When the House of Representatives meets on Wednesday, the chief topic of debate will be the state budget and, in particular, the House Finance Committee’s proposed amendments to HB 1 and HB 2, the two bills that comprise New Hampshire’s revenue and spending plan for FY 2016-2017.
Those amendments will not be the only ones up for consideration, however. Among the additional changes that may be considered on the House floor are further modifications to the way in which education aid to local districts will be distributed in FY 2017.
All told, the version of the state budget approved by the House Finance Committee last week would reduce the amount of adequate education aid to be distributed in FY 2017 by approximately $33 million, relative to current law. That reduction, in turn, is the result of two separate changes to the formula determining the amount of aid each community receives. First, the budget put forward by the Committee would eliminate the statutory cap on the increase any one district can receive in adequacy aid from one year to the next. This would mean that some districts would see an increase in FY 2017 beyond what they could expect to receive under current law. The second, and more sizable, change found in the Committee’s budget proposal is a reduction in the so-called “stabilization” grants communities are scheduled to receive; under the Committee’s plan, those grants would be reduced by either 40 percent or $750,000, whichever is less. In aggregate terms, this reduction in stabilization grants would amount to approximately 28 percent or about $44 million relative to current law.
Some Representatives have suggested simply reducing stabilization funds for every community by approximately 28 percent, thus yielding the same $44 million reduction relative to current law, but not limiting the impact at a set dollar figure.
The table below, based upon a preliminary analysis by the Office of the Legislative Budget Assistant (LBA), attempts to assess the impact of these two approaches on New Hampshire’s cities and towns. (The table excludes the fifteen unincorporated places found in the LBA’s original analysis.) It suggests that the two approaches would result in education aid reductions for roughly the same number of communities, but that the majority of communities would experience smaller reductions under the 28 percent across-the-board approach. Importantly, though, there are a dozen communities that would be adversely affected by the removal of the $750,000 limit included in the Committee’s initial proposal. Among that dozen are some of the largest cities and towns in the state, including Manchester, Nashua, Derry, and Keene.