With an increase in state aid to school districts to pay for an adequate education, Republicans want to cap how much local spending can increase to keep taxes down.

Specifically, they want to raise base adequacy aid – the flat rate the state pays per student, per year – from $4,100 to $7,356, which is similar to some proposals from their Democratic counterparts. Where House Bill 675 differs is local taxation.

Jim Kofalt, a Republican from Wilton who sits on the Education Funding Committee, said the legislation seeks to limit local school spending unless voters authorize an increase.

“We’ve got this sort of tendency for school districts very often to – if we give them more money from the state level, they don’t necessarily reduce property taxes,” Kofalt said. “The hard decisions become a little bit less hard. They have more money and they can spend it without necessarily having to raise property taxes, but what people really want is lower property taxes.”

Others argue that the state needs to pay its fair share for education without strings attached, instead of downshifting costs to local communities. As the legislature decides what to do, the state is in the midst of revenue shortfalls and a tight upcoming budget. Needless to say, lawmakers have a tall task ahead of them.

The Republican proposal by Jason Osborne, the House majority leader from Auburn, and his deputy, Joe Sweeney from Salem, would tether local school budgets to inflation in an attempt to keep education spending under control. If local school districts want to increase their taxes on top of that, they’d need two-thirds approval from voters.

Kofalt said he thinks the bill could use some “massaging” but that it could be a path forward.

David Luneau, a Democrat from Hopkinton, disagreed. He, like many in his party, argued the state’s funding model is unfair to property-poor communities. Because home values are higher in a place like New Castle, that town gets more through its statewide education property taxes than a place like Newport, which he said doesn’t generate as much revenue from property values.

“I’m not looking at House Bill 675 as a model that we want to adopt,” Luneau said. “It locks in the disparities in opportunity between wealthy districts like New Castle and property-poor districts like Newport.”

Luneau has filed a barrage of bills to solve the problem from the other side. The main three, he said, build on top of each other. The first, House Bill 550, raises the base cost of an adequate education to that same $7,356, the amount determined by a judge in the Contoocook Valley School District lawsuit that the state is now appealing. The Legislature would then recalculate that price every two years. Based on current estimates, the state budget office calculates that this would cost just shy of $500 million each year, including adequacy aid, charter school grants and Education Freedom Accounts.

Then, House Bill 651 would raise both the base cost and differential aid, which varies for every school district depending on students who receive special education, receive free or reduced-price lunches or are English language learners. This would cost an estimated $630 million each year.

At the top tier is House Bill 772, which Luneau called the “foundation opportunity plan.” It would start with a “modest” local tax contribution, he said, supplemented by state funding to achieve positive student outcomes. Luneau said this idea, which seeks to make state funding more equitable for various communities, was the result of a lengthy review and public comment process by the state’s school funding commission.

“It recognizes that there are differences in every city and town across the state in terms of what their needs are,” Luneau said. That bill’s public hearing is scheduled for Tuesday.

Republicans have expressed skepticism about how the state would pay for Luneau’s and other Democrats’ proposals to increase education funding. Some legislation would shuffle tax revenue to put more toward education, but lawmakers from both parties have said they’re unsure of how they’d fill the resulting gaps in the budget.

While some advocate to end the downshifting of costs to localities, Kofalt said the state needs to control education costs rather than just shifting local costs back up to the state.

“If we just sort of switch the funding mechanism from local level to state level and don’t do anything else, I don’t think we can solve that problem,” Kofalt said. “I think taxes continue to stay high and go up and up and up because spending isn’t under control.”

 

Charlotte Matherly is the statehouse reporter for the Concord Monitor and Monadnock Ledger-Transcript in partnership with Report for America. Follow her on X at @charmatherly, subscribe to her Capital Beat newsletter  and send her an email at  cmatherly@cmonitor.com.