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Veto of Bill To Double N.H. School Aid Expected

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The New Hampshire legislature has cleared a bill that would more than double the state's contribution to school spending. But an expected veto by Gov. Steve Merrill is underscoring a highly politicized debate over the state's duty to finance public education.

The legislation, which passed late last month, calls for fully funding for the first time the state's nine-year-old school-aid formula.

Backers of the measure say the increased aid would enable municipalities to cut property taxes and would reduce spending disparities between rich and poor school districts. But opponents wonder where the state would get the money.

The Governor has confirmed that he will veto the legislation when it hits his desk.

"We need to figure out where the money is going to come from first,'' said Jim Rivers, Mr. Merrill's press secretary.

Fully funding the formula would require the state to boost K-12 spending by $60 million beginning in fiscal 1996. The state currently supplies about $47 million in foundation aid.

New Hampshire ranks last among the states in the percentage of funds it provides to schools, relying almost exclusively on local property taxes to pay for education.

Supporters of the legislation have suggested that funding could come either from a state windfall from the Medicaid program or from cuts in other state spending. But Mr. Merrill has been planning to use the extra Medicaid money for health-care reforms, and argues that across-the-board cuts in other programs would force communities to raise property taxes.

In the only state to have neither a sales nor an income tax, new taxes are generally not seen as a politically viable way of finding the needed funds.

Fulfilling a Promise

Supporters say the bill would fulfill a legislative promise to relieve property-tax payers. Although the school-aid formula has been in place since 1985, the state has never fully funded it.

Under the new legislation, districts whose property wealth matches the statewide average would receive 8 percent of basic per-pupil funding from the state. Poor districts would get a higher percentage of foundation aid, while wealthier ones would get less.

The bill, which passed the House on a 184-to-170 vote and the Senate on a 14-to-10 vote, represents the legislature's response to a school-finance lawsuit brought by five property-poor districts. (See Education Week, March 30, 1994.)

The state supreme court late last year backed the suit, ruling that the state has an obligation to fund public education. The court sent back to a lower court, however, the plaintiffs' charge that the heavy reliance on property taxes is unconstitutional because it results in burdensome tax rates.

Arpiar G. Saunders, the lawyer for the poor districts, said they will continue to press their case in court.

Mr. Merrill's veto also could become an issue in November.

"Any governor worth a whit could present a budget to the legislature to fully fund our school-aid formula,'' said Sen. Wayne D. King, a Democrat who is expected to challenge the Republican incumbent for re-election.

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