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Coalition Communities Announce New Targeted Aid Bill

Jan. 5, 2005

The Coalition Communities today announced the filing of new legislation to target education aid to needy communities and gradually phase in a common-sense education funding formula over a six-year period, while putting an immediate end to the Statewide Property Tax and Donor towns.

"It's time to solve this problem, once and for all," said Portsmouth Mayor Evelyn Sirrell, leader of the 34-member Coalition of towns stretching from one end of the state to the other. "Our children deserve a good education, our taxpayers deserve to control where their property tax dollars go, and our communities deserve to operate without constant fear that the Legislature will change the formula again and again at the last minute."

Rep. Edmond Gionet, R-Lincoln, initiated the request that the new House bill be drafted using the Coalition's updated distribution formula. Newly elected State Senator Martha Fuller Clark, D-District 24, has filed a request in the Senate for the new bill as well. Rep. Gionet sponsored the Coalition's first targeted aid bill, House Bill 717, which passed the House but died in the Senate two years ago. Since then, both the new Governor and House Speaker have announced support for targeted education aid, eliminating the Statewide Property Tax and doing away with "Donor" communities.

The new bill has not yet been assigned an official House or Senate bill number.

"I am very proud to sponsor this bill again as I firmly believe the Coalition Communities' targeted aid bill will solve the problem and give towns the ability they need to plan ahead when it comes to education funding," said Gionet.

"We must implement a system that considers income in determining whether a town needs help in educating its children. We should never again be in a situation where a community like my town of Lincoln, which has the lowest median household income in the state, has to raise extra taxes to send money to towns that can easily afford to educate their own schoolchildren."

Current sponsors of the Coalition Communities' targeted aid plan include Senator Joseph D. Kenney, R-Wakefield, Senator Martha Fuller Clark, D-Portsmouth, Rep. Betsey Patten, R-Moultonborough, and Rep. Jane Langley, R-Rye. The legislation uses a "foundation" aid approach based on formulas used in more than 40 other states to first determine a community's education need and then its fiscal capacity, with the state providing aid to towns unable to meet their education costs.

"This legislation offers the best long-term solution for our entire State. It will put an end to a system of education funding that has unfairly pitted community against community." said Fuller Clark. "This issue must be resolved so that communities can turn their attention to the important task of educating their children without worrying that they will have to redo their budgets at the last minute again and so the Legislature can turn its attention to the other critical issues facing New Hampshire."

Sen. Kenney agreed: "It has been stated that the state budget is the most important issue to address this session, but it surely cannot be balanced unless there is a permanent solution to educational funding. It's time to resolve educational funding and put it behind us once and for all."

The 2005 legislation is an updated and fine-tuned version of legislation developed two years ago by a team of education funding and constitutional experts, including economist Dr. Daphne Kenyon and attorney Martin Gross of the Concord law firm of Sulloway & Hollis. The team's task has been to devise a reasonable alternative to the State's current simplistic and inequitable funding system. They will brief the Seacoast communities of State Senate District 24 at a Jan. 11 meeting in Hampton, and unveil the new proposal to the entire Legislature later in the month.

"After six years of voting on education funding bills while being told we will revisit the issue again the next year, it's time to solve this problem," said Rep. Langley. "We can't be paralyzed by the fear that somebody will go to court. People are always going to court and the developers of this bill are extremely confident that it can be defended in court." (more) Rep. Patten added: "I am looking forward to working with all the stakeholders -- donor and receiver towns, selectmen and school districts -- to come up with a solution that is positive for the education of our New Hampshire students and for the taxpayers that support them."

By targeting aid to communities that truly need it - based on well-researched formulas that weigh each town's need against its fiscal capacity - the State's proportionately raised existing resources in the Education Trust Fund can be used to foster equal education opportunity for every New Hampshire schoolchild. The legislation does away with the shell game of the Statewide Property Tax - which pretends that local property tax dollars raised from local residents are "State taxes." Actually, Statewide Property Tax dollars never physically leave the community, except in the case of "Donor" towns forced to export local property tax dollars, regardless of their residents' ability to pay.

The proposal establishes the State's commitment to education at the current level plus the increase in the Northeast Consumer Price Index -- $467 million in FY06 -- and sets a clear-cut reasonable cap of future growth by tying it to the Northeast CPI and the size of the student population. It enables all school districts to plan budgets around future aid payments that will be gradually adjusted over a six-year period.

Its distribution formula uses the nationally recognized target of state average per-pupil spending as a measure of "adequacy" ($7,809 in NH) and goes beyond the current system by taking into account such currently ignored factors as the additional costs associated with educating high school students, as well as students with limited English proficiency or those receiving Special Ed services, or free and reduced lunch. These students become "weighted students." Multiplying the per pupil spending amount by the ratio of total actual students to "weighted students" results in a per-pupil base amount of $5,816. The State's current per-pupil spending figure is $3,580.

Highlights of the Coalition Communities Targeted Aid Bill
  • No longer pits community against community for scarce education dollars
  • Eliminates the Statewide Property Tax and Donor towns
  • Uses available resources efficiently by targeting Education Trust Fund monies
  • Can be constitutionally defended because ETF is proportionately raised
  • Provides a long-term solution so communities, and schools, can plan ahead
  • Based on the education funding formulas used in 41 other states but tailored to New Hampshire's unique needs
  • Uses the nationally recognized target of state average per-pupil spending as a measure of "adequacy"
  • Measures local need by number of students. Extra weight given for additional cost of educating high school students, also extra costs for students one of three categories: free & reduced lunch, special ed or limited English proficiency.
  • Weighs local need against local fiscal capacity, including household income as a more accurate measure of town's ability to meet its educational needs
  • Includes a 5-year transition to full targeted aid in 2011, giving current Receiver towns time to adjust to new formula
  • Requires grants to be spent on education within two years
  • After transition, growth in costs equals the Northeast CPI plus rate of increase in total K-12 pupils; current law has no cap on grants funded in State Budget

For more information, contact Pat Remick, 610-7281


 1 Junkins Ave., Portsmouth, NH, 03801, Tel: (603) 610-7281Fax: (603) 427-1575 Email: Coalition@ch.cityofportsmouth.com