Education Finance History Orientation Presentation to House Education Committee January 9, 2007 Steve Norton Executive Director, NHCPPS “…to raise new ideas and improve policy debates through quality information and analysis on issues shaping New Hampshire’s future.”

All of our reports are available on the web: New Hampshire Center for Public Policy Studies “…to raise new ideas and improve policy debates through quality information and analysis on issues shaping New Hampshire’s future.” Board of Directors Martin L. Gross, Chair John B. Andrews John D. Crosier Gary Matteson Todd I. Selig Donna Sytek Georgie A. Thomas James E. Tibbetts Brian F. Walsh Kimon S. Zachos Staff Steve Norton Dennis Delay Doug Hall

School Funding in NH: History Recent Status Projections Current Policy Situation November 14, 2006

Who was John Legat?

In what year did the State of New Hampshire take control over the funding of the public schools? (this is a trick question)

Local Control Re-emerges ~ 1890  1647 – Provincial legislature required all towns with more than 50 households to have a school; funding is left to town meetings and selectmen.  1784 – Voters approved constitution that states “…it shall be the duty of the legislators and magistrates… to cherish …public schools.”  1789 – State legislature enacted first law on schools under the constitution. It starts by stating “all the (prior) laws of this State respecting schools … hereby are repealed.” In the new law the legislature set the specific amount to be raised for schools in each town and established personal fines for selectmen who did not do so. Tax used was statewide property tax (with different definition of property).  1834 – Supreme Court ruled that any town may raise more money for schools than the legislature requires, but not less.  1906 – Of all public school funding, 2/3 was ordered by legislature; 1/3 added by local choice; many towns still raised only that ordered by the legislature

Town of Hanover Thick black line is the amount ordered to be spent on the Hanover schools by the N.H. legislature. Thinner line with circles is the amount actually raised and spent. Until 1898 the town of Hanover, like most towns, raised and spent exactly what the legislature ordered. (Source: Walter A. Backofen, “The Town of Hanover as a Window on Public-School Funding in the State of New Hampshire: , Dartmouth College Library Bulletin, November 1998, p.33)

The State Tries to Participate  set minimum tax rate of $3.50 per thousand and maximum rate of $5.00 per thousand for “standard schools”  pro-rate state aid if not enough appropriated  minimum = $3.50, maximum = $6.00; cost set at $100/elementary & $125/high school student  maximum tax rate raised to $17.00; again pro-rate state aid if not enough appropriated  calculate cost based on amount appropriated  repeal maximum tax rate; enact “Augenblick” aid formula with automatic adjustment if not enough appropriated  $3,201/pupil for adequate education; $3.50 minimum rate raised to $6.66; Other taxes raised and new formula established  2004 – Statewide tax rate set at $3.33; aid capped  2005 – Statewide rate set at $2.20; “equitable” replaces “adequate”

School finance reform efforts in NH in the 20 th century  1919 – Initiated by Governor coupled with content reform goal of 50% of funds from state insufficient funds resulted in pro-rating aid  1947 – Initiated by Legislature goal of 50% of funds from state insufficient funds resulted in pro-rating aid  1997 – Initiated by Courts goal of an “adequacy floor” insufficient funds resulted in cap on growth of aid

“ I earnestly ask you to at least approximately solve the great problem.” Governor John H. Bartlett January 9, 1919 “to raise the work of such schools as are now below a reasonable standard, as nearly as practicable, to the level of the better schools of the state.”

"No power is to be taken from the school boards...except the power to have poor schools." Dr. Ernest Hopkins, President Dartmouth College, 1919

School Funding in NH: History Recent Status (1999 – 2005) Projections Current Policy Situation November 14, 2006

Claremont II - December 17, 1997 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.”

