Local school spending cap sparks heated debate
Osborne: School spending cap would arrest 'runaway' local tax hikes
House Majority Leader Jason Osborne, R-Salem, is a prominent supporter of the New Hampshire Property Tax Relief Act that if adopted would impose a cap on school spending at the local level.
House Majority Leader Jason Osborne, R-Auburn, said the New Hampshire Property Tax Relief Act — a cap on local school spending increases — tucked into the proposed House budget up for a final vote Thursday would rescue homeowners 'held hostage by runaway' hikes.
Megan Tuttle, president of the National Education Association of New Hampshire, said the cap 'ignores the will of the voters' since residents in 17 towns have rejected per pupil spending caps at town and school district meetings last month.
While the issue has gotten much less attention in the budget than significant cuts to higher education, the arts, energy and human service programs, both sides agree the proposal, if adopted, could have the most impact on budgets at the local level.
'The Property Tax Protection Act is the heart of this budget,' House Speaker Sherman Packard, R-Londonderry, said in a recent statement that adjusted the branding a bit.
'It will ensure municipalities stay fiscally responsible, curb runaway budgets, and protect Granite Staters from tax hikes — without cutting essential services.'
If signed into law, the cap would limit school budget spending to the previous year, minus what's been spent on facility purchase and construction, times the previous, five-year average of the U.S. Consumer Price Index.
To go above that school spending cap would require a two-thirds vote of a city council or voters at a town or school district meeting.
Tuttle said all voters in communities given this concept have rejected it.
In March alone, voters turned down these warrant articles in Bedford, ConVal, Epping, Epsom, Greenland, Haverhill, Hollis, Salem, Thornton and Weare.
"As taxpayers, educators understand the frustration with the rise in property taxes — and we feel it, too," Tuttle said.
"But putting arbitrary spending caps on our local school budgets is not the way to address a funding crisis created by the state's failure to fully fund an adequate education."
Keeping idea alive hasn't been easy
Critics of this new idea point out the Legislature just last year adopted a bill from Sen. Keith Murphy, R-Manchester, allowing citizens to seek a budget cap by school districts (SB 383) which led to these votes in opposition to the idea.
Kearsarge Regional School District last January was one of the first to overwhelmingly reject an article and Osborne reacted to that news right away.
'Perhaps, if voters are unwilling to cap themselves, the state will step in and cap local taxes for them,' Osborne said on Jan. 5.
The bill (HB 675) as introduced days later, deals with several property tax issues that got pared down to this school spending cap.
'For too long, New Hampshire homeowners have been held hostage by runaway property taxes driven by out-of-control local school and municipal budgets,' Osborne wrote in a recent Union Leader op-ed on the topic.
'Hardworking families who play by the rules, work hard, pay their taxes, and contribute to their communities should not be forced to bankroll unchecked spending by local officials.'
Osborne said Democrats charge Republicans with adopting policies that raise local property taxes and this is the response.
'It pressures school budgets to stay within responsible limits, discouraging the never-ending tax hikes that make it harder for families to afford their homes. With the Property Tax Relief Act in place, local school budgets will be challenged to exercise fiscal discipline, ensuring that future generations don't have to bear the burden of today's overspending,' Osborne said.
Backers note the cap can also be overridden in case of emergency by using an existing state law for this unforeseen purpose.
Getting the concept this far has been no easy matter.
Despite the House GOP majority, the bill faced a bigtime scare last month when a Democrat's move to table it barely failed, 189-187.
Then a rollcall vote to initially approve it squeaked through, 190-185.
Packard sent the bill to the House Finance Committee that decided to retain the separate legislation until next year and instead tuck it into the trailer bill to the state budget (HB 2).
Supporters believe this increases likelihood it could become part of a final budget compromise.
Gov. Kelly Ayotte said she hadn't seen the details.
'I haven't studied the specifics of that. I certainly believe in local control, but I also think it is important that local officials protect taxpayers at the local level,' Ayotte said.
The non-partisan, Reaching Higher N.H. is the only group to have done an analysis on its impact.
It concludes the CPI average for 2026 regarding school spending could increase by 4.1%
Cap supporters: School enrollment down, spending way up
According to this group, the relevant spending on schools minus facilities could go up by these amounts in some sample communities:
• Manchester: $78.4 million this year to $81.6 million in 2026 and $84.9 million in 2027.
• Nashua: $54.8 million to $57.1 million in 2026 and $59.4 million in 2027.
• Bedford: $55.2 million to $57.5 million in 2026 and $59.9 million in 2027.
• Londonderry: $62.8 million to $65.4 million in 2026 and $68 million in 2027.
• Rochester: $35.4 million to $36.8 million in 2026 and $38.3 million in 2027.
• Salem: $49.7 million to $51.8 million in 2026 and $53.9 million in 2027.
But its own report warns of a bleaker picture.
'The mandated budget cap would actually reduce funding for most school districts, even before accounting for inflation, over the next five years,' Reaching Higher N.H. concluded.
Critics warn school spending cap would lock in inequities
State Rep. David Luneau, D-Hopkinton, said if adopted a school spending cap would be cement the wide disparity between the ability to support public education in property poor and rich towns.
Rep. David Luneau, D-Hopkinton and the ranking Democrat on the House Education Funding Committee, said the proposal would cement the inequities between the property-rich and property-poor towns.
'Great for Waterville Valley spending $36K per student; not so good for Manchester. It's bad for kids and locks in opportunity gaps,' Luneau said.
Rep. Dan McGuire, R-Epsom, said while public school enrollment has dropped 11% in the past 30 years, the number of school staff has increased 55%.
Spending per pupil in the last decade has gone up 58% over the past decade, topping the 35% inflation rate over the period, McGuire said.
Rep. Hope Damon, D-Sunapee, said a spending cap would only be fair if the state wasn't near the bottom in state support for its public schools.
'There may be merit to a cap on school district budgets in the future – but certainly not before we have equitable funding from the state to municipalities so that a student's zip code doesn't determine the adequacy of their education resources,' Damon added.
Katherine Blume of Weare supported the idea in her written testimony.
'Everyone is concerned what will happen to their school district if it's the only one around with a budget cap. This bill levels the playing field,' Blume said.
Christine Hodsdon of Exeter had the opposite view.
'This kind of extreme legislation is anti-democratic, anti-public education, anti-student and will hurt the nearly 90% of students in New Hampshire who attend their local public school,' Hodsdon added.
klandrigan@unionleader.com
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