By GARRY RAYNO, InDepthNH.org
CONCORD —- Although the legislature has yet to decide how it will respond to two Superior Court rulings on school funding late last year, the House’s chief budget writer wants to transfer the surplus in the Education Trust Fund to the state’s general fund.
At a public hearing Monday before the House Finance Committee, its chairman, Rep. Ken Weyler, R-Kingston, said as a budget writer he wants more flexibility, while the money in the Education Trust Fund can only be used for education.
House Bill 1690 would transfer the surplus at the end of the biennium June 30, into the general fund, whose surplus automatically transfers into the state’s Rainy Day Fund, which is currently at record levels.
“As a finance person, I do not like to see money in this fund that can only be spent on education,” Weyler said, “so with this bill, at the end of the fiscal year we could use this money (for other purposes).”
He noted the $100 million fund for Sununu Center settlements with former residents who were abused is not enough and more money will need to be allocated, and suggested the Highway Fund and Fish and Game Fund may need additional money.
He said when the fund was created, it was intended to fund the education adequacy program only and since that time other uses have been added for funding special education, building aid and transportation.
To have a nearly $200 million surplus you can only use for one purpose, Weyler said, “is not good financial management.”
Committee member Rep. Mary Heath, D-Manchester, asked Weyler if he intended to remove the other uses of the fund as he proposed last year. Weyler said that is not in this bill and could be considered in next year’s work on the biennial budget.
Heath said she would not like to see such things as special education costs go back into the general fund to compete with all other state needs for money.
When those costs were drawn from the general fund, they were never fully funded and school districts received only a percentage of what they were owed, she said.
It would make more sense to leave money in the Education Trust Fund, Heath said.
Weyler said in the past general fund money has been used when it was needed to cover education costs and he did not see why that would be a problem if the money was moved at the end of the biennium.
Rep. Mary Jane Wallner, D-Concord, said if the money is transferred at the end of the biennium it would go into the Rainy Day Fund and not used for other purposes.
Weyler said that could happen.
But Rep. Dan McGuire, R-Epsom, noted the fiscal year 2023 surplus was used to cover costs for specific items when the current budget was crafted and a similar situation could control how much goes into the Rainy Day Fund.
He said the legislature used $100 million to offset the Statewide Property Tax for towns and cities and used $26 million to offset retirement costs for municipalities.
“That was a one-time $126 million in 2023 for property taxes that was not there before,” Weyler said, “but my tax bill went up. Schools will use up every penny. That’s where 85 percent of my taxes go.”
With fewer students, you hear they hired 18 new people, Weyler said. “We have people who do not have a grasp on trying to be efficient.”
Rep. Mary Hakken-Phillips, D-Hanover, raised the issue of the two Superior Court decisions going against the state, one finding the state failing to pay for the cost of an adequate education, and the other finding the administration of the Statewide Education Property Tax to be unconstitutional because of varying rates for communities.
Weyler said he worked with the Legislative Budget Assistant’s office and reviewed all the state money going to public education and the per-pupil share was very close to the $7,400 the judge found to be the state’s share.
But several committee members said the judge’s per-pupil number is the base cost of an adequate education only, not all the things the state pays for such as transportation or building aid.
Several other members noted the money raised through the Lottery Commission constitutionally has to go toward public education, and if the surplus is transferred it might include some of that money.
But Weyler argued the amount of money from the Lottery Commission is much less than the state spends on the adequacy grants to school districts, so accounting-wise the money would be going to public education and not commingled with other state revenue.
The bill was opposed by Brian Hawkins of NEA — NH who said the state has lots of needs at Health and Human Services and Public Safety and that is a good reason not to put the Education Trust Fund money in the general fund where it would quickly be used for things other than education.
He said the workforce shortage has impacted education and additional money for poorer districts could help them compete with those districts who easily raise money for teachers and staff.
Schools are not just competing with other states, but with each other within the state, he noted.
Hawkins said there are many unknown costs for education citing the Education Freedom Account program which has been over budget since its inception and four bills this session to expand eligibility, and the additional costs of charter schools.
He noted the Department of Education received a $46 million grant to increase the number of charter schools and to expand existing ones.
Heath said public charter schools have a percentage of students with disabilities, but the local school districts are responsible for those costs. She asked Hawkins if he knew what those costs were.
Hawkins said he had heard numbers but did not have a figure before him at this time.
Those costs, along with the expansion of charter schools are unknown at this time, and that is why it would be premature to make changes to the Education Trust Fund, Hawkins said.
“These funds belong in public education and they should remain there,” Hawkins said.
The bill was referred to Division Two of the House Finance Committee which reviews education finances.
Garry Rayno may be reached at garry.rayno@yahoo.com. Rayno is InDepthNH.org’s State House bureau chief with 40 years reporting experience.