HB 435 and the other pending charter bills represent a significant increase in New Hampshire’s already escalating charter school expenditures.

Charter enrollment and expenditures are growing quickly

Here’s a chart showing enrollment and expenditures since 2007, projected out to 2019.  Enrollment is projected at current growth rates.  Expenditures are projected based on HB 435.

Charter school enrollment in New Hampshire has been doubling every three years.  In 2009, leaving aside the Virtual Learning Charter School (VLACS), we had 585 charter students in New Hampshire, most in charters aimed at helping at-risk children.  This school year, we have about 1,977 charter students, the great majority of whom attend high end charters.  Next year, NHDOE estimates that enrollment will be 2,884.  None of the four new charters starting up next September or the 10 charters in the application pipeline will focus on at-risk students.

As recently as 2009, charter school expenditures were about $3.5 million. Next year, expenditures will be over $23 million – a 557% increase over 6 years.  Under HB 435 the cost could increase by another 17% to $27 million.

Charter aid has increased while all other education aid has stayed the same or decreased

This chart from NHDOE shows the percentage growth in charter funding annually since 2009 compared to other categories of education funding – state adequacy aid grants, catastrophic (special education) aid, technical education tuition and transportation and building aid.  Only charter funding grew.

The fiscal impact of HB 435

In its current form, HB 435 increases the per-pupil tuition payment from $5,498 under current law to 50% of the statewide average cost per pupil.  The difference is $1,231 in FY 15 but would increase annually as statewide average cost per pupil increased.

The HB 435 fiscal note was a year old when the House voted on the bill on January 8th this year but has recently been updated.  It now projects the cost of the bill at $2,763,078 for 2015.  If the bill were amended to include the same amount of differentiated aid provided under the current bill, the cost would increase to $3,705,272.

In order to better understand the real impact of HB 435, I have extended the figures out to 2019.  Several factors affect the projected figures.

Increased tuition aid per student would begin to be reflected in VLACS funding starting in 2016.  In addition, NHDOE projects continued substantial enrollment growth based on the five charter applications currently under review. (Another five applicants have submitted letters of intent to apply.)  I have used the NHDOE figure for FY 16 and projected enrollment at current growth rates out beyond that.

In addition, since FY 08, the state-wide per pupil cost of education has increased an average of 3.87% per year.  Since HB 435 indexes tuition aid to the state-wide per pupil cost, I have projected that tuition aid will increase by 3.87% per year as well.

Based on these assumptions, HB 435 as it stands would cost the General Fund an additional $6.5 million compared to current law in FY 16 – or $7.8 million if the bill were amended to include differentiated aid.

Over the next 3 year period, under current law, charters would cost the General Fund just under $100 million.  Under HB 435, charter school cost would increase to almost $119 million without and $123 million with differentiated aid.

Three additional charter bills pending could impact state or local expenditures

HB 1394 is a one sentence bill that appropriates $600,000 to pay for charter school facilities.  This would be virtually all the school building aid available in New Hampshire next year.

HB 1393 requires school districts to pay charter schools a portion of the tuition under certain circumstances.

And HB 1392 could contribute to enrollment growth by repealing  RSA 194-B:3-a, V(c), which says,

“Not more than 10 percent of the resident pupils in any grade shall be eligible to transfer to a chartered public school in any school year without the approval of the local school board.”