Raising questions about the funding formula

Source: NH Business Magazine

Steve Norton and Greg Bird, from the New Hampshire Center for Public Policy Studies, questioned the state’s education funding formula in Business New Hampshire Magazine.

With the state’s workforce shortage, Norton and Bird write that it might be time to revisit the formula that the state uses to fund public schools. Attracting young workers–and young families–to the state is a top priority. Communities like Dover have already sued the state over funding caps, and other districts have concerns too, they said.

Here’s an excerpt:

[Stabilization grants] represent about $151 million of the approximately $564 million in non-property-tax-based state aid distributed to schools in fiscal year 2017. Stabilization grants were designed to hold communities experiencing declines in enrollment, or other changes that resulted in declining state aid, financially harmless.

Franklin is not alone in facing declining enrollment and a slow reduction in state aid. Moving forward, due to anticipated declines in the student age population and the whittling down of stabilization grants under current law, it is likely some cities and towns will experience an erosion of state aid, if not in nominal dollars, then at least  inflation-adjusted dollars. This will likely put extra financial pressure on municipalities and could hamper the ability of many districts to provide a high-quality education.

All of this raises an important question for public policy makers. There has been a sea change in demographics that has occurred since the original education funding formula was developed and even since it has been most recently tinkered with.

There has been a great recession, new economic pressures and an historically tight labor market. If we are interested in ensuring that our current education funding system is optimized to meet our new workforce woes, is it time to revisit our approach to funding the state’s K-12 system?

Source: Raising Questions About Education Funding | NH Business Magazine