The “Adequacy” Reform Began in 1998 Legislature passed HB999 - new state “adequacy” aid in response to NH Supreme Court ruling in Claremont II Old “Foundation Aid” of $66 million was repealed Raised/introduced taxes for education Re-introduced statewide property tax for schools in tax year 1999 at $6.60 rate Distributed $407 million for school year 1999/2000 Legislature has regularly amended and changed the amount of aid and the distribution formula. Goals of plaintiffs were: greater pupil equity greater taxpayer equity

Change in Pupil Equity How have the differences in spending per pupil among the school districts that were cited by the Supreme Court changed since the reform?

Different Measures of Per Pupil Equity

Change in Taxpayer Equity How have the differences in tax rates among the towns that were cited by the Supreme Court changed since the reform?

Different Measures of Taxpayer Equity

Change in Taxpayer Equity The initial increase in taxpayer equity in 1999 has nearly all eroded away. Change in Pupil Equity No change in pupil equity ever occurred.

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

School Funding in NH: History Recent Status (1999 – 2005) Projections Current Policy Situation November 14, 2006

School Funding in NH: History Recent Status (1999 – 2005) Projections Current Policy Situation November 14, 2006

Recent annual increases in spending as measured by total district spending

Recent annual increases in spending as measured by average spending per pupil

In February 1998 the Center used this graphic to explain the sequence of steps that would logically follow from the Claremont II decision.

This graphic shows the steps that were taken and are in place in 2006.

Supreme Court Guidelines (December 1997) sufficient oral and written communication skills to enable students to function in a complex and rapidly changing civilization; sufficient knowledge of economic, social, and political systems to enable the student to make informed choices; sufficient understanding of governmental processes to enable the student to understand the issues that affect his or her community, state, and nation; sufficient self-knowledge and knowledge of his or her mental and physical wellness; sufficient grounding in the arts to enable each student to appreciate his or her cultural and historical heritage; sufficient training or preparation for advanced training in either academic or vocational fields so as to enable each child to choose and pursue life work intelligently; and sufficient levels of academic or vocational skills to enable public school students to compete favorably with their counterparts in surrounding states, in academics or in the job market. 140 words

Supreme Court Guidelines (December 1997) “Without intending to intrude upon prerogatives of other branches of government, … we anticipate that they will promptly develop and adopt specific criteria implementing these guidelines and, in completing this task, will appeal to a broad constituency. While the judiciary has the duty to construe and interpret the word `education' by providing broad constitutional guidelines, the Legislature is obligated to give specific substantive content to the word and to the program it deems necessary to provide that education within the broad guidelines.“

RSA 193-E:2 (October 1998 and current) Skill in reading, writing, and speaking English to enable them to communicate effectively and think creatively and critically. Skill in mathematics and familiarity with methods of science to enable them to analyze information, solve problems, and make rational decisions. Knowledge of the biological, physical, and earth sciences to enable them to understand and appreciate the world around them. Knowledge of civics and government, economics, geography, and history to enable them to participate in the democratic process and to make informed choices as responsible citizens. Grounding in the arts, languages, and literature to enable them to appreciate our cultural heritage and develop lifelong interests and involvement in these areas. Sound wellness and environmental practices to enable them to enhance their own well-being, as well as that of others. Skills for lifelong learning, including interpersonal and technological skills, to enable them to learn, work, and participate effectively in a changing society. 148 words

Supreme Court Decision (September 8, 2006) “We affirm the trial court’s finding that the State has failed to define a constitutionally adequate education and stay consideration of its remaining findings.” These trial court findings have been stayed: failed to determine the cost of an adequate education failed to satisfy the requirement of accountability (the current education funding law) creates a non-uniform tax rate in violation of Part II, Article 5 of the New Hampshire Constitution

Supreme Court Decision (September 8, 2006) “RSA 193-E:2 largely mirrors the seven criteria that we cited with approval in Claremont II…. We characterized those criteria as establishing “general” and “aspirational” guidelines for defining educational adequacy and made clear that the legislature was expected to develop and adopt specific criteria for implementing the guidelines. In the years since RSA 193-E:2 was adopted, this court and the State have acknowledged that constitutional adequacy has yet to be defined. Standing alone, RSA 193-E:2 does not fulfill the State’s duty to define the substantive content of a constitutionally adequate education in such a manner that the citizens of this state can know what the parameters of that educational program are. The right to a constitutionally adequate education is meaningless without standards that are enforceable and reviewable.”

