“…to raise new ideas and improve policy debates through quality information and analysis on issues shaping New Hampshire’s future.”

Education Funding and Policy in NH

Leadership Seacoast March 5, 2014

New Hampshire Center for Public Policy Studies

Board of DirectorsWilliam H. Dunlap, Chair

David Alukonis

Eric Herr

Dianne Mercier

James Putnam

Todd I. Selig

Michael Whitney

Daniel Wolf

Martin L. Gross, Chair Emeritus

Directors Emeritus Sheila T. Francoeur

Stuart V. Smith, Jr.

Donna Sytek

Brian F. Walsh

Kimon S. Zachos

So what?

• Why are we even having this discussion?

• Why have we been talking about “education funding” for the past 15 years?

3

State Aid as Percent of School RevenueSchool Year 1998-1999

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

New

Ham

pshi

reIll

inoi

sN

evad

aV

irgin

iaS

outh

Dak

ota

Neb

rask

aP

enns

ylva

nia

Con

nect

icut

Mis

sour

iM

aryl

and

Nor

th D

akot

aN

ew J

erse

yR

hode

Isla

ndM

assa

chus

etts

Ohi

oN

ew Y

ork

Texa

sC

olor

ado

Ariz

ona

Mon

tana

Mai

neTe

nnes

see

Geo

rgia

Flo

rida

Loui

sian

aIo

wa

Sou

th C

arol

ina

Wyo

min

gIn

dian

aW

isco

nsin

Mis

siss

ippi

Ore

gon

Min

neso

taA

rkan

sas

Cal

iforn

iaO

klah

oma

Ala

ska

Uta

hId

aho

Ala

bam

aK

ansa

sK

entu

cky

Wes

t Virg

inia

Del

awar

eW

ashi

ngto

nM

ichi

gan

Nor

th C

arol

ina

New

Mex

ico

Ver

mon

tH

awai

i

State

Pe

rce

nt

Sta

te A

id

Before reform, NH was last in state aid for schools.

Here’s why…

4

• The education decision “The responsibility for ensuring the provision of an adequate public education and an adequate level of resources for all students in New Hampshire lies with the State.”

• The tax decision “To the extent that the property tax is used in the future to fund the provision of an adequate education, the tax must be administered in a manner that is equal in valuation and uniform in rate throughout the State.”

Claremont II Decision:

1997

State aid jumps after rulingPercentage of New Hampshire School District Revenue

Provided by State Aid: 1919-2012

36.4%

23.6%

0%

10%

20%

30%

40%

50%

60%

19

19

-20

19

24

-25

19

29

-30

19

34

-35

19

39

-40

19

44

-45

19

49

-50

19

54

-55

19

59

-60

19

64

-65

19

69

-70

19

74

-75

19

79

-80

19

84

-85

19

89

-90

19

94

-95

19

99

-00

20

04

-05

20

09

-10

Including Statewide Property Tax

Excluding Statewide Property Tax

EQUITY

7

Elementary spending per student1998, 2002, 2013

0%

50%

100%

150%

200%

250%

300%

1 11 21 31 41 51 61 71 81 91 101 111 121 131 141 151

School districts

Per

pu

pil

sp

end

ing

as

% o

f st

ate

med

ian

201320021998

8

Equalized Tax Rates for Education 1998, 1999, 2005, 2009(compared to median town)

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

one dot for each town (sorted from low to high separately for each year)

Rat

io o

f ta

x ra

te t

o m

edia

n t

ow

n t

ax r

ate

1999

1998 Taxpayer equity:The change in taxpayer equity brought about by the reform of 1999 was almost entirely reversed by 2005. By 2009, taxpayer equity has shown how the changes brought by the 1999 reforms have eroded.

2005

2009

Property Taxes By Function 1997-2012

994974939909876824771712639594543514478468438417

1,6121,5691,5171,4781,481

1,3711,331

1,2121,147

932816

718660

537

1,1741,101

460458

499499

495

383362

362362

364 363363

362363

256252

248245242

217202

194180

178

160154

129116

116116

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

County

State Education

Local Education

Municipal

10

Change in Taxpayer EquityThe initial increase in taxpayer equity (although never fully realized) eroded away by 2009.

Change in Pupil EquityNo change in pupil equity ever occurred.

ADEQUACY

Finding a benchmark

• 2006 NH Supreme Court case determined that “adequate education” was never sufficiently defined by Legislature.

• New definition is for “opportunity” for an adequate education– “Inputs” = courses offered, staffing,

funding, etc.– “Outputs” = test scores, graduation rates,

attendance rates, etc.

