HB870 (2007) Detail

Relative to the calculation and disbursement of adequate education grants.


HB 870-FN-A-LOCAL – AS INTRODUCED

2007 SESSION

07-0050

04/03

HOUSE BILL 870-FN-A-LOCAL

AN ACT relative to the calculation and disbursement of adequate education grants.

SPONSORS: Rep. Hess, Merr 9; Rep. Kurk, Hills 7

COMMITTEE: Education

ANALYSIS

This bill revises the method for calculating and disbursing adequate education grant amounts and distributes supplemental per pupil aid for certain pupils. The bill also establishes an adequate education and education financing committee.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

07-0050

04/03

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Seven

AN ACT relative to the calculation and disbursement of adequate education grants.

Be it Enacted by the Senate and House of Representatives in General Court convened:

1 Purpose; Intent.

I. The general court recognizes the inherent imprecision, subjectivity, and difficulty in determining the cost of an adequate education. Numerous complex financial, budgetary, administrative, and educational elements must be in place in order for the state to fully meet the mandates of Claremont II. Those mandates coupled with the policy of the state recognize that an adequate public education is not a static concept removed from the demands of an evolving world. Such an education shall provide all students with an opportunity to acquire the knowledge and skills necessary to prepare them for successful participation in the social, economic, scientific, technological, and civic realities of society, now and in the years to come. The general court has considered that the needed changes are long-term in nature, truly embedded on the local and state level and are both cost and educationally effective.

II. Through the enactment of RSA 193-E, the general court defined the goals of an adequate education. The definition is the basis for the curriculum frameworks and grade level expectations which specifically address the importance of establishing and measuring what all New Hampshire students should know and be able to do. The curriculum frameworks and grade level-expectations were developed with the widespread participation of educators, business people, government officials, community representatives, and parents. They have evolved into a critical component of providing a quality public education to New Hampshire students.

III. Through the enactment of RSA 193-C, the general court established the statewide improvement and assessment program to assess student learning and effectiveness of instruction. The general court finds that in determining the cost of a constitutionally adequate education, performance-based outcome criteria, specifically the New England Common Assessment Program (NECAP) test scores, can be used to identify school districts that are delivering such a constitutionally adequate education. The NECAP tests are comprehensive and difficult. Students taking these tests are scored on 4 levels of mastery. The general court finds that students who score at the proficient level or above on these state tests are making progress toward achieving the goals set forth in RSA 193-E.

IV. There is no single, empirically correct method of establishing the cost of an adequate education. Therefore, after careful consideration and study, the general court selects a methodology for establishing the cost of an adequate education that is a valid and just methodology. The general court finds that school districts that have 40 percent or more of students scoring at or above the proficient level on the NECAP tests are those districts that are meeting the relevant outcome expectations and are providing an opportunity for an adequate education. As such, in determining the cost of an adequate education, the general court includes all school districts with 40 percent or more of students scoring at or above the proficient level in its grant calculations. The general court believes that this range of results provides a reasonable sample of districts that excludes unrepresentative demographic extremes, including but not limited to, parental income and educational levels. The general court finds that those school districts providing an adequate public education in the most cost effective manner are those school districts in the sample group with per pupil base level education costs in the lowest 25 percent of the selected school districts. Additionally, the cost of an education calculated from performance based outcome criteria includes costs that are not required to provide the curriculum, programs, and services essential for a constitutionally adequate education. Therefore, