States

N.H. Lawmakers OK Finance Plan, But Debate Lives On

By Debra Viadero — July 11, 2001 3 min read
  • Save to favorites
  • Print

New Hampshire legislators have approved a school finance plan that, on paper at least, presents a permanent solution to the state’s long-running problems in paying for its schools.

But lawmakers on both sides of the aisle said last week that they expect to revisit the issue yet again next year.

With Wall Street threatening to lower the state’s bond rating, a projected $240 million hole in the state school aid budget, and a funding formula due to sunset in 2003, the Granite State legislature was under pressure this session to find a better way of financing schools.

The plan leaders agreed on late last month was part of the state’s overall $6.1 billion, two-year budget package. It would set aside $2.3 billion in state aid to schools over two years, raise business and telephone taxes, and reduce—and make permanent—the statewide property tax New Hampshire was already using for schools.

Gov. Jeanne Shaheen called the plan disappointing, but she promised not to veto it. The governor does not have to sign the bill for it to become law.

“For me to veto this legislation and the state budget along with it—when it is clear that there is little prospect for a better package being enacted this year—would be irresponsible,” the Democratic governor said in a June 30 radio address. “That’s why I’ll allow this legislation to become law.”

Breaking With Tradition

New Hampshire is among a handful of states with no state income or sales taxes.

Breaking with that long-held anti-tax tradition, Ms. Shaheen in February proposed adopting a 2.5 percent sales tax to help pay for schools. But the idea died quickly in the Republican-controlled legislature—along with other plans aimed at funding schools with other new taxes.

Lawmakers preferred the business- and property-tax plan because it expanded on existing taxes and reduced the state’s unpopular property tax from $6.60 per $1,000 of assessed property value to $5.85.

“We recognize there will be a shortfall in the next biennium,” said Sen. Jane E. O’Hearn, a Republican and the chairwoman of the Senate’s education committee. “And we recognize it’s a temporary solution, and we’ll have to work at sustaining another source of revenue.”

‘Market Basket’ Proposal

One idea that intrigued some lawmakers this session was a proposal by Sen. Edward M. Gordon, a Republican, to revamp the way the state determines how much money should go to schools. His “market basket” proposal calls for identifying the “essential elements” of an adequate education and estimating the average costs of providing them. The measure died in a conference committee and was sent to the state’s highest court for an advisory ruling.

“We like the market-basket approach, but we have to make sure it provides a balanced meal,” said Mark V. Joyce, the executive director of the New Hampshire School Administrators Association.

For instance, he noted, the plan, which would have provided $103 million less to schools in fiscal 2002 than the budget that was ultimately approved, left out the costs of such basic expenses as transportation and electricity.

“When it comes back in the legislature, we’ll focus on trying to bring a dose of reality into the discussion,” Mr. Joyce said.

The state’s ongoing funding debate stems from a 1991 lawsuit filed by five property-poor towns, which argued that they could not provide students with an adequate education because the state finance system relied too much on local property- tax revenues. The New Hampshire Supreme Court agreed, twice striking down state school funding plans. (“School Finance Ruling Raises New Tax Questions in N.H.,” Jan. 4, 1998.)

Now that the statewide property tax is permanent, the plaintiffs—known as the Claremont coalition—may return to court, according to their lawyer, Andru H. Volinsky.

“We’ll be counseling our clients now on when and how to challenge it, rather than whether to challenge it,” he said.

Related Tags:

A version of this article appeared in the July 11, 2001 edition of Education Week as N.H. Lawmakers OK Finance Plan, But Debate Lives On

Events

Professional Development K-12 Essentials Forum Getting Professional Development to Stick
Join this free virtual event to explore best practices, funding, format, and timing for teacher and principal PD.
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
College & Workforce Readiness Webinar
The Road to Opportunity: Making CTE Accessible for All
The most valuable CTE happens off campus. For too many students, transportation is the barrier that keeps opportunity out of reach.
Content provided by HopSkipDrive
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Recruitment & Retention Webinar
New Hire, No Laptop, No Login: Preventing Day-One Disruption
What happens before day one matters. Discover how districts are improving the new hire experience.
Content provided by Frontline Education

EdWeek Top School Jobs

Teacher Jobs
Search over ten thousand teaching jobs nationwide — elementary, middle, high school and more.
View Jobs
Principal Jobs
Find hundreds of jobs for principals, assistant principals, and other school leadership roles.
View Jobs
Administrator Jobs
Over a thousand district-level jobs: superintendents, directors, more.
View Jobs
Support Staff Jobs
Search thousands of jobs, from paraprofessionals to counselors and more.
View Jobs

Read Next

States Texas Considers a Bigger Role for Christianity in Schools This Month. Here's How
The state board will vote on a required reading list that includes biblical passages.
Silas Allen, The Dallas Morning News
7 min read
The State Board of Education meeting room is pictured on Sept. 26, 2022 inside the William B Travis Building (which houses the Texas Education Agency) in downtown Austin, Texas .
The Texas State Board of Education meeting room is pictured on Sept. 26, 2022, inside the William B. Travis Building in downtown Austin, Texas. The board will vote later this month on revised standards and a required reading list that include biblical passages.
Tom Fox/The Dallas Morning News via TNS
States New York Teachers Win Lower Retirement Age as Lawmakers Pass Pension Reforms
New York teachers can retire five years earlier under pension changes included in a state budget package.
Cayla Bamberger, New York Daily News
3 min read
Internal View of the State Capitol. on May 29, 2025, in Albany, New York.
An internal view of the state capitol in Albany, N.Y., on May 29, 2025. Gov. Kathy Hochul has signed a budget into law that lowers the retirement age for teachers to collect a full pension.
Kena Betancur/AP
States How One State's Efforts to Limit Undocumented Students’ Rights Failed Again
Tennessee lawmakers failed to create legislation directly challenging federal law.
3 min read
The Tennessee Capitol is seen on April 23, 2024, in Nashville.
The Tennessee Capitol is seen on April 23, 2024, in Nashville. Twice since 2025, lawmakers in the state have failed to pass legislation limiting undocumented students' access to free, public education.
George Walker IV/AP
States Opinion How Education Leaders Can Overcome Political Divisions
"Bipartisan education policy is not only possible; it is already happening," say several leaders.
Jose Muñoz, Charlene Russell-Tucker, Eric Mackey & Keven Ellis
4 min read
Illustration of blue and red arrows merging for create purple arrow.
Education Week + Getty