Newsrelease: Gubernatorial Candidates Respond to Ed Funding Survey

Oct. 23, 2012

PORTSMOUTH - Both gubernatorial candidates would support changes to NH's education funding formula under specific circumstances and each has backed ed funding constitutional amendments offering an opportunity to eliminate the Statewide Education Property Tax, the Coalition Communities said Tuesday.

The Coalition, which is comprised of 36 former "Donor communities" led by Portsmouth, said Democrat Maggie Hassan and Republican Ovide Lamontagne stated their positions in the group's traditional pre-election survey.

"The candidates for governor clearly understand that there is more to do when it comes to education funding in New Hampshire," said Pat Remick, the Coalition's coordinator. "Some politicians would like everyone to believe that the issue is resolved once and for all but as long as the Statewide Education Property Tax exists,  there is a risk of a return to the divisive Donors vs. Receivers system that cost only certain NH communities $160.7 million."

Lamontange, who was among those working with Governor Lynch to craft an education funding constitutional amendment, said he supports an end to the Statewide Education Property Tax (SWEPT) if an amendment is passed. "After enacting a constitutional amendment the Legislature should look to target aid through an Augenblick-style formula," he said, referring to the targeted education funding system developed in the mid-1980s. The Legislature never fully funded it and the courts later overturned it.

Hassan, meanwhile, said, "I think we must be continually reviewing the school-funding plan to make sure we are keeping track of the ever changing educational demands of our state, but I do not foresee major immediate changes."

Hassan said that as a state Senator, she supported a constitutional amendment "that would have ensured that the state maintain its responsibility for education; allowed it greater flexibility to target aid; and would have given New Hampshire the opportunity to eliminate the statewide property tax. When Republican legislators failed to support that amendment after several months of negotiation, we made sure the school-funding plan we passed held communities harmless."

She added she did not support the most recent amendment, which was narrowly defeated by the NH House in June, because "I fundamentally believe the state has a responsibility for education, and I will not support anything that lets the Legislature walk away from that."
Formed in 1999, the Coalition believes the State could eliminate the SWEPT and use existing revenue streams, such as lottery proceeds and the real estate transfer tax, to give more education aid to needy towns if it was not required to send the same per-pupil amount to every community, including those that can afford to educate their schoolchildren. A constitutional amendment is necessary to allow NH to join 48 other states in providing "foundation" aid to supplement what communities cannot afford, rather than pay the first and last dollar for adequacy.

Between 1999-2005, New Hampshire communities with high property values were forced to "donate" $160.7 million of their residents' tax dollars to other municipalities, many with higher median incomes. Since 2005, "Donors" have been allowed to direct any SWEPT raised above the State-defined per pupil cost of adequacy toward local education expenses ($3,450 compared to the nearly $13,000 average cost statewide). Both candidates said they support continuing the policy. However, a future Legislature could change it and implement a formula that returns "Donor" communities.
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• The NH Supreme Court has ruled that whatever the State defines as an adequate education, it must pay for in total -- making NH the only state in the nation required to fund the entire cost of adequacy.
• This means NH must raise enough from the Statewide Property Tax and other sources to finance the same “adequate education” payment for every schoolchild, regardless of the community’s wealth.
• Only a constitutional amendment would let the State send aid to communities that need it, rather than be forced to give money to those capable of financing all or part of an adequate education for their children.
• The Legislature adopted a definition of an adequate education and a legislative committee is now working to determine its cost by Feb. 1. There are estimates it could total $1.5 billion to $2 billion.
• If the cost of adequacy increases to $1.5 to $2 billion, where will the additional $610 million to $1.1 billion come from? The State currently pays $527 million while the Statewide Property Tax raised from local taxpayers adds $363 million -- for a total of $890 million in State education funding.
• The Governor promised to veto an income or sales tax. No other funding source under study can raise enough to fill the potential gap, increasing the likelihood of much higher Statewide Property Taxes.
• This would reinstate “Donor communities” and severely impact people on fixed and low incomes.
• We will NEVER be rid of the Statewide Property Tax if there is no constitutional amendment to target aid to the neediest communities. With the ever-increasing cost of education, the State will always need the SWPT to pay for education if the same amount of aid must go to every schoolchild. If the State only sends aid to the neediest towns, it may be able to do so without a Statewide Property Tax.
• Providing the same amount per schoolchild widens the gap between children in needy communities and those in towns able to raise more. Under a previous NH aid formula where the same amount was allotted per child, NH was one of only six states with more than a $1,000 per-student gap between highest and lowest poverty districts. The gap could return and worsen under identical per-pupil payments.
• Independent surveys show that by a 2-1 margin, NH voters support targeting State education funding to needy towns, rather than paying a set per-pupil amount, even if their own town could lose State aid.
• NH taxpayers can’t afford to pay for education in towns that can afford to educate their own schoolchildren. As much as $66 million in State funds could go to towns that never received aid before.
• There are no assurances that local taxes will decrease if the State pays the entire cost of adequacy. One study shows even large increases in State aid to education don’t slow local property tax increases.
• The NH School Board and the NH Business and Industry Association are among supporters of a narrow constitutional amendment that includes targeting, standards of accountability and judicial review.
• The New Hampshire Constitution has been amended over 200 times. A narrow amendment will ensure every New Hampshire schoolchild equal education opportunity while protecting property taxpayers.