It’s school budget season in New Hampshire - and this year, the numbers are more convoluted than usual.
Aside from the perennial tensions over rising education costs and high property tax rates, many districts are facing a dip in enrollment related to COVID-19 that could cost them millions of dollars in state aid. Add to that a big infusion of COVID-19 federal relief aid, and it gets pretty complicated.
Here’s what you need to know about school budgets in New Hampshire during the pandemic.
What is the ‘COVID effect’ on school budgets this year?
Public school costs in New Hampshire are covered in large part by local property taxes, but each year, the state sends an important kind of aid to districts called “adequacy aid.” This per-pupil aid is calculated largely on a district’s overall student enrollment, as well as its poverty level from the prior year.
But during the pandemic, public school enrollment dropped significantly in many districts, as some parents decided to homeschool their children or send them to in-person classes at private schools. In addition, a change in the federal free and reduced price lunch program during the pandemic has made it difficult for districts to measure poverty levels and therefore, state aid (more on that here).
If New Hampshire calculated next year’s state aid based on this year’s aberrant enrollment and poverty numbers, districts would lose out on millions of dollars. However, popular bills in the State House could offer a quick fix, by basing most districts’ state aid on their enrollment and poverty numbers from 2019, rather than 2020.
What are schools spending on COVID-related expenses, and where is the money coming from?
It costs money to manage COVID-19, and with new virus variants, updated CDC guidance on school reopening, and a pediatric vaccine still in the works, schools expect to continue spending money on mitigating the virus in the coming academic year as well.
Some schools in a hybrid or remote learning model saved money for certain budget line items, but even without everyone back in the classroom, districts are spending big on COVID-19. Schools have purchased laptops and WiFi hotspots for students without access to technology at home; installed plexiglass barriers on student desks; updated HVAC systems; bought masks for teachers; and hired additional nurses, janitors, and guidance counselors.
And to do this, schools have spent a considerable amount of federal COVID relief money. So far, New Hampshire public schools have been allocated $240 million in federal aid. This aid is targeted at districts with high poverty levels, and more is expected this spring.
Are there limitations to current and future federal COVID relief funds?
As with most federal funds, there’s a lot of fine print on what the school relief aid can cover.
"The devil is in the details," said Carl Ladd, Executive Director of the New Hampshire School Administrators Association. Ladd said, so far, there have been strict rules about the federal relief money going to "supplement" services at a district, rather than "supplant" existing ones.
That means that if a town is facing a revenue shortfall and potential cuts to staff or programs, it shouldn’t rely on federal pandemic aid to fill in those gaps. Instead, the relief aid should cover services that address the impact of COVID-19.
School leaders are also eyeing the $1.9 trillion relief package put forth by the Biden administration. If signed into law, it could send an unprecedented amount of federal money to New Hampshire schools. But it’s not clear what strings will be attached to these funds. With towns just weeks away from voting on next year’s school budget, school districts can’t bet on this quite yet.
What’s the latest with the school funding debate in New Hampshire?
Many lawmakers on both sides of the aisle agree that the current formula for calculating state school aid is outdated. As education costs rise, so does the burden on taxpayers in many communities. But there’s not much consensus on how to fix this.
Last year, a Commission to Study School Funding found that in spite of New Hampshire taxpayers spending more per pupil than most other states, the distribution of state aid was "regressive." The commission heard several proposals for overhauling the school funding formula, including redistributing the state’s current level of aid based on student need. But some of these proposals are already getting pushback from wealthier towns that fear giving up some of their tax revenue and becoming a "donor town."
There’s also a case about education funding at the New Hampshire Supreme Court awaiting a final ruling. In the meantime, several bills in the State House incorporate some of the Commission’s recommendations. But with the stress of the pandemic, lingering questions about economic recovery, and a focus by the Republican majority on tax cuts, it could be a while before lawmakers tackle the school funding formula head on.