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Published in Print: May 5, 1999, as At Long Last, N.H. Passes School Finance Plan

At Long Last, N.H. Passes School Finance Plan

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Educators and legislators in New Hampshire were celebrating last week following the long-awaited adoption of a plan to solve the state's school funding crisis.

After a week of tedious deliberations between Senate and House conferees, the full legislature passed a bill last Thursday that relies on a new statewide property tax and a plethora of other revenue sources to pay for education.

Wasting no time, Gov. Jeanne Shaheen signed the bill into law within 90 minutes of its passage and threw a party for the people who had brought it about.

The new finance law promises that the state will spend $825 million for education in fiscal 2000, which legislators say will cover about 62 percent of the current cost of running the state's schools, up from the current state funding level of just 8 percent of school costs.

More than half the state spending on schools next year will be covered with the new property tax. Other sources of revenue include increases in taxes on cigarettes, real estate transfers, and business. Passage of the measure puts to rest anxiety about a number of potential crises for school districts, including the possibility that schools could not pay teachers after July 1, when money collected for the current school year would run out. ("N.H. Lawmakers Come Close to Accord on Aid ," April 28, 1999.)

"I can tell my teachers that it's over," said James F. Gaylord, the superintendent of the 1,450-student White Mountains regional school district. His teachers, he said, have had to deal with the anxiety of not knowing if they would have jobs next year.

Mr. Gaylord also said he expected his district would receive more money for education under the new plan than it has gotten in the past.

Funding Gap

Despite the relief it brings, the law leaves a nagging problem that will have to be straightened out soon. While legislators voted to spend $825 million on education, they agreed on revenue sources sufficient to pay for only $783 million, leaving room for debate on where to find money to cover the $42 million gap.

"This plan would not fit a definition of a balanced budget," said Sen. Caroline McCarley, a Democrat who is the chairwoman of the Senate education committee. "We have a difficult job ahead as far as the budget process goes."

"We recognize our work is not over," agreed Sen. Beverly A. Hollingworth, a Democrat and the chairwoman of the finance committee. "We have several pieces that need to have funding, and we need to make sure it is put in place by July 1."

In December 1997, New Hampshire's highest court declared the state's reliance on local property taxes for education unconstitutional. It said the system provided unequal funding and educational opportunities for different communities. The court ordered the legislature to fix the problem by April 1 of this year, a deadline that came and went.

Gov. Shaheen, a Democrat, complicated the process of reaching agreement on a finance plan when she vowed that she would veto any law that created a state income tax.

Legislators readily admitted that, by last week, they had used up all of the time allowable to come to agreement without heading the state for disaster. "Talk about getting down to the wire," said Rep. Gene G. Chandler, a Republican and the House majority leader. "There was no wire left."

But Tom P. Connair, the chairman of a coalition of plaintiff school districts involved in the Claremont School District v. Governor lawsuit--the case that prompted the supreme court's ruling on the current funding system--said he was "disappointed" with the final plan.

"The law is certainly going to assist poor towns and their taxpayers and provide some tax relief, but it falls short of the tax reformation that is needed to enable all students to have a high-quality education," he argued.

Elizabeth M. Twomey, the state commissioner of education, spoke more positively about the final plan. "While people say it could have been better, it could have always been a lot worse. ... The majority of the funding sources are stable," she said.

Meanwhile, Dennis J. Pope, the superintendent of the 3,200-student Bedford district, said he was simply relieved that he could finally offer contracts to teacher-candidates he has been interviewing. Charged with hiring 28 teachers for next school year, he had worried about not being able to actually offer someone a job. "Now we can go back to the normal process of finding people," Mr. Pope said.

Vol. 18, Issue 34, Page 18

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