Report Predicts State Ed Funding will Shrink

Dan Gorenstein's picture
By Dan Gorenstein on Thursday, August 5, 2004.
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A new report shows the New Hampshire's education funding system will reduce the state's share of funding into the future.

New Hampshire Public Radio's Dan Gorenstein has more.

The non-partisan New Hampshire Center for Public Policy Studies reports that the state's share of education aid has continually slipped since 1999.

And according to the study's author Rick Menard, the state's recently passed education funding plan only speeds the decline.

Minard says assuming the plan remains in place, education funding will quote look remarkably similar to the one that the New Hampshire Supreme Court deemed unconstitutional in 1997 unquote.

The plan reduced the amount of adequacy aid, and ties future increases to the rate of inflation.

Rick Menard.

1:51 for the last three years, school districts have increased their spending by about 9% a year. Well above the rate of inflation. If that rate continues at 9%, and inflation continues at about 2.8%, state aid will grow at 2.8 percent, spending will grow at 9, and the difference will have to come from local property tax.

Menard says, if trends continue, the state wide property tax would have double in five years to keep spending at a 9% increase.

Menard did not examine precisely what school districts are spending.

But he did say the consumer price index fails to measure the full cost of education.

One of the steepest increases school districts face is the rising cost of healthcare.

Senate Majority Leader Bob Clegg defends the funding plan the legislature passed this spring.

He believes lawmakers have done a competent job in assessing the cost of providing an adequate education.

Clegg says the state needed some vehicle such as the consumer price index to control spending increase.

The Senator says the report pinpoints why costs are going up.

11:06...it's the local decisions that are causing the property tax to rise. It's not the lack of state dollars, it's the lack of constraint by the voters in the local communities.

The Center's Rick Minard isn't sure whether local communities will continue to increase spending at current rates.

But he points to his study as an indicator of what may come to pass.

T.7
4:56 we don't really predict how any town will behave....it's a political question. But in the snapshot it's a trend you see in that direction.

Minard says IF communities do outpace the state's share of education aid that will lead to what he calls an erosion of tax fairness.

That's because property poor towns will have to raise more money than property wealthy communities.

The notion that the current plan isn't a long term solution is shared by the three major gubernatorial candidates.

Democrat Paul McEchern advocates replacing the statewide property tax with an income tax, and says the study demonstrates how corrupt the current system is.

John Lynch agrees change is needed, but does not support an income tax.

So far he has been vague on how he would increase the state's share of education.

Governor Benson, who lobbied for the current system, but would not sign it, says changing the constitution is essential to reforming the education funding system.

For NHPR News, I’m DG.

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