Since 1955, the state of New Hampshire has supported local school districts with building and maintaining their public schools. It was one vital part of the school funding puzzle, helping districts keep their buildings safe, up to code, and responsive to student needs.
Here’s what you need to know:
- In 2011, lawmakers placed a moratorium on school building aid funding, halting all future building projects statewide until 2013, except for emergency funding that is authorized by lawmakers on a case-by-case basis.
- The moratorium was never lifted and is still in place to this day. The building aid program issues payments on old awards that were approved before 2011, with a total balance of about $260 million. The state is scheduled to make payments until 2041.
- The NH Department of Education (DOE) estimates that about $650 million worth of school construction or renovation projects are on the current waiting list.
- Building aid is separate from the adequacy grants that schools receive every year. Districts have to apply for the school building aid grant program, and it goes through an intensive review process.
- There are legislative proposals in the 2019 session to lift the moratorium and add money to the fund.
The state of our public schools
In 2017, lawmakers killed a bill that would have lifted the school building aid moratorium in 2019. At the hearing, school board members from across the state told the committee how the moratorium has negatively affected their communities.
Like many school buildings in New Hampshire, four of Rochester’s elementary schools were built in the 1800’s. Matt Pappas, a Rochester School Board member, testified that air quality, overcrowding, and other space-related problems plague the district.
At Woodsville High School in Haverhill, there are no elevators, meaning the upstairs music room is inaccessible to the town’s students who experience disabilities. Plans to move the music room to a handicap-accessible room, fixing the school’s corroded pipes, and addressing space issues would cost the town upwards of $10 million without the building aid program.
Newmarket voters approved a $39 million bond to make repairs to the schools that couldn’t wait for a lift on the state moratorium. Crowded classrooms, limited space for special education instruction and services, and rooms that were not compliant with ADA requirements forced the district to make sorely needed renovations.
Newmarket taxpayers are responsible for the entire cost of the renovations because of the moratorium. Other districts continue to wait for the program to be reinstated and have begun using closets as classrooms or putting several classrooms in their libraries, or continue to use buildings that are not up to code, putting school safety at risk.
How the building aid program works
Districts submit proposals to the DOE, which receives a set amount of money from the general fund for public school building aid. Building aid can be used for land purchase and site development, planning and construction, substantial renovations, furniture, and for building charter schools.
Proposals for building construction and renovation go through a scoring process that takes into consideration the current school’s safety, amount of space and enrollment projections, history, and the district’s ability to raise funds through property taxes.
Grants issued range from 30-60% of the cost of construction, with less wealthy communities receiving more aid than wealthier ones. The rate is based on median family income and the ability of the community to raise money through property taxes (known as equalized valuation per pupil). The average grant is about 38%, according to the DOE.
Example: A school district takes out a 20 year bond for $20 Million to build a new school. If their grant award rate is 50%, then the Building Aid award is $10 Million ($20 Million x 50%). This $10 Million is paid over 20 years (their bond term), which is equivalent to $500,000 per year for 20 years.
The DOE began funding building aid projects through bonds in 2009, following the recession and a state budget shortfall. It has since changed the award structure so that 80% of the grant is awarded upon project approval, and the other 20% is awarded upon project completion.
Funding of the program
According to law, the state can appropriate up to $50 million for the school building aid fund. However, lawmakers have not funded the program since they imposed the moratorium in 2009, except for the mandatory payments on previous projects (known as the “tail”).
In 2019-2020, the “tail” totaled $32 million. The payments will phase out in 2041.
Amy Clark, who manages the school building aid program for the DOE, estimated in early 2017, that $650 million worth of building projects were on hold because of the lack of funding.
School Safety Grants
In 2017, lawmakers approved a Public School Infrastructure Fund partially funded by the 2016 budget surplus. The fund provided a total of $28 million in grants to public schools (including charter schools) for improving safety and security in schools and bringing high-speed fiber internet connections to schools. The fund is a one-time program that is separate from school building aid.
According to the Department of Homeland Security, about 80% of NH districts received funding from the Infrastructure Fund. Most schools used the money to purchase security cameras, safety equipment like panic buttons, and reinforced doors and windows.
Districts quickly applied for the grants, and as of 2019, there is no more money available in the fund.
2019 Legislative Proposals
Legislative proposals in 2019 include restoring the building aid fund. “We’ve been five or six years without building aid,” Senator David Watters said. “We offer funding for emergency safety issues, and some money is available at the discretion of the governor, but, given the life cycle of these buildings, we need $50 million a year to keep up.”
Governor Sununu addressed the school building aid program in his address to the House and Senate.
“My budget is returning to NH what has been missing for too long. A $63 Million dollar fund returning money back to cities and towns for Targeted School Building Aid,” Governor Sununu told a joint session of House and Senate members on February 14. According to the budget report, this will be a one-time fund and will not be ongoing.
Lawmakers are also working to address the school building aid fund in 2019.
There are four bills dealing with school building aid in 2019:
- HB 175 would establish a timeline for applications for school building aid grants and makes changes to the process and application. The House passed this bill on February 14, and it now goes to the Senate.
- HB 176 would amend the current state law by changing the current maximum expenditure for school building aid grants from $50 million per year, including payments on the “tail,” to a minimum expenditure of $50 million per year, not including payments on the “tail.” The House passed this bill on February 14, and now it heads to the House Finance Committee.
- HB 254 establishes a formal school building aid fund, which would receive money generated from the rooms and meals tax. In 2018, the tax would have generated $6.6 million for the fund if it were established, according to the bill’s fiscal note. The House Ways and Means Committee unanimously recommended killing the bill due to its cap on the rooms and meals tax.
- SB 266 would establish a formal school building aid fund, which would receive money generated by the online lottery game Keno (the bill also separates Keno revenues from kindergarten funding). According to the fiscal note, Keno revenues are expected to be about $5.6 million in 2020. The bill had a public hearing on Tuesday, February 12.
Follow Reaching Higher NH on Facebook and Twitter, and sign up for our newsletter, to stay informed about the many proposals regarding the way we pay for our schools, including changes to stabilization grants.
Check our five-part series breaking down education funding in New Hampshire and stay tuned to learn more about how we are paying for school in New Hampshire:
- Part One: The big question for 2019: How will we pay for our schools?
- Part Two: Is an “adequate education” adequate for our students?
- Part Three: Stabilization Grants: A vital part of the formula for NH’s most vulnerable communities
- Part Four: State Education Property Tax: Locally raised, locally kept
- Part Five: While the building aid program is in moratorium, schools have to find alternative ways to make their spaces work