State Reduction In Education Funding

Understanding The Impact In Pittsfield

Since August, the Pittsfield School District School Board, administration, and faculty have been preparing the district’s 2017-2018 proposed budget for presentation to the voters of the district in March 2017.  While the balance between the district’s tax rate and the obligation to provide an education to the children and youth of Pittsfield creates an annual tension, this year’s budget development is presenting a greater challenge than usual.  This has occurred for several reasons, and this article is the first of several that will review this process and challenges for Pittsfield voters.

A critical aspect of budget planning is consideration of revenue sources to support the schools.  Schools in New Hampshire are funded from two main sources:  (1) the state, through its “adequacy grant” and (2) the local school district, through an annual district assessment.  This school year – 2016-2017 – the state is estimated to contribute $4,256,824.22 to the operation of Pittsfield’s schools, while local Pittsfield taxpayers are estimated to contribute $3,908,583.00.  Lesser amounts of funding are available from other sources, including federal and competitive grants.

The state’s contribution has been the subject of much discussion and several lawsuits claiming that the education of children and youth is a state responsibility; this issue has been raised in many states over the past fifty years.  The most famous of these lawsuits in New Hampshire is known as the “Claremont Decision” and centered on the argument of five towns – including Pittsfield – that the state’s system of funding was unconstitutional, disadvantaging children and youth property-poor towns.

The court ordered the state to change its system of funding.  To do so, the state was required to determine the cost of an “adequate education” and to provide payments to school districts to cover this cost.  Unrealistically, the state’s estimation of an adequate education in New Hampshire is about $3,500/year per student, with additional funds provided for students in certain categories, such as special need students and students for whom English is not their native language.

However, the actual average cost per student in New Hampshire (from 2014-2015, the latest data available) was more than $14,000, or four times the funding that the state provides.  When first instituted several years back, this funding scheme placed an unusual and inequitable burden on some towns in the state, particularly towns which would suffer a large drop-off in state funding due to the change in funding formula.  To attempt to remedy this, the state has been providing “stabilization grants” to a number of towns to mitigate against a large and sudden drop-off of state funding.  Pittsfield has been receiving more than $2,000,000/year in stabilization funds.

However, in 2012, the state adjusted its adequacy formula to provide a change in their stabilization grants.  This change dictated that each district’s stabilization grant would decrease by 4% per year for twenty-five years beginning in the 2017-2018 school year.  This reduction would eventually completely eliminate these grants to school districts.  For Pittsfield, this means about $86,000 reduction in our state grant next year and an additional $86,000 reduction per year in each of the following twenty-four years.  Using current figures, this amounts to a tax impact of about $.32/thousand for Pittsfield taxpayers per year for each of these twenty-five years.

Like a homeowner who suffers a reduction in income, the district is now faced with difficult choices:  do something to find more income or cut back on expenses.  For the school district, this forces the district to either secure additional revenues or reduce services and supports to its students; of course, the district can also do some of both.

School Board Chair Mike Wolfe attended an organizational meeting of towns and school districts negatively impacted by the funding change.  The group, organized by town officials in Franklin, plans to bring the issue to the legislature in hope of relief.  This initiative is important for the children, youth, and taxpayers of Pittsfield; we’ll have to wait and see if relief is in the cards.  In the meantime, the district is making hard choices about next steps for the schools.