As the Claremont School District reels from a $5 million budget deficit, reducing staff, shutting schools, and fighting to get through the school year, Republicans in Concord are split over how much they should help out.
On one side are those who say the state should provide some temporary financial assistance to give Claremont's school board breathing room as it digs its way out of its fiscal hole. On the other are those who say that would set a bad precedent for future financial crises in other districts. At a key meeting of the Senate Education Committee Tuesday, lawmakers ultimately pushed off a vote on a bailout in order to discuss the matter further.
But whatever they decide for Claremont, Republicans agree on one takeaway from the city’s crisis: The state should impose more oversight over school districts and their budgets. And some say they will propose legislation next year to do so.
Sen. Victoria Sullivan, a Manchester Republican, says she has filed legislation to allow for the possibility of receivership over struggling school districts. In an interview, Sullivan said her bill would allow the State Board of Education to investigate problems in public school districts and assume some management responsibilities over those schools during crises.
“Kudos to Claremont: The community are stepping in to make sure the kids still have their extracurriculars and doing what they’re doing,” Sullivan said. “But we should never get to this point.”
Some Republicans say the state’s Department of Education should impose more oversight. Rep. Jim Kofalt, a Wilton Republican, said the department should conduct regular audits of school district budgets to catch any irregularities before they balloon.
Others have raised the possibility of legislation that would enable recall elections against school boards if residents feel they have caused a crisis and want new leadership.
“Voters who feel that they need new boards don’t have a mechanism to do so,” said Rep. Daniel Popovici-Muller, a Windham Republican.
Proposals to increase state authority
Rep. Rick Ladd, a Haverhill Republican and the chairman of the House Education Funding Committee, noted a number of bills submitted ahead of next year’s session that would enhance the state Department of Education’s authority, including one of his labeled “relative to the intervention of the department of education into a school or school district during a financial emergency.”
“There has to be some kind of a hammer or accountability oversight that the Department of Education and the state treasurer have here,” he said.
The proposals have emerged as Claremont’s woes have entered the statewide spotlight. In August, the city’s school board reviewed an audit and discovered that mismanagement of the budget meant the district had fallen $5 million behind in payments, with virtually no cash on hand to pay those debts and keep the school operating.
That shortfall caused an immediate catastrophe for the board, which faced questions about whether classes could even resume in September. After around 40 layoffs, the closure of an elementary school, and a $4 million loan from the Claremont Savings Bank that is due in April, the district has managed to continue classes this school year, explained James O’Shaughnessy, the attorney for the school board, on Tuesday.
The board has hired an interim business administrator, Matt Angel, to oversee a series of aggressive cuts to services to pay off debts while any mismanagement is addressed. That process could take about two years, aided by the district’s regular allotment of state “adequacy funds” every quarter as well as city property tax revenue, O’Shaughnessy said.
But because of its limited cash flow — and the need to pay back the $4 million loan in April — Claremont will likely have no funds from April to September to continue paying for operations without more financial support, O’Shaughnessy said. That means even with a proactive debt relief plan, and even with its regular quarterly adequacy payments, the district would likely not be able to reopen for the 2026-2027 school year if it cannot access more loans, he added.
A 'temporary' loan fund proposal
This month, two Republican lawmakers — Ladd and Sen. Ruth Ward, a Stoddard Republican and the chairwoman of the Senate Education Committee — have proposed a state-backed solution: a “temporary, targeted” revolving loan fund to help the district access cash quickly.
The two have both proposed an amendment to an existing bill that will be taken up by the House and Senate in early January.
The proposal would direct the state treasurer to create a non-lapsing fund separate from all other funds. The fund would include no more than 75% of the total amount that the state already sends the district in annual adequacy aid. The district would be required to pay any money it withdrew from that fund back to the state with interest, and each withdrawal would need to be made with an agreement among the school board, the Department of Education, and the state treasurer.
For Ladd and Ward, the legislation is an unusual but necessary fix. The preamble of the bill states that Claremont “faces immediate and extraordinary fiscal challenges that may impact its ability to provide an adequate education to its students.”
“We’ve got to keep it narrow in scope. We need to help those kids in Claremont,” Ladd said. “. . . That school has to stay open for the rest of this year. This is one way of doing it.”
But others said the precedent could inspire more mismanagement from other school districts, or allow school boards to evade difficult decisions when facing a funding gap.
“Many of us are concerned,” said Kofalt. “We’re concerned with making sure that the people of Claremont are ultimately able to continue with our schools open, but we are also concerned that this should never happen again in other districts”
And some, like Popovici-Muller, said that lawmakers should come up with a more permanent financial aid approach that is not specific to Claremont.
“This is not something that we’ll be lingering on, but please consider that (it’s) a complicated mess that’s still unraveling," he said. "We’re still trying to understand what happened. We need a more thorough solution.”
Democrats said lawmakers should take more time. Sen. Debra Altschiller, a Stratham Democrat, argued the state should help the district before it begins diving into bigger solutions.
“There’s a leak in their boat, so we have to plug up the leak, and then we can review why there was a leak in the boat at a later date,” she said. “But we can’t let this boat, the Claremont boat, sink with children in the boat, because we want to look at the structure of how the boat was built or the maintenance of the boat.”
O’Shaughnessy echoed that point.
“This is an extraordinary, extraordinary thing that we’re all doing today to ask you to adopt special legislation,” he said. “We wouldn’t be here if there were good alternatives.”
Still, soon after the Senate committee meeting concluded, House Majority Leader Jason Osborne, an Auburn Republican, issued a statement underscoring the political difficulty of a quick decision that could earn the support of the House and Senate.
“House Republicans will fight to protect the taxpayers from bailing out the incompetence of Claremont schools,” he said. “I appreciate the efforts of Claremont’s state senator and look forward to working on a solution that will solve the issue in the long term, not a short-term fix that throws money at the problem and hopes it goes away.”
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