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Senate group gives OK for bill to correct school funding error

State House Bureau

January 22. 2013 10:09PM

CONCORD - A key Senate committee gave the go ahead Tuesday to a bill that would 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.

"Senate Bill 40 makes a very small fix to address a technical error that caused cities and towns to rely on the wrong set of figures in creating their 2013 budgets," said Sen. Molly Kelly, D-Keene, the bill's prime sponsor. "Without quick action on this correction, the citizens' of cities and towns will potentially face higher tax bills."

The state's two largest cities, Manchester and Nashua, will see reductions of several hundred thousands of dollars in state aid unless lawmakers take action, as will Keene and Lebanon.

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.

School district's 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.

"This technical correction will protect students and taxpayers in dozens of cities and towns across New Hampshire by ensuring the education funding law passed in 2011 is implemented as the legislature intended, resulting in the level funding of all our school districts within the existing budget appropriation," said Senate Majority Leader Jeb Bradley, R-Wolfeboro, a bill sponsor,

The bill is likely to be on the Senate's agenda when it holds it first session.

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