State cap on local school spending sparks heated debate

Yahoo

10-04-2025

Osborne: School spending cap would arrest 'runaway' local tax hikes
Jason Osborne
By Kevin Landrigan
House Majority Leader Jason Osborne said the New Hampshire Property Tax Relief Act — a state cap on local school spending increases tucked into the proposed House budget — would rescue homeowners 'held hostage by runaway' tax 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 rejected per-pupil spending caps at town and school district meetings last month.
The budget is up for a final vote today. (Thursday)
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 biggest 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 bill's 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 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 town or school district meeting.
Tuttle said all voters presented with this concept have rejected it.
In March alone, school voters turned down such budget-cap 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.'
Critics point out the Legislature just last year adopted a bill allowing residents to propose caps on their school district budgets, which led to last month's votes.
In January, Kearsarge Regional School District was one of the first to overwhelmingly reject a budget cap 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,' the Auburn Republican 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 accuse Republicans of adopting policies that raise local property taxes, and this is a 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 wrote.
Backers note the cap can also be overridden in case of emergency by using an existing state law.
Getting the proposal this far has been no easy task.
Despite the House GOP majority, the bill faced a major scare last month when a Democrat's move to table it barely failed, 189-187.
Then the bill narrowly won initial approval on a roll call vote, 190-185.
Packard sent the bill to the House Finance Committee, which decided to retain the separate legislation until next year and instead tuck the proposal into the state budget's trailer bill (HB 2).
Supporters believe having it in the trailer bill 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.
Estimated cap: 4.1%
The nonpartisan Reaching Higher NH is the only group to have done an analysis on its impact.
It concludes the maximum budget increase for 2026, based on the five-year Consumer Price Index average increase, is 4.1%.
According to this study, 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 the Reaching Higher NH 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,' it concluded.
Critics warn school spending cap would lock in inequities
David Luneau
Rep. David Luneau, D-Hopkinton, the ranking Democrat on the House Education Funding Committee, said the proposal would perpetuate inequities between 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.
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