself. And I believe it’s going to have a tremendous impact on moving New Hampshire ahead. On your question about public opposition on an aspect of the state property tax and donor towns, I’d like to put that into context. In every public school’s structuring debate, there are four principal knobs that need to be turned. Local control vs. state control and what is the proper level of delegation? What is the shared responsibility for funding public education assets between state budget and local budget? That’s the second knob. The third knob is, what is the state budget and how is it going to be distributed to the local governments so that you address concerns of equity and other concerns of policy? The final very important knob is tax policy. How are you going to provide for the funding of the local and the state share? So identifying the principal focus we can stick in the ground of this complex mess is the stake that you start with: We’ve got to make our system protect, as Mel Myler, says all of our children, whether they live in Manchester, whether they live in Waterville Valley, whether they live in Claremont. We have to really focus our resources there. That is a very important finding, and it really starts driving total policy. I think that the tax policy debate will always occur, there’s an equity issue in the state property tax that needs to be addressed, which is some circuit breakers that focus on helping the problems in the property tax base. Sometimes there are people who own good property, but they happen not to have the cash flow at the moment, and how can we install or recommend modifications to the property tax to provide some equity for those people? And the Commission has got some principles in that area. So you have focused, and I think some have focused, on the donor town question. I don’t think any of us on the Commission or any of the elected officials who are in the legislative branch now — they won’t minimize the importance of that as a political issue in the tax policy area. I think it is, but there are so many other issues and other ways to get improvements in a tax policy or other alternative. But in this school funding effort the more important question to tie down first is student equity.
I did want to ask about the change in the Legislature as of November 3rd. That’s on our minds and people’s minds. I don’t think it’s too much of an assumption to say that you face a different, uphill battle in getting change passed now, with the shift from Democratic to Republican control. So I just want to ask you how this new reality affects the work of the Commission going forward?
Luneau: I would say that no matter who is in the administration of the House and Senate or the corner office, that there’s a lot of information and education and understanding that that would need to take place. And that you’re not just going to see a budget developed in January and February and signed into law in June that immediately puts you on a transition plan. When we started this, Sarah, I think a lot of us had known for a long time that how the state goes about funding its schools is a top issue. This year is quite different. Everybody’s — with the pandemic, health and safety — that takes over everything and rightly so. School reopening — how do we do it safely, how does the legislature resume business safely? These things are number one, in fact they are the first hundred things on every legislator’s mind right now. And school funding has gone from the number one issue to 102 or 103. But, this is something that we’re going to have to deal with no matter if it were Democrats or Republicans running the Legislature.
Khan: Something I’d like to add is that I’m not an attorney or policy analyst. I love statistics, but I really felt that I needed to understand the court decisions, which basically say the Legislature needs to solve this problem. And we have two Constitutional tests in front of us. One is, is there equal opportunity for an adequate education? And it can’t be proven on an input model, that there’s something unequal about it, because that’s what it does on an input model. It standardizes the costs across every student; it doesn’t say what it really costs to educate those students. So the Constitutional test of the opportunity is, can you demonstrate that there’s any harm in the way that we’re currently funding? And I think for the Legislature to understand the findings of an outcome-driven model and equalize those opportunities, we can demonstrate that there is harm in not attempting to do that. So that’s an important thing to the legislative policy side that I think legislators will gravitate to. The second Constitutional test is that of reasonable and proportional taxation. And when we can show the varying rates that there are across the state in order to achieve any kind of equity in funding for students, it doesn’t rise to the test of reasonable and proportionate. So, I think in delegating to the Legislature and the court decisions how school should be funded, we have these two tests, and I think legislators need to rise to that challenge, and I think we’ll all understand what the problem is, mutually. I think legislators will be a moderating influence on trying to achieve these overall goals, which I think we will come to agreement.
Myler: One of things I want to pick up on, a point that Bill mentioned earlier, the issue of property tax and relief on property tax is key here, they go hand-in-hand. And the Commission has talked about this. The property tax relief clearly is a need here. One of the things that we had representatives from the Department of Revenue Administration say, is the current property tax relief formula hasn’t been touched in 20 years and even they said that is wholly inadequate right now. So I think what you’re going to see coming forward, and I think this is going to be a bipartisan issue here, is what are the alternatives to provide tax relief, the tax deferral circuit breakers, begin to really look at helping moderate and low-income families who are either owning properties or renting or whatever, to really look at this in a much more direct way as it relates to the whole issue of how we’re going to fund school. So I think that issue is a bipartisan issue that will help deal with the current Legislature as we come together.
Khan: If you look at what our current funding mechanism is for public education, it is very hard to explain. The accumulation and just the piling on, the spaghetti bowl — you just can’t do it. So one might say, oh let’s just keep it easy, we’ll just continue what we’ve been doing. While it’s simple, no one walks away from that conversation any better to explain what are the goals of that investment. Nobody can explain it because it needs some rationality to it. And it may take a couple of sessions to get through that, but we have to have the conversation, if the state is going to continue to spend a billion dollars of its money per year, if we’re going to continue to make that level of commitment from the state, we need to know what the return on that investment is. And the recommendations of the School Funding Commission provide a basis, provide a rationale.
