Voucher Bill Amended Again in New Hampshire

Latest Voucher Bill Amendment Removes Grants for Wealthier Communities

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The House Finance Division II Subcommittee released an amendment to SB 193, the statewide voucher bill, on Tuesday that removes the $1,500 adjustment grant for wealthier communities.

The subcommittee met on Wednesday, where they were expected to vote on the bill and refer it to the full Finance Committee. Instead, they recessed the work session until April 4 to work on the bill further.

Amending the Adjustment Grant

The previous amendment included a one-time grant of $1,500 to offset the loss of funding districts would experience from students opting to take vouchers.

Due to the way that New Hampshire funds its public schools, that meant that wealthier communities could financially benefit from a loss of students. In New Hampshire, the state gives districts about $3,600 in state funding for each student, which is collected locally by towns through property taxes (referred to as the Statewide Education Property Tax, or “SWEPT”). But if towns collect more than they need, they keep the funds and do not give the remainder back to the state.

For example, in Moultonborough for FY 2019, the state calculated the required amount of state aid for education as roughly $2,100,000. For the same fiscal year, Moultonborough will raise ~$6,400,000 through SWEPT*, an “excess” of close to $4,400,000.

Yet, under the previous amendment, they would still be awarded the $1,500 adjustment grant. Here is an example:

Manchester Moultonborough
10 students select a voucher (assuming $5,454 per voucher)
Loss in State Aid $54,540 $0
Adjustment Grant $15,000 $15,000
Net Financial Impact Loss of $39,540 Gain of $15,000

 

Inequities Remain

Tuesday’s amendment changes the adjustment grants so that towns cannot receive the additional $1,500 in funding if they collect excess SWEPT money. However, there are still large inequities in funding between communities. For most communities in NH, vouchers will be paid for out of existing state aid; however, for around 36 communities with the highest property values, the state will pay for vouchers with new state funds. This will increase the total amount of state aid flowing to a select number of towns.

For example, because the state does not collect the excess SWEPT funding that Moultonborough raised in the previous example, the state is providing Moultonborough with close to $14,000 per student in state aid–far above the $3,600 that is given to most districts in New Hampshire. Yet, if Moultonborough students take up a voucher, the state will pay for the voucher with new state money; this would increase the total amount of state aid provided to students from Moultonborough.

Here is a visual example:

Click to view a larger image

Read the full amendment here.