Supreme Court Decision (September 8, 2006) “As to the core definitional issues, we will retain jurisdiction with the expectation that the political branches will define with specificity the components of a constitutionally adequate education before the end of fiscal year Should they fail to do so, we will then be required to take further action to enforce the mandates of Part II, Article 83 of the New Hampshire Constitution.” “Any definition of constitutional adequacy crafted by the political branches must be sufficiently clear to permit common understanding and allow for an objective determination of costs. Whatever the State identifies as comprising constitutional adequacy it must pay for. None of that financial obligation can be shifted to local school districts, regardless of their relative wealth or need.”

Next Steps ? Supreme Court 9/8/2006 Constitutional amendment Operational definition of “adequate education” Cost out the definition Create formula to distribute aid Amend “cherish” clause Amend tax clause Amend to remove court Revise definition of “adequate” Do “Nothing”

Operational Definition Input Criteria something similar to current state minimum standards, accreditation standards, checklist of conditions, etc. Outcome Criteria standardized testing of knowledge and skills, graduation, employment, entry wages, etc.

Sample Input Criteria Questions How many years of school constitute an adequate education? What, if any, music programs must be part of the curriculum? Are all school sports and clubs “beyond adequate” or not? Is there a maximum allowable class size? Must school buildings comply with fire, safety, electrical, and ventilation standards? To what extent is career guidance a requirement? Is a high school adequate if it offers no foreign language courses? If textbooks are required, how current must they be in science and history? What, if any, minimum academic or experience standards must teachers meet? What earth sciences knowledge must graduates have?

Sample Outcome Criteria Questions How is it determined if a student is “grounded” in the arts? What is the minimum performance that must be achieved by individual students on each standardized test? How will fluency in spoken English be measured? If schooling beyond 8 th grade is required, why are standardized tests not given at higher grade levels to measure adequacy? Which students are “educable” and which are not? Which “technological skills” must be demonstrated and how? Is a high school adequate if it offers no foreign language courses? What earth sciences knowledge must a school completer have? Is a school providing an adequate education if no students ever successfully complete its graduation standards?

Basic Costing Methods Use Existing Schools select a subset of existing schools and use their actual spending history with adjustments (HB999 of the 1999 session) Build Model Budgets blue ribbon committee develops theoretical budgets for schools of different sizes and grade levels (Massachusetts)

Distributing/Targeting Aid What do we know about targeting of aid (after the definition of adequate education?) The State is responsible for ensuring the resources to provide each student an “adequate education.” State aid does not have to be uniform per pupil. Cost of “adequate education” may vary based on characteristics of the students to be educated. The targeting of aid has nothing to do with the method used to raise the revenue. Any proposal to provide $0 in state aid to a particular town has the heavy burden of showing how the cost of an “adequate education” is $0 for the students in that town or how the state is otherwise providing the necessary resources to that town. What is the measure of a “poor town?”

3 Political Goals Are in Mathematical Conflict Cap/limit the total amount of aid Target more aid to “poor” towns “Hold harmless” current aid to all towns

What is the Deadline ? “We affirm the trial court’s finding that the State has failed to define a constitutionally adequate education and stay consideration of its remaining findings.” “… we will retain jurisdiction with the expectation that the political branches will define with specificity the components of a constitutionally adequate education before the end of fiscal year Should they fail to do so, we will then be required to take further action …”

What powers does a Court Master have?

All of our reports are available on the web: New Hampshire Center for Public Policy Studies “…to raise new ideas and improve policy debates through quality information and analysis on issues shaping New Hampshire’s future.” Board of Directors Martin L. Gross, Chair John B. Andrews John D. Crosier Gary Matteson Todd I. Selig Donna Sytek Georgie A. Thomas James E. Tibbetts Brian F. Walsh Kimon S. Zachos Staff Steve Norton Doug Hall