• Teachers = $47,267– 1 teacher/25 students (K-2) = $1,891 per pupil– 1 teacher/30 students (3-12) = $1,576 per pupil

• Specialty teachers = $330 per pupil• Principals = $202 per pupil• Guidance counselors = $130 per pupil• Library media specialists = $95 per pupil• Custodians = $73 per pupil• Facilities maintenance = $195 per pupil• Technology = $75 per pupil• Instructional materials = $250 per pupil• Transportation = $315 per pupil

The Magic Number:$3,456 per pupil

Differentiated Aid for at-risk populations

• Economically disadvantaged $1,750 per low-income student

• English language learners $685 per student

• Special education students $1,882 per student

Poor performers $685 for each 3rd grader who tests

below grade level in reading

The current landscape

Statewide Property Tax

13%

State Foundation/Adequacy Aid

20%

Federal Aid7%

Other State Aid3%

Tuition, Food, and Other1%

Local Property Tax55%

Sale of Bonds & Notes

1%

School revenue: Largely a local affair

State Share of Public Elementary and Secondary Education Funding, 2010-11

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

SD

MO

NE IL NV

CT FL

PA RI

NH

VA NJ

MA

CO

NY

TX

AZ

ME

MD

GA

LA IA OH

SC

MO

US

TN

OR WI

MS

OK

ND

UT

AR

KY

AL

KS

WY MI

INW

VC

AW

AN

CM

ND

EA

K ID NM VT HI

U.S Average

New Hampshire

NH below national average in state funding . . .

New Hampshire

Per Pupil Public School Spending by State, 2010-11

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

$18,000

$20,000

UT ID OK

AZ

MS

TN

NC

NV

TX

CO

SD AL

FL

SC

NM

CA

GA

KY

AR IN

MO W KS

OR IA VA

US

MT

MN LA IL MI

NE

OH

ND

ME

WI

W HI

DE

NH

PA RI

MD

MA

CT

WY

VT

NJ

AK

DC

NY

U.S. Aver

New Hampshire

. . . but we spend more per student overall

New Hampshire

We’re in a high-spending region

• The problem is still the disparity across the state in education spending, outcomes, and property valuations (i.e., the basis for spending)

• Franklin $8,370 per pupil spending $460,000 per pupil valuation

60% low-income students 63% 3rd Graders proficient in math

• Newington $32,029 per pupil spending $12.4 million per pupil val. 10% low-income students 100% 3rd grd proficient in math

What’s the concern?

Regional variation is significant

Cost Per Pupil by NH Region, 2011-2012

$13,301

$15,045$14,848

$11,807$11,344

$13,499

$16,304

$14,366$15,197

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

$18,000

Dar

tmou

th-

Sun

apee

Gre

at N

orth

Woo

ds

Whi

teM

ount

ains

Gre

ater

Con

cord

Gre

ater

Man

ches

ter

Gre

ater

Nas

hua

Mon

adno

ck

Lake

s R

egio

n

Sea

coas

t

Spending & student success

Per pupil expenditures by NH district vs. percent of students scoring Proficient or higher

on NECAP Reading (2012)

y = 0.0004x + 75.061

R2 = 0.031

55

60

65

70

75

80

85

90

95

100

105

$0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000

Impact on policy:Four big questions

• What do we want from our education system?

• How should we measure success?

• Who are interested parties in this discussion? What are their priorities?

• What outside trends are shaping education in NH?

• What do you want your 18-year-old to be able to do when he or she graduates high school?

1. What is the desired outcome?

2. What do we measure?– Spending per pupil– English-language learners– Racial/ethnic breakdowns by district– Poverty rates by district– Teacher/student ratios– Teacher salaries– Teacher educational attainment

– Graduation rates– Drop-out rates– College placement rates– Attendance rates– Test score, test scores, test scores

• Students

• Parents

• Business community

• Higher education community

• Society at large

3. Interested parties

4. What about demographics?

• What does education policy mean for a state that is:– Growing older,– Raising fewer school-aged children,– Seeing a significant shift in its pattern and

rates of in-migration?

Student trends moving in one direction

New Hampshire Total Public School Enrollment, 2001-02 to 2012-13

175,000

180,000

185,000

190,000

195,000

200,000

205,000

210,000

01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13

Nu

mb

er

of

Stu

de

nts

Public School Enrollment

Without Charter Students

N H School Age Population C hange by Tow n, 2000 to 2010

Source: US C ensus Bureau

Berlin

Laconia

Franklin

Lebanon

C larem ont

Keene

C oncord

N ashua

M anchester

D erry

R ochesterSom ersworth

D overD urham

Portsm outh

C hange from 2000 to 2010

-2,500 - 0

0 - 100

100 - 500

500 - 1 ,000What kind of educational system

should we be building, based on what this

map tells us?

•73 high schools•100 SAUs•160+ school districts

New Hampshire Center for New Hampshire Center for Public Policy StudiesPublic Policy Studies

Want to learn more?• Online: nhpolicy.org• Facebook: facebook.com/nhpolicy• Twitter: @nhpublicpolicy• Our blog: policyblognh.org• (603) 226-2500

Board of DirectorsSheila T. Francoeur, Chair

David Alukonis

William H. Dunlap

Eric Herr

Dianne Mercier

Richard Ober

James Putnam

Stephen J. Reno

Stuart V. Smith, Jr.

Donna Sytek

Brian F. Walsh

Michael Whitney

Martin L. Gross, Chair Emeritus

Todd I. Selig

Kimon S. Zachos

Directors Emeritus“…to raise new ideas and improve policy debates through quality information and analysis on issues shaping New Hampshire’s future.”