The community responds to an online charette

By ANDRU VOLINSKY

Last week I posted an online charette asking readers and listeners to chime in with their thoughts about a fair and sustainable school funding system. You can go back and read that post here. Of course, my readership is biased towards fixing a very broken system in real and substantial ways. I get it. You read me for a reason. However, the responses were encouraging.

The Six Foot Ladder

Remember, my charette included a warning not to use a “six foot ladder” because it’s safe when you need a 16-foot extension ladder to get the job done. I suppose some will say we need to start somewhere. This might make sense but we’ve been “starting somewhere” for almost 28 years since the Claremont II decision was issued in December 1997. Jeanne Shaheen was governor, Donna Sytek was speaker of the House and Joe Delahunty was the senate president. A courageous NH Supreme Court gave the governor and legislature 15 months to come up with a fair funding plan. We’re still waiting.

So, thank you to the folks who recommended the short ladder but your proposals won’t work. 

Here’s the scope of the problem.

NH spends $4 billion on k-12 public education each year. The state contributes just over 20 percent or $800 million. The feds contribute about 10 percent or $400 million. The remaining 70 percent or $2.8 billion comes from your local property taxes. Judge Ruoff ruled in August that the state’s share should double to meet constitutional standards. That’s another $800 million. To meet the national average, the state’s share should increase by $1.2 billion. At a minimum, that’s your goal, to find state revenues equaling $1.6 billion to $2.0 billion in a way that is fair and sustainable and that relieves property taxes by the same amount.

You do the math. None of these approaches is enough.

• Legalizing marijuana is projected to produce $25 to $35 million in new revenues each year.
• Reinstating the Interest and Dividends Tax repealed by Governor Sununu and the Republican legislature is worth $180 million a year.
• Business tax cuts implemented by Sununu and the Republicans between 2016 and 2024 resulted in a loss of $1 billion in revenues, but that’s over eight years, so $125 million each year. (For more info about the cuts, which should be restored, go here.)

What if we cut schools and save costs?

• What if we did away with all administrative expenses? I hear about consolidating districts so we don’t pay administrators so much. What if we just cut them all? Well, that’s about 5 percent of the cost of public education or $200 million. We still have $3.8 billion in costs to fund.
• What if we consolidate school districts? There aren’t reliable estimates of cost savings. Also, how much of the savings are offset by increased transportation costs or lower enthusiasm for schools reliant on online programming? Which communities should lose their community centers?
• How about if we defer all building maintenance? That’s one of the moves by the Claremont School District. Does anyone think this is a good idea? Even if you do, it’s about $200-$300 million in savings across the state.
• What if we defund school vouchers? First, we should. Second, it would save $65 million a year which is not enough to fund k-12 public schools.

No, folks, the answer is either we adopt the advice of the state’s expert at our Rand trial or we gather the courage to fund the damned system. The state called one of the drafters of Project 2025 to testify on the state’s behalf at trial, Jay Greene, PhD. His advice? Follow the example of third world countries in how we structure our public schools. Seems ridiculous, but Free Staters led by Jason Osborne are tracking with this advice by attempting to defund public schools so that the only reliable system will be one in which wealthy families pay tuition for their children to attend private schools.

An Income Tax will work.

Except for fears grounded in political cowardice, an income tax will work. A 3 percent income tax with significant deductions for the taxpayer, spouse, dependents, and one for head of household would produce $2 billion in fair and sustainable revenues. NH families with incomes in the $125,000 range or less would pay no income tax and would see their property taxes plummet.

How can we be sure that an income tax for education would reduce property taxes? The state has already proven this principle by adopting a state law that caps local school budgets. If the state can cap local budgets, it can also demand that state funding be used to supplant local monies, not supplement them.

But Mitt Romney won’t pay an income tax.

Mitt Romney will never pay an income tax in NH. An income tax will only be paid by people who make NH their primary residence or those who live and work in NH or travel from neighboring states to work in NH. Mitt Romney won’t pay a NH income tax because NH is not his primary residence and he doesn’t work here. This is true even though he owns a $10 million estate in Wolfeboro. Not to pick on Senator Romney, but he should pay something. This is why I would combine an income tax with a low-dollar true state property tax with a large exemption that is only available to residents of NH.

Surprising support for a sales tax.

A number of my readers support a sales tax. A tax on purchased goods is regressive as it falls most heavily on folks who must use all of their income to buy the stuff they need to survive day-to-day. A state can make a sales tax less regressive by exempting essentials like groceries and heating fuel. A state can establish a minimum threshold before a sales tax applies. 

NH maintains its competitive advantage.

First, NH has lost its competitive advantage when it comes to how we treat working class and middle class folks. NH has the highest tuitions in the nation for its public colleges. Its students graduate with the highest debt. It is also bordered by states with tuition-free community colleges. Here’s the trick that too many young people follow if they grow up in NH and want to afford college: they move out of state. 

NH is also the only New England state that sets its minimum wage at an unlivable $7.25. Finally, while NH’s tax burden for wealthy taxpayers is low, its crushing property taxes are unsustainable.

If NH adopted a 3 percent income tax with a $3 true statewide property tax, its local property tax burden would decrease dramatically and its income tax would still be half or less of neighboring states.

If NH adopted a 2 percent income tax with a $2 true statewide property tax and a 2 percent sales tax on non-essential items, the same would be true. Our neighboring states have sales taxes that are 5-7 percent.

Lessons from the book tour.

I spoke at the Friday lunch seminar at Case Western Reserve University in Cleveland. (Thanks, Irene and Girma.) The audience was mostly political science and law faculty and interested folks from the community. I was paired with John Patterson. John is a former teacher and elected state representative in Ohio. He crafted Ohio’s current school funding plan with Bob Cupp. Patterson is a Democrat. Cupp is a Republican. Cupp went on to become the speaker of the Ohio House after drafting the plan adopted by the state. Good things can happen to people brave enough to take a stand.

Buy the book, The Last Bake Sale, here.