1. 1 “…to raise new ideas and improve policy debates through quality information and analysis on issues shaping New Hampshire’s future.” Board of Directors Todd I. Selig, Chair Michael Buckley John D. Crosier, Sr. William H. Dunlap Sheila T. Francoeur Stephen Reno Stuart V. Smith, Jr. Donna Sytek Brian F. Walsh Kimon S. Zachos Martin L. Gross, Chair Emeritus Staff Steve Norton, Executive Director Daniel Barrick, Deputy Director Under Construction Improving New Hampshire’s School Building Aid Program New Hampshire Center for Public Policy Studies January 2010

2. 2 What is School Building Aid? A state program that helps school districts pay for new construction and renovations. Program costs have increased sharply over the years, raising questions about stability and affordability. In addition, the state owes districts more than $500 million for past construction.

3. 3 Questions for policymakers What are the SBA program’s goals, and are they currently being met? What is the best way to pay off the existing obligation ($500+ million) while also controlling new program costs? Should school construction be part of the state’s education adequacy funding?

4. 4 School Building Aid has been among the biggest drivers of state budget increases in recent years – a nearly 140 percent rise since 2000. Source: New Hampshire Department of Education

5. 5 The existing obligation State owes nearly $540 million in SBA payments to districts through FY2037. That money is owed on construction that has already occurred, is now underway, or has already been approved. That money is still owed even if the state does away with all future school construction aid to districts.

6. 6 The existing obligation, cont. Source: New Hampshire Department of Education

7. 7 Where is the money going?

8. 8 What’s behind the increase? In the past decade, eleven major high school construction projects – totaling $544 million – received School Building Aid: Nashua – $123 million Manchester – $60 million Governor Wentworth Regional – $59.5 million Bedford – $52.2 million Exeter – $50.6 million Windham – $50.5 million

9. 9 Is more “targeting” the answer? Since 2005, the state has offered a higher share of aid to poorer school districts. The poorest districts are now eligible for 60 percent state aid. (Wealthy districts get the base rate of 30 percent.) How has the system worked so far? Since 2005, poor districts spent $5,815 per pupil on construction. Wealthy districts spent $4,272 per pupil But still not clear if the districts that need new buildings are actually spending the money.

10. 10 School construction spending in districts with highest and lowest School Building Aid reimbursement rates (2005-10) Source: New Hampshire Department of Education

11. 11 What is the solution? Some ideas…. Cap annual state appropriations. Establish annual priority list for new projects eligible for state aid. Lower the reimbursement rate for wealthier districts and increase the rate for poor districts. Assign a dedicated revenue source to pay down obligation for past construction. Establish an inventory of the state’s school facilities. End the practice of bonding School Building Aid payments.

12. 12 Questions to consider What should School Building Aid pay for? Land? Furniture? Athletic fields? What is the best way to pay for the program – out of general funds or through bonding? Should the program take a more “targeted” approach, increasing aid for poor districts and reducing (or eliminating) aid for wealthy districts? Should School Building Aid be included in the state’s adequacy formula? Should New Hampshire consider a centralized school building authority, with more direct oversight of building projects?

13. 13 For more information To read the Center’s complete report on New Hampshire’s School Building Aid program, go to nhpolicy.org. Find us on Facebook: facebook.com/nhpolicy