By GARRY RAYNO, InDepthNH.org
CONCORD — A bill intended to serve as a vehicle for responding to a yet-to-be-issued state Supreme Court decision on education funding, was called a solution Thursday as well as an attack on local control and taxpayers in property wealthy communities.
Appearing before the House Education Funding Committee, Rep. Joe Sweeney, R-Salem, said House bill 675 would be transparent and allow for responsibly funding education.
“This is a vehicle for the legislature — if we choose to do — to respond to any ongoing litigation that might be out there,” Sweeney told the committee.
However, Lillian Maughan, Lebanon School Board Chair, had another view of the proposed legislation.
“A tax cap at the state level takes away local control of education from local school boards and taxpayers,” she said. “It is hard to see this as anything but an example of legislative overreach.”
While Eric Pauer of Brookline said of all the bills introduced this year on education funding, “this is a big solution to a lot of the challenges the state put forth.”
He noted the state has a housing crisis, largely driven by high property taxes, which are essentially driven by school spending.
And Pauer said, the bill will provide property tax relief through the spending cap.
HB 675 would impose a spending cap that would either limit spending based on a three-year average of the state grants based on average daily attendance, less facilities acquisition and construction or based on the last three years’ budgets with a consumer price index adjustment.
Under the bill, about $5 per $1,000 of equalized evaluation would be added to the Statewide Education Property Tax to bring the state’s per-pupil education contribution to the $7,356 mark set by superior court judge David Ruoff in his ConVal decision as the cost of an adequate education and the state’s share.
That would require about a $500 million increase in the state’s contribution, but using a statewide property tax to do it, only moves the money taxpayers were paying as local property taxes into another pocket and calling it state money.
Using a statewide property tax would raise the money under the constitution’s requirement for proportional and reasonable taxation because the rate would be the same for everyone, which is not the case with local property taxes raised for public education.
The proposed legislation would require that all state money raised under the Statewide Property Tax that exceeds what the town or city needs to pay for an adequate education for their students be sent to the state Department of Revenue Administration.
If the “donor communities” fail to turn over their excess SWEPT money, the state could withhold the state rooms and meals tax money that would be sent to that community.
Under the bill, property taxes would continue to cover 71 percent of the total cost of public education in New Hampshire but more of the cost would shift to property wealthy communities while property poor communities would see their tax burden reduced.
Mark Decoteau, Waterville Valley town manager and chairman of the Coalition Communities 2.0, 26 cities and towns that retain their excess SWEPT receipts, told the committee “yet again this would establish an unfair funding scheme the legislature repealed in 2011 and has been considered and dismissed as recently as the last legislative session.
“It has the same flaws as past actions requiring one town to tax citizens and give (that money) to another town with no accountability about how it is spent.”
Decoteau said every dollar of SWEPT raised in Waterville Valley is spent on local education which is the norm in all the organization’s communities.
“There is no such thing as excess SWEPT dollars,” he said. “All that money is used for educational purposes.”
He said if this bill passes, his town would raise $1.6 million and have to send $1.3 million or 81 percent to the state. Then his town would have to raise an additional $1.3 million in local school property taxes to fund its schools.
If the bill passes, Decoteau said the number of donor towns, which is currently 27, would rise to 47, and public education will be negatively impacted in those communities.
“There is the fallacy of free money from what some consider rich towns,” Decoteau said. “This creates winners and losers across the Granite State and has the potential to negatively impact schools across the state.”
Maughan said the spending cap in the bill would negatively impact communities like hers with cuts in core programs, fewer teachers, courses, and activities and that will hurt children by denying them the education they deserve.
She also said using the average daily attendance, which for her community is 1,300, although there are 1,600 registered students, hurts a community like hers that is growing.
“You never get to where you need to be,” she said. “With things like insurance and energy costs, you lose spending power.”
Last year the legislature approved a bill allowing citizen petitions to place spending caps on school district warrants, and Pauer noted a number of school districts have warrant articles this year.
Rep. Hope Damon, D-Croydon, asked Pauer if he was familiar with what happened to the spending proposal in the Kearsarge Regional School District. Pauer said he was.
Damon noted the spending cap, which would have cut the district’s proposed budget by about 17 percent, was defeated by 92 percent of the voters at the deliberative session, as a record setting nearly 1,600 residents turned out.
Pauer said the outcome may have been different if there had been all-day voting like there will be for the final vote on school warrant articles.
The committee did not make an immediate recommendation on the bill.
Garry Rayno may be reached at garry.rayno@yahoo.com.
