Democrats' Proposed Tax to Boost School Aid Draws Applause and Apprehension

Apr 10, 2019

Members of the House Finance Committee present a budget briefing prior to Thursday's vote.
Credit Dan Tuohy for NHPR

On Thursday, the Democratic-led House will vote on its version of the state budget. The budget, which is expected to pass, includes a $160 million increase in state aid to schools - the largest since the state ramped up funding twenty years ago in response to the Claremont lawsuits.

 

But with Governor Sununu’s veto pen at the ready, the budget faces an uphill battle in the next few months.

The education funding package comes after months of testimony from school board members, administration, and families who say the state’s reliance on local property taxes to fund schools has pushed some districts to a breaking point.

“You have Berlin which has to close its elementary school and Pittsfield which has had to cut teachers and programs,” says House Education Chairman Mel Myler of Hopkinton. “It’s kind of a tsunami that’s come forward to us and everyone knows that we need to deal with this.”

Democrat Dave Luneau, also of Hopkinton, says the issue comes up when he and Myler talk with voters.

“The first thing people say to you is: ‘What are you doing about education funding and what are you doing about property taxes?’” he says. “It’s why we put it in the budget, because it addresses the two most important things on Granite Staters' minds.”

House Education Committee Chairman Mel Myler (right) and Vice Chairman David Luneau (left), both Democrats from Hopkinton.
Credit Sarah Gibson for NHPR

The budget proposal stops cuts to stabilization grants and restores those grants to 2016 levels. The next year, it replaces the grants with $150 million of targeted aid to property-poor towns, much like the per-student adequacy formula did prior to legislative changes in 2011.

For Berlin, this would mean over $4 million more in funding over the next two years. In Manchester, it would mean nearly $20 million. In Pittsfield, nearly $2 million.

 

The Democrats say the state can raise the $150 million with a new tax on capital gains, but many Republicans, including Werner Horn of Franklin, question that.

“We need a stable funding source for adequacy reform, and an unproven tax is not stable,” he says. “We don’t have any metrics for how it is going to perform.”

Horn says he was disappointed that Governor Sununu didn’t address the need for basic school funding reform in his budget, instead relying on one-time funds for school building aid and calling for an increase in aid for special education students with especially high needs.

Horn says Republican-sponsored school funding bills were more economical than the Democrats’ and would have a better chance of passing Sununu’s desk. Republicans will likely propose versions of these as amendments during the budget debate on Thursday.

Representative Werner Horn of Franklin.
Credit Sarah Gibson

Lawmakers on both sides of the aisle agree that this budget proposal still doesn’t solve the problem the legislature has wrestled with for decades: the definition - and cost - of an “adequate” education in New Hampshire.

This question has landed the state back in court recently, in a school funding lawsuit in Cheshire County awaiting a final ruling in June. Democrats want to spend $500,000 to create an independent commission that would study the adequacy question and come up with what Luneau hopes will be a “comprehensive solution.”

Horn says regardless, this isn’t the end of the fight.

“Education funding is a fluid situation. It’s going to require the legislature to come back to this again and again.”