By GARRY RAYNO, InDepthNH.org

CONCORD — Lawmakers will revisit a proposed statewide cap on local school budgets after a Finance Committee subcommittee voted down party lines 4-3 to resurrect House Bill 675.

Sponsored by House Deputy Majority Leader Joe Sweeney, R-Salem, and House Majority Leader Jason Osborne, R-Auburn, the bill barely passed the House last session and was referred to the House Finance Committee which decided to retain the bill to consider in the upcoming session.

The proposal would use the average student population and the consumer price index to set an annual cap on school district budgets.

An amendment from Division II chair Rep. Keith Erf, R-Weare, removes the five-year average used in the original bill replacing it with the previous year’s average daily membership and Consumer Price Index for the Northeast to set the cap on the next year’s budget.

Erf’s amendment would combine the two figures beginning July 1, 2028, when setting the cap, while the original bill would have allowed a district to choose one or the other figure, either the percentage change in average daily membership or percentage change in the CPI.

By combining the two figures, if the average daily membership falls as has been the overall trend for the past decade, the caps on the next school year’s budget could result in school districts having less money than current year’s budgets.

Rep. Kate Murray, D-New Castle, opposed the proposed change and the bill saying there are too many unknowns to be proposing a statewide budget cap on school districts.

“The state is in a state of flux with the lawsuits and the fallout from the lawsuits,” she said, alluding to the recent Rand decision that found the state has not fully funded the cost of an adequate education for its students and relies on local property taxes with widely varying rates to pay a portion of the state’s obligation, which is unconstitutional. 

The state constitution requires state taxes to be proportional and reasonable, which wildly varying property tax rates are not.

The Attorney General’s Office has asked Rockingham Superior Court Judge David Ruoff to reconsider his decision.

A hearing was held earlier this week on the State’s reconsideration motion, and Ruoff is expected to release a decision by the end of the month.

The State has to ask for reconsideration before it can appeal the decision to the state Supreme Court.

At yesterday’s Division II meeting, Murray also noted that until the lawsuits are finally settled, the cost of an adequate education is unknown, although Ruoff set the figure at $7,356 per pupil versus the current rate of $4,266.

“I would feel better about a cap if we were adequately funding education in the first place,” she said, but noted the state is not.

The state pays about 20 percent of the cost of a public education, if the Statewide Education Property Tax is not included, while the national average for states is 47 percent of the cost.

“This cuts off the bottom end when we are not funding it enough at the other end,” Murray said. “This to me points education in the wrong direction with a group of students not adequately funded at either end.”

Murray was not the only Democrat speaking against the proposed bill.

“I represent a (school) district that came out in force (against) capping their school budget,” said Rep. Eileen Kelly, D-Bradford. “To me, this is taking away local control.”

The Kearsarge Regional School District had record turnout last spring to oppose a petitioned warrant article to cap the school budget 17 percent less than the current spending plan. District residents voted 1,435 to 113 to defeat the proposed budget cap.

A couple dozen school districts around the state had warrant articles seeking to cap budgets this spring. All but one was defeated.

 The House Finance Committee will next have to decide what action to take on the amended HB 675 but is likely to vote down party lines to send the bill to the House floor in January.

The attempt to cap school budgets statewide is not the only attempt by the Republican controlled legislature to usurp what has traditionally been local purview. The legislature passed a number of bills last session restricting city and town zoning and planning regulations.

They have also passed numerous bills dealing with school curriculum and policies that once were up to local districts and school boards to decide.

The Legislature reconvenes for the 2026 session Jan. 7.

Garry Rayno may be reached at garry.rayno@yahoo.com.