Last week, a Rockingham County Superior Court judge issued a directive to the state: Increase per-pupil school funding immediately.
In a pair of orders issued Feb. 20, Judge David Ruoff reiterated two sweeping decisions he made in November and rejected the state’s efforts to reconsider them. Those November decisions found the state is paying too little for schools and is not meeting its constitutional obligations. This month, Ruoff again ordered the state to pay nearly twice as much per student — $7,356.01 — and retool the statewide education property tax to distribute money to property-poor towns.
In court, the state has vowed to appeal Ruoff’s school funding orders to the state Supreme Court, setting up a legal fight that could take years.
But in the State House, lawmakers are considering their own funding bills. On Feb. 22, the House took up a handful of bills that would boost adequacy grants, though not to the level that has been dictated by the court.
Here’s a guide to what the House is considering and not considering.
A bipartisan bump in per-student funding
Last week, the House approved a bill that would increase how much the state pays to schools through its “adequacy formula” — which gives school districts a set amount per pupil every year.
Currently, the state pays a base amount of $4,186 per student — and more if the student is enrolled in the free or reduced-price lunch program, requires special education, is an English language learner, and other categories. That amount was increased in 2023 as part of the budget, up from around $3,800.
House Bill 1583 would increase that base amount to $4,404 per pupil. And it would include two programs to target additional aid to lower-income school districts.
One program, known as “relief funding,” would increase the money paid to schools depending on what proportion of their students qualified for free or reduced-priced lunches, meaning their families make below 185 percent of the federal poverty level. The other, “fiscal capacity disparity aid,” would distribute more funding to school districts whose property values per student were below a certain level.
Towns must use local property taxes to pay for the bulk of their school costs; districts with lower property values often have lower budgets and higher taxes.
The bill passed the House floor last Thursday and heads next to House Finance for further review.
Increases to special education approved
House lawmakers are also vying to spend more state money toward supporting special education costs.
Currently, schools are given $2,142 per student receiving special education services — on top of the $4,182 the student receives in base aid. But the level is rigid, and does not account for students who need more or fewer special education services.
House Bill 1656 would change that approach by introducing graduated funding that would pay school districts more for students who need more help. The bill would separate student disabilities into three categories. Students in Category A would include those who require out-of-class special education services less than 80 percent of the day – the least expensive category; Category B would include those who require out-of-class services more than 80 percent of the day; and Category C would include those who require services in separate schools, hospitals, or facilities.
The payouts would rise from $2,642 per Category A student to $5,285 per Category B student to $7,927 per Category C student.
HB 1656 also passed the House on Feb. 22 and also heads to the Finance Committee.
Return to ‘donor towns’ rejected
Neither bipartisan funding bill that passed last Thursday would fully address Judge Ruoff’s order in one lawsuit that the state pay at least $7,356.01 toward adequacy. And lawmakers shelved a bill that would have addressed Ruoff’s order in the second lawsuit.
House Bill 1686 would require the state to gather any excess statewide education property tax payments collected by towns and cities and add it into the state’s Education Trust Fund to be redistributed to other towns. That approach would mean that towns in school districts that raise more than they need to pay for their schools would give up the money to help other districts, creating what opponents call “donor towns.” Currently, wealthier towns are able to keep the excess property tax collections and use it for non-school-related spending.
The donor town model has long been politically controversial, but Ruoff was clear: Allowing towns to retain their excess collections created an uneven tax, which he ruled is unconstitutional.
Lawmakers nonetheless voted to table HB 1686 rather than passing it before a key legislative deadline, effectively killing the bill.
Pending an appeal and a stay by the state Supreme Court, New Hampshire is technically not complying with its funding orders. But Rep. David Luneau, a Hopkinton Democrat, hailed the two funding bills that passed, which had the backing of the leading two Democrats and Republicans in the House Education Committee.
“Both of those bills clearly showed that there’s bipartisan recognition of the need for school funding reform, obviously not to the degree that the ConVal order has done,” Luneau said in an interview Friday, referring to the Contoocook Valley School District, the lead plaintiff in one of the school funding lawsuits.
“But we’re going to have to build up to that, and ultimately what New Hampshire needs, consistent with the (court) decisions, is comprehensive school funding reform.”
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