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School funding fix is offered

State House Bureau

January 31. 2013 8:26PM

CONCORD - The state Senate voted 23-0 to approve a bill Thursday to halt the drop in state education money for 77 communities, including the state's two largest cities - which stand to lose hundreds of thousands of dollars.

Senate Bill 40 would essentially provide the same amount of state aid to all New Hampshire school districts this fiscal year as they received the past two years, something the 2011 law did not intend.

However, without the fix, some cities and towns would see property taxes go up.

"By passing this legislation, we will prevent confusion, delay and potential increases in tax bills for our citizens," said the bill's prime sponsor, Molly Kelly, D-Keene. "Without quick action on this correction, the citizens of cities and towns could potentially face a higher tax bill."

She and others called the bill a simple fix that does not cost the state additional money and does not impact future budgets.

The problem arose when the Department of Education erroneously told communities they would receive the same state aid as they did in fiscal 2012 and 2011.

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.

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

School districts 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.

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 school districts would receive lesser amounts of state aid without the adjustment.

After the vote, Senate Majority Leader Jeb Bradley, R-Wolfeboro, said the bill is important to protect students and taxpayers.

"This technical correction will fix an error by the New Hampshire Department of Education and will ensure the education funding law passed in 2011 is implemented as the Legislature intended, resulting in the stable, level funding of all our school districts within the existing budget appropriation and will not increase state expenditures," he said.

SB 40 now goes to the House for action.

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