Collars Up: Education Funding and State Budget Updates

Keeping Up the Education Funding Collar

One of three bills is making headway in a move to hold the status quo on education funding. As crafted in 2008, the state’s formula for education aid to cities and towns is scheduled to change beginning July 1, 2011: Some cities would receive more money under the new funding formula, while others would get less.

Senate Bill 465, sponsored by Sen. Molly Kelly (D-Keene) would extend the current transitional funding formula by one extra year. The “collar,” as it’s known, was meant to be temporary to help towns prepare for upcoming changes.

Many in cities such as Manchester, which is poised to get more money without the collar, are anxious for it to come off. Not so in Derry, for example, where town officials this spring predicted a $3.80 spike in property taxes to make up for what they’ll lose.

Under the collar, no town could be granted more than 15 percent above or 50 percent below what it received in state aid in 2009. Two similar bills to extend the collar were already killed in the House and Senate this year. Senate Bill 462 (Sen. Robert Letourneau, R-Derry) would have kept the collar on through 2014. House Bill 1677 (Rep. Kenneth Gould, R-Derry) would have kept it through 2013.

The difference in the bills, and possibly in the fate of SB 465, comes in its amendment. Originally seeking a two-year extension of the collar through 2012, lawmakers compromised with one extra year. They also added a clause that established a committee to study how sustainable existing plans are for state funding of K-12 education, including adequate education grants, fiscal capacity disparity aid and catastrophic aid.

(Newly proposed budget fixes for the current state budget shortfall would reduce catastrophic aid by $7.8 million over the next two years.)

The N.H. Supreme Court voted in 2008 to allow the Legislature to settle the state’s ongoing debate over public school funding. But, their ruling left the door open for future court intervention if the Legislature fails to finance its own plans.

The House, having killed HB 1677 with a 203-131 roll call vote (meaning each legislator’s vote is recorded by name), will now have to reconsider the issue. As Rep. Steve Vaillancourt (R-Manchester) points out, it’s an interesting one because it falls more along town boundaries than party lines. Representatives whose districts stand to lose or gain money without the collar take fairly predictable positions, but those whose districts cover both sides of the fiscal disparity coin have a tougher vote to make.

The House Finance Committee held a public hearing on SB 465 April 13; a full committee work session is scheduled for April 22 and an executive session, when the committee will likely make its recommendation for the full House, is scheduled for April 27. All committee meetings are open to the public.

Budget Update

Last week, the Joint Legislative Fiscal Committee approved Gov. John Lynch’s executive order to cut more than $25 million in General Fund spending. The reduction covers 32 state offices, and represents just a portion of the budget fixes that must be found by June 30, the end of the current fiscal year.

The rest of Gov. Lynch’s proposed remedy comes in the form of a lengthy amendment to Senate Bill 450. Sponsored by Sen. Kathleen Sgambati (D-Tilton), SB 450 makes several changes to the Dept. of Health and Human Services. Its amendment embodies Gov. Lynch’s proposed budget cuts, and was submitted “as a courtesy to him” by Rep. Marjorie Smith (D-Durham), who chairs the House Finance Committee.

One pattern among the proposals is a consolidation of authority under the DHHS Commissioner, a role currently served by Nicholas Toumpas. N.H. refugee resettlement and DWI offender intervention are two programs whose administration would be moved to the Commissioner’s office, for example.

More fundamental than that, however, is a clause in SB 450 that gives the commissioner “very significant” and “very broad” authority to transfer funds within and among various DHHS line items, according to Smith.

“I have tremendous confidence in the current commissioner, who I believe is committed to carrying out the policy set by the Legislature,” Smith says. However, although legislative oversight of DHHS would certainly continue, Smith fears SB 450 is written so strongly that it “would almost make legislative oversight meaningless.”

Senate Bill 450 and its proposed amendments continue a rigorous schedule of public hearings and committee work sessions, including a full day on April 20 in conjunction with the departments of Health & Human Services, Environmental Services, Corrections and the Judicial Branch. Two public hearings on SB 450 as it relates to the Public Works & Highways and the Ways & Means committees are also scheduled for April 20.

April 22 brings a full committee work session on SB 450, coordinated with the Dept. of Administrative Services, the State Treasurer, the Dept. of Resources and Economic Development, the Office of Energy and Planning, the Dept. of Education, and the Office of Information Technology.

Two additional work sessions are scheduled for April 27 and 29.

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Posted by Hilary Niles on Apr 19 2010. Filed under By the Issues, Education, funding, Government, state budget. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry