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New Hampshire Business Review asks: “Is it time for Claremont III?”

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This piece ran on June 7th in the NHBR news section but it’s more like a well reported editorial on the dire financial crisis New Hampshire’s property poor school districts face as a result of our apparently unconstitutional system of school funding that results in an unequal and unfair burden on local property tax payers.  Here are some highlights:

 State ed funding puts poor districts in familiar position

“I’ve been here 39 years,” said Corinne Cascadden, superintendent of schools in Berlin, “and I remember when the mill closed. I feel like I’m back where I started. Our schools are at a critical point. We’ve been operating on pins and needles from year to year, and it will only be worse in a year from now.”

Two decades after the NH Supreme Court ordered the state to define an adequate education and pay for it with taxes equal in valuation and uniform in rate throughout the state, the disparate levels of per-pupil expenditures and municipal property tax rates, on which the litigation hinged, have persisted and are on track to widen further.

But recent changes in the distribution of state aid have increased the fiscal pressures weighing on those school districts with the least capacity to bear them, without adding to the already onerous burdens of property taxpayers. 

And Berlin, together with Claremont, Franklin, Pittsfield and other hard-pressed districts, are contemplating returning to court.

Both Cascadden and Middleton McGoodwin, her counterpart in Claremont (who was recently ousted from the job he held for seven years after a bitter budget fight with the school board), said “absolutely” there is growing interest in bringing another suit. In Pittsfield, the school board recently met with Executive Councilor Andru Volinsky, one of the lead attorneys in the original Claremont suit. 

Poorer school districts have been hit hard by shrinking enrollment numbers and decreasing state dollars.

Writing recently in NH Bar News, John Tobin, former executive director of NH Legal Assistance, who represented property taxpayers in the litigation, claimed the situation has reached “constitutional dimensions, so much so that a new school funding suit is urgently needed” and invited interested parties to contact him.

Tobin suggested litigation would claim that the state has failed to comply with the two principles set by the Supreme Court in 1997….

First, the state has failed to fund the cost of an adequate education, since the allocation of $3,606 per pupil is a fraction of statewide average cost per pupil of $15,310. Second, by requiring municipalities with widely disparate property values to fund the balance of its obligation with local taxes levied at disproportionate rates, the state has failed to fund an adequate education with a tax or taxes “equal in valuation and uniform in rate” throughout the state….

SWEPT Allocation

Although in a legal sense the SWEPT is a state tax levied on every municipality at a rate sufficient to raise $363 million, in a fiscal sense it is an additional levy on municipal tax bases of widely disparate valuations.

In FY 2018, the rate is $2.26. Municipalities collect the tax and transfer the funds to the school district. Receipts from the SWEPT are subtracted from the cost of an adequate education to calculate the adequacy grant distributed to local school districts.

Where receipts from the SWEPT exceed the cost of an adequate education — in 36 municipalities with very high property values — the preliminary grant is zero. 

Stabilization Fund

….The stabilization grants were intended to ensure that the total amount of state aid to municipalities did not diminish, despite changes in both the computation of the adequacy grants and the character of school populations. The grants, totaling $158.4 million in FY 2012, equaled the decrease in funding from the total state aid municipalities received in FY 2011. The legislation provided that the same amounts would be distributed in each subsequent fiscal year. 

But legislation enacted in 2015 provided for reducing the amount of the original grants distributed in FY 2012 by 4 percent each year beginning in FY 2017 until they would be eliminated altogether in 25 years. In FY 2018, $144.6 million, or 92 percent of the original amount, will be distributed in stabilization grants….

The effect of steadily reducing and ultimately scrapping stabilization grants will be to decrease state aid to those municipalities most in need of it, and these are the cities and towns where stabilization grants represent a major share of state aid — more than half in some 20 municipalities….

The communities with at least 100 students that are most severely affected include Berlin, Claremont, Franklin, Newport and Pittsfield, along with a number of smaller towns — among them Allentown, Charlestown, Colebrook, Haverhill, Lancaster, Lisbon and Warren.

Stabilization grants amount to 51 percent of state aid in Berlin, 47 percent in Claremont, 48 percent in Franklin, 51 percent in Newport and 48 percent in Pittsfield. Each year, stabilization grants shrink by $219,824 in Berlin, $251,313 in Claremont, $161,400 in Franklin, $146,551 in Newport and $87,412 in Pittsfield. Moreover, as enrollments continue to decline the adequacy grants to these municipalities will also decrease….

In Berlin, the equalized property value per pupil is 29 percent of the state average of $983,646. It is 41 percent in Claremont, 51 percent in Franklin, 48 percent in Newport and 44 percent in Pittsfield….

Likewise, while the Census Bureau reported New Hampshire posted the highest median household income in the country at more than $76,000, the $35,523 median income in Berlin is less than half that, and the $45,859 in Claremont, $43,327 in Franklin, $47,959 in Pittsfield and $49,663 in Newport are not two-thirds of the state median….

“We cannot bankrupt the city,” said Berlin superintendent Cascadden…

She said city and school officials were working together to try to spare taxpayers the impact of dwindling state aid. With four schools on three campuses, “we’re trying to downsize wherever we can,” said Cascadden. “We’re looking at closing one school. We’re relying on attrition by not filling empty positions. We hope for attrition.”…

“We can’t afford electives with just five students,” Cascadden said, “and our students are losing choices and opportunities.” 

West of Berlin, in Northumberland, superintendent Michael Kelley oversees schools in Groveton, Stratford and Stark with total enrollment of about 430 students, including 130 at Groveton High School.

“This area is in dire economic straits,” he said. “The tax base is incredibly small and the tax rate is among the highest in the state. The lack of adequacy aid puts a tremendous cost on our taxpayers.”…

Kelley said that policies to divert students and funding from public schools to private and parochial schools would have a disproportionate impact on a small community like Northumberland, where the loss of state aid would far outweigh any savings from reduced enrollment. “The only place left to cut is programming,” he said, “and we’re already pretty close to the bare minimum at the high school.”….

Get lots more details and examples at: https://www.nhbr.com/June-8-2018/Is-it-time-for-Claremont-III/

 


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