By Garry Rayno, InDepthNH.org
While under cover of the novel coronavirus pandemic that grabbed everyone’s attention the last five or six months, the Education Funding Commission has been laying the groundwork for serious discussions on revamping the state’s broken education funding system.
The commission was established in the 2020-2021 budget package negotiated by Democratic legislative leaders and Gov. Chris Sununu after he vetoed the original package last year.
Last week the commission reviewed a report from a series of focus groups of school and municipal officials facilitated by the Carsey School of Public Policy at the University of New Hampshire, which works with the commission.
Almost without exception, the local officials said the current system based on local property taxes to fund most public education costs no longer works.
Many said increasing property taxes is not the answer as more and more people — many on fixed incomes — are either forced to sell their homes or leave town.
They spoke of the state needing to step up and pay a far greater share of education costs.
Where You Live
They also heard a preliminary report from the American Institutes of Research on the equity and adequacy of the state’s schools.
The group’s conclusions were not surprising to people who have studied the current system: where you live determines how well you do in school.
The talk around changing the education funding system is often about opportunities and how some students from property wealthy districts have greater opportunities, i.e. mountain bikes, iPads, facilities, etc..
But the institute’s work indicated student outcomes are also higher at more well-to-do schools than in the property-poor districts.
Outcomes is another word for performance, which means if you go to Berlin, Newport, Stratford or Pittsfield your chances are not as good — in general — to enter Harvard University, as would be if you attend Portsmouth, Hanover, Waterville Valley, Lin-Wood, Bartlett or Sunapee schools.
The group noted that student outcomes in New Hampshire are some of the highest in the country, second only to Massachusetts.
And without a need to improve outcomes, the amount of money currently spent on education K through 12 — about $3 billion — does not need to be increased, the study assumed, it just has to be distributed differently to ensure all school students reach the average outcome level.
In order to provide greater funding for lower performing schools would mean districts spending much more per pupil would have to spend a lot less.
That is sort of what the Vermont education system looks like and continues to stir controversy.
In order to even out the inequity without spending any more total money — state, local and federal — would entail a massive redistribution of money around the state.
There are two simple ways to do that. One is a statewide education property tax, which the state has but at a very low rate to eliminate most donor towns. But to make the system equitable, the rate would need to be substantially higher, which creates “donor towns” and we know how that went over a couple decades ago.
Maybe the resentment could be eased a bit if the state actually collected the money instead of leaving it at the local level.
The report from the focus group includes unattributed quotes from local officials including one who said “I don’t understand the SWEPT (statewide education property tax) tax and it’s ridiculous – towns get to keep surplus. Small towns can’t pay for all their schools and municipalities need – you see well-off towns are no longer able to manage the formula anymore – it’s not just the Claremont’s and Berlin anymore – there are major problems coming to roost for more towns, families, property owners.”
The other way to redistribute money would be to make the entire state one big school district.
That was a suggestion offered over the years by former state Senate President and long-time House member Alf Jacobson. He introduced several bills that would have accomplished that, but they were not popular and killed quickly.
However, such an approach would level teachers’ salaries, a big concern to smaller and poorer districts as they watch their good teachers move to larger better performing schools.
But the local officials did agree the property tax should be off the table.
“We need another source of funding beyond property taxes, not sustainable,” said one official.
Another was more direct about where they believe the responsibility lies.
“We cannot rely on local property taxes, legislature has to step up, deal with their responsibility.”
Where to Turn
While many noted the problems associated with finding new sources of public education money to take the burden off property taxes, they acknowledge the difficulty in the past of moving a major tax system change through the legislature.
People tend to forget the House and Senate passed an income tax as lawmakers grappled with the state Supreme Court’s two original Claremont decisions.
The House and Senate passed two different versions of an income tax giving former Gov. Jeanne Shaheen the opportunity to start banging the drum telling lawmakers whichever version they sent to her desk she would veto.
The House and Senate could not agree on an income tax or on expanded gambling, only on a statewide property tax and increases in existing levies.
Two years later, running for her third term, Shaheen refused to take the pledge and instead floated a sales tax and a value added tax, but to no avail.
The pledge against broad based taxes has been the third rail of New Hampshire politics since it was made famous by then gubernatorial candidate Meldrim Thomson and Union Leader publisher William Loeb.
Loeb along with Union Leader editorial writer James Finnegan used the pledge to hammer any candidate who dared to even whisper a sales or income tax under his breath for days and weeks and then at least twice on weekends.
That was when the Union Leader had significant sway in the state and particularly in Concord where legislators feared the brow beating editorials aimed with precision at his or her constituency.
Both Loeb and Finnegan are long gone and the Union Leader no longer harps relentlessly against a broad-based tax. The paper’s hierarchy still opposes broad-based taxes, no doubt, but the crusade has slowed down with the paper’s dwindling influence.
There is no longer one media outlet that drives state issues like the Union Leader once did, WMUR had its day, but all the traditional media has lost that battle to the internet and its pinpoint targeting.
The issue of broad based taxes is still alive, Sununu’s vetoes of paid family and medical leave showed the governor’s ire when he wrote “No income tax, not now, not ever” on the bill.
And the Republican Party continues to try and paint Democrats as income tax advocates trying to steal people’s money.
And the pledge currently divides the two Democratic gubernatorial candidates seeking to take on Sununu in the general election.
Andru Volinsky, the lead attorney in the two Claremont lawsuits, refused to take the pledge, while Senate Majority Leader, Dan Feltes has taken the pledge.
What was telling, in all the recorded remarks about education funding, was the lack of a consensus on a new revenue source, but no adamant opposition to a sales or an income tax.
Needless to say, either one is probably not anyone’s first choice, and no one wants to pay more taxes, just fairer taxes, which ultimately means some will pay more and some will pay less depending on how you define fair.
The Carsey School folks are working on several questions to be included in this fall’s Granite State Poll.
One of the questions concerns education funding asking what the person’s preferred primary option would be for funding: local property taxes, a state-wide property tax, an income tax, a sales tax, or some combination of these?
The question has not been asked in the Granite State Poll since 2002.
The results will be interesting but not as telling if a few other choices were included like a value added tax, or tourist tax on second homes, etc.
The income tax and the pledge may continue to be the straw men who define New Hampshire’s attitude about taxes in Concord, but is that true outside of the capital area and away from lawmakers and politicians?
Is the pledge and broad-based taxes still the third rail of New Hampshire politics or has the voltage been reduced considerably?
I believe it has, but we will learn more in a couple of months.