By GARRY RAYNO, InDepthNH.org

CONCORD — Lawmakers approved a statewide school spending cap provision that will allow voters at the next two state general elections to decide if they want to cap school district budgets.

But after a number of proposals and some last-minute changes, one of the Republicans’ top priorities, an expanded open enrollment program, died quietly on the table in the Senate yesterday, the last day to act on bills.

The controversial proposal was doomed last week when Gov. Kelly Ayotte came out in opposition to the bill.

But the school budget cap, another Republican priority, did make it to the finish line, although it will still need to pass muster from the governor.

Under HB1300, the school district budgets would be limited to the rate of inflation and taxable property added to the tax rolls.

The bill would also cap administration costs to a yearly 6% increase.

The tax cap provision would require a three-fifth majority for passage, although there could be complications with regional or cooperative school districts that were not clarified in the bill.

Opponents of the plan said it will not reduce property tax bills but will put school districts in a bind if special education and health care costs go up significantly as they have in recent years, and to address teacher salary increases.

They also said some of the state’s most property-poor communities have been hit with a decrease in state aid as targeted aid is reduced and hold-harmless provisions are phased out.

Rep. David Luneau, D-Hopkinton, said the cap will not reduce property taxes, but it will lock in low property tax rates for owners of vacation or second homes while towns like Franklin, Claremont and Manchester are struggling.

“Let’s fix it, not break it,” Luneau said.

He said the bill is the latest in an effort by some to destabilize public schools and end the state’s constitutional obligation to fund an adequate education.

“Our constituents want good public schools and good student outcomes,” Luneau said, “and this fails on all counts. It is bad for kids, it is bad for taxpayers, and it is bad for communities.”

But Rep. Ross Berry, R-Weare, said “something must be done, someone must act as voters are being taxed out of their homes.”

The bill will allow more voters to make the decision, he said, and will require a 60% majority to impose the cap.

The House’s position is that more people need to vote, Berry said, and the agreement with the Senate will accomplish that in the next two general elections, including the presidential election in 2028, when turnout is highest.

“It’s a state solution,” Berry said. “This puts taxpayers back in the driver’s seat.”

He and others have contended the problem is that local governments are spending too freely and need to have limits in order to slow the growth in property taxes, although others contend the state ranks 50th in the country in state support for public education and 48th for support for municipalities, which is why, along with downshifting, property taxes are so high.

The House passed the report on a 183-170 vote. It now goes to the governor.

In the Senate, which approved the conference committee report on a partisan 15-8 vote, Democrats said the bill defies the needs of public schools.

Senate Minority Leader Rebecca Perkins Kwoka, D-Portsmouth, said, “This is a move that defies the needs of our students. I think the nature and wording of the question will just invite litigation, costing our property taxpayers even more while delivering them even less.”

With schools already facing cuts and financial pressures, the issue of high property taxes lies more with what politicians have done in Concord than by local officials, opponents claimed.

Sen. Donovan Fenton, D-Keene, said, “You can artificially limit school expenditures all you want, but health insurance plans, facilities costs, utility costs and fuel costs don’t care about your cap. Franklin, Rochester, Merrimack, Jaffrey-Ringe, Mascenic, Newfound area and more are cutting dozens of teachers each, alongside academic and athletic programs alike.”

He said bills like HB1300 are why students are packed into larger classrooms, with fewer teachers, fewer affordable meals, and fewer activities, and we wonder why student performance and behavior have suffered.

“These decisions hurt our students, our future, and the workforce of tomorrow,” Fenton said.

But Sen. Timothy Lang, R-Sanbornton, said the number one thing people talk about is property taxes and reducing them.

“All we are doing is putting a question to the voters,” he said.

Lang said it is not a referendum, but an opportunity for voters to have their opinions heard for the next two general elections.

After the votes, Megan Tuttle, President of NEA-New Hampshire, said the state’s residents support strong public education and have chosen not to adopt school pending caps in the past.

“The legislature’s vote to require every community to hold a mandatory tax cap vote in November’s General Election moves our state in the wrong direction and undermines New Hampshire’s long and proud tradition of local control and annual meetings,” Tuttle said. “Instead of supporting students and working to address New Hampshire’s broken and unequal school funding system, this legislation would further constrain local schools and make it harder for districts to meet the needs of their students.”

Every Granite State student deserves access to the resources and opportunities they need to succeed, regardless of their zip code, she said.

“HB1300 would lock in existing funding disparities that will widen the gap between communities and undermine the quality of education for students across New Hampshire,” Tuttle said.

Open Enrollment

House and Senate negotiators on public schools open enrollment had an agreement to cap the number of students at 500 and have the state pay the tuition costs of students who transfer to a district other than their home district, which had been one of the plan’s major obstacles, along with who would be responsible for costs of services for special education students and students with disabilities.

But an hour before the agreement needed to be signed last week, Ayotte released a statement opposing the plan, and Republicans quickly proposed another plan that would retain the current open enrollment system, but with a floor that 10% of districts’ students would be eligible for the program, as a way to negate the nearly 100 school districts that adopted policies at annual meetings this spring not to allow their students to participate in the program.

That plan would retain the current provision that the sending district would have to pay 80% of its average per-pupil cost to the receiving districts while parents would be responsible for the remainder of the tuition costs, a provision opponents said is extremely unpopular.

Thursday, the bill was tabled by the Senate, which had to act first on the plan, and remained there when the House adjourned for the day, killing it.

Troubled Schools

The House and Senate approved a plan to help financially troubled schools or school districts develop financial recovery plans.

House Bill 1816 was inspired by the Claremont School District’s financial crisis last fall when it learned just prior to school opening that it faced a $5 million deficit due to its administration’s sloppy record keeping, inattention to details and poor management.

The agreement allows the State Department of Education and the State Board of Education to intervene if a school or a school district encounters a financial emergency, which the bill defines as needing intervention and oversight “for the school district or school to meet its financial, operational, and instructional responsibilities for all school-age children.”

In an emergency, the DOE commissioner would have the authority to assist the school district or school in developing a recovery plan, to oversee the plan and to leverage resources to address financial needs. 

The recovery plan may consider changing administrative practices and operating conditions; reallocating school district or school resources; renegotiating contracts and agreements; and department oversight of school district or school governance, organizational structure, and/or administrative services for up to one year.

Under the bill, the DOE would be able to draw $200,000 from the Education Trust Fund to implement the recovery plan. Any unused money would be returned to the Education Trust Fund, which is the primary source of money for state aid to public education including adequacy grants to public schools, state aid for charter schools and Education Trust Fund grants.

Claremont was not the only school district to face large deficits this school year, mainly brought on by mid-year hikes in health insurance premiums when insurers needed to increase their reserves due to greater-than-expected claims the year before.

Cooperative Schools

House Bill 1374 would allow one town to withdraw from a cooperative school agreement on its own without the permission of the other towns in the district.

The change, which some said would be disastrous, passed both the House and Senate.

(InDepthNH Senior Reporter Paula Tracy contributed to this report.)

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