Cap for school spending preventing property tax hikes advances in New Hampshire

By Christian Wade | The Center Square

Cities and towns could cap school spending to prevent local property tax hikes under a proposal being advanced by New Hampshire lawmakers.

The measure, approved Tuesday by the House Municipal and County Government Committee on a 10-9 vote, would allow local governments to set a per student cap on education spending that would bind local school districts to a set budget ahead of every school year.

Under the plan, at least 60% of a community’s voters would need to approve a warrant article setting a cap on school budgets.

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New Hampshire Statehouse

The per student base rate in communities that adopt a budget cap would be allowed to rise due to inflation, according to the measure, but would require a 60% vote to override the cap.

The bill’s primary sponsor, Rep. Diane Pauer, R-Brookline, said the measure would give local governments more control over “unsustainable budgets that increase year after year, despite the student enrollment going down.”

“We constantly and continually hear about the affordability to be able to live in New Hampshire,” Pauer told the panel in testimony on Tuesday. “I would submit to you that part of this has to do with our taxation and our spending.”

Several Democratic lawmakers voted against advancing the measure, some raising concerns that the cap would strain school districts from increasing their budgets if they got additional students halfway through the school year or if they needed to increase their special education spending.

Other Democrats have suggested that the move is aimed at preventing local governments from raising property taxes directly in response to a new law that diverts public education dollars to send students to private schools. The new education freedom account law was championed by Republican Gov. Chris Sununu and the GOP-controlled Legislature.

The proposed cap is also opposed by the state’s teachers unions, which say it would widen the funding divide for many of New Hampshire’s public school districts.

“The implementation of a budget cap takes this educational inequality and amplifies it,” the National Education Association of New Hampshire posted in a statement opposing the bill. “The funding chasm will only widen if districts are deprived of local control over budgeting, particularly in light of the state’s failure to meet its funding obligations.”

The measure now moves to the full House, which would need to approve it before sending it to the Senate for consideration.

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