Ardinger: In question to the change in Legislature: I personally have had experience working since the original Claremont case, with some of the most wonderful legislators and Governors, including folks like Senator Fred King, who fought hard for a principle of aid that’s based on student equity. I also had the incredible honor to work with Governor Lynch, a Democrat, Senator King was a Republican. Governor Lynch put together a plan that was all about tilting the curve from New Hampshire’s regressive distribution to progressive. I think regardless of whether you’re Republican or Democrat, the focus on student equity, that is a bipartisan principle. Are there going to be differences on the type of funding, the tax policy? Yes. Are there going to be differences over the degree of state versus local control? Yes. Those are knobs that are decent policy debates, but on the core issue of student equity, the Commission may put forward a principle that really starts to draw people together, that can establish a more bipartisan consensus.
Great, good, I’m glad to hear your optimism.
Ardinger: I am optimistic! You gotta be! It’s about public schools. It’s about kids going down in June and September with parents starting their first day, and I don’t make light of it.
Representative Myler, I just wanted to ask you, first, do you feel like you’ve heard from a large enough and representative enough kind of swath of the public? And could you share those key takeaways that have come from public input?
Myler: The goal that we had was to try to engage as many people as we possibly could throughout this process. And I mean we talked with educators, we talked with business managers, school business managers, managers from municipal entities, we talked with taxpayers, we talked with people over 65, students. The engagement was, I think, very positive. Plus, at the end of every one of our meetings, Commission meetings, Chairman Luneau opened it up for those who were listening so they could have input. Plus a formal survey that took place, the Granite State Survey out of UNH. Plus, we had a detailed survey of those who worked in the school system and we got responses from teachers, administrators, paraprofessionals, custodians. So we try to provide multiple opportunities for people to give us input. And as a result of that we basically came out with nine different findings, and those findings that will be part of the report. People felt that there was inequity in funding of schools that was one of the key findings. There were general concerns about property taxes and the level of property taxes and the need for some kind of relief. We had an interesting — we talked to students — one of the things that students said was that they love their teachers, but in those areas, the poor areas, the more impoverished areas, the under-resourced areas, they were concerned they did not have enough teachers. They said, if we had more teachers we can have more offerings, we can take more classes. So those are just some of the things that we found through our engagement process.
One thing I wanted to just highlight was this the idea that people seem to overwhelmingly support quality schools and property tax relief, but they don’t seem to really support any of the alternatives to the current formula. So where does that leave you in terms of building public support?
Myler: Well the conundrum that we found was this: That there was a concern about the over-reliance on property tax as the source of funding for schools, but as you begin to say, well what are the other alternatives? I mean a lot of folks thought that we’re going to just come up with new taxes. That was not what — we did not find from the engagement people. I mean that’s the dilemma, that’s the frustration I think that the body politic has in the state, that although there’s a concern about the reliance on the property tax, there is no universal understanding of, oh, let’s move to sales tax, let’s move to an income tax, let’s move to another kind, that wasn’t there either. So we are kind of left with this conundrum. We’re concerned about property taxes and the role they play, but there is not a hue and cry to say, let’s go to another form of tax that could provide some property tax relief if we had other forms of taxation.
Luneau: Just to add something really quick to add your question, Sarah. But you mentioned it you know: high quality public education. I mean I’ve been to more school meetings then I even care to think about sometimes. And there’s nobody that stands up on the floor and says, I’m not for high quality schools, I’m for low quality schools. Nobody says that. Even people who vote down a school budget are for high quality schools, everybody is for high quality schools. And how do we know that? Because on average New Hampshire has high quality schools. And who has said that? The people writing the big checks. Because we pay for it with property taxes. So they are putting their money where their mouth is, when they say “we want high-quality schools” So the expectation in New Hampshire is high quality schools. Now, we’ve got some towns where people are taxing themselves out of their homes because they want high quality schools, and they have low property values overall. But they want high quality schools, and it pains them when those communities can’t raise enough through property taxes to deliver that education that they expect. But it’s what everybody expects, by and large, throughout the state. That’s what we want for our kids. And I think that by itself lends so much credibility for the outcome-driven model, because nobody on the floor of any district meeting, any school meetings, is saying, I think we need to have a student teacher ratio of 8 to 1, or, we need to have a student teacher ratio of 17 to 1, or to 17.3 to 1. Nobody talks about that, people might talk about AP classes, people might talk about world languages and things like that. But at the end of the day they want high performance schools, and they want their students to be high performing students.
Myler: And on that point, David, the question is, what is the return on investment of quality schools? What’s the ROI? And the ROI is very clear. You have higher property values in those school districts. You have businesses that want to move into those school districts because of the high quality. So there was a direct ROI on the investment of quality schools. There’s no question about that. And so that’s why you know you want to provide equity across the board so that throughout the state there is a high return on that particular address.
It just feels like — and maybe this comes back to your statement about “our kids” “our students” — getting people to think, you know, of course yes they want quality schools in their own communities, but it’s another thing to say, okay, let’s make sure that all communities have that. That feels like the harder piece to get people to, kind of, come around to.
Myler: And we need to realize, we’ve always touted, across the board we do great on tests. We spend a lot of money on this. But coming back to what AIR has said very directly, and what Bill talked about, and they said yeah, from a general standpoint we’re doing great. But there are pockets within the state that aren’t doing great. And that’s why the student-centered approach is so vital to try and provide for those areas that aren’t doing great, an opportunity to do great.
Luneau: If we could title our final report “Our Kids” I think we do that.