January 18. 2013 10:50PM

School funding threatened in NH cities

State House Bureau

CONCORD - Some lawmakers want to delay full implementation of the school funding formula approved two years ago so 77 communities will not see a drop in their state education aid this year.

The state's two largest cities, Manchester and Nashua, could lose several hundred thousand dollars in state aid unless lawmakers take action, as will Keene and Lebanon.

A public hearing on Senate Bill 40, which would delay implementation of the 2011 law, is Tuesday at 1:15 p.m. in Room 103 in the State House in Concord.

The bill would essentially provide the same amount of state aid to all New Hampshire school districts as they received the past two years.

Communities were given stabilization grants beginning in 2012 to ensure they received the same amount of state aid as they received in 2011. While the stabilization grants are to remain the same into the future, the balance of state aid to each community would go up or down beginning in 2013 depending on a number of factors including enrollment and the statewide property tax rate.

However, the Department of Education, which determines what communities receive for state adequacy grants, interpreted the law to mean communities would receive the same state aid for 2013 as 2012.

When the error was discovered and state aid adjusted, 77 communities saw their state aid drop by a total of $3.42 million.

A note on the Department of Education's website reads "Based on a close analysis of the adequacy statute passed in 2011, we have concluded that an adjustment needs to be made to this year's adequacy payments (FY 2013). Several times in the last six months the DOE reported estimated figures for this year, based on the mistaken understanding that the hold harmless provision covered both years of this biennium. However this is not the case for FY 2013."

The problem is that communities approved their school budgets for this school year in the spring of 2012 based on the assumption state aid would be the same as the year before.

The bill's prime sponsor, Sen. Molly Kelly, D-Keene, said the bill does not increase spending for state aid, but essentially says "we'll hold communities harmless for 2013" because that is what they believed would happen.

Without the adjustments, Nashua would receive $342,606 less in state aid; Lebanon, $316,175 less; Londonderry, $307,286 less; Manchester, $193,223 less; Keene, $167,660 less; Newfound Area School District towns $137,755 less; Raymond $135,591 less; and Greenland, $116,858 less.

The remaining 69 communities would receive lesser amounts of state aid without the adjustment.

The Senate Finance Committee will have to decide what recommendation it will make on the bill, before it goes to the full Senate for action.

If the Senate passes the bill, it will go to the House for another public hearing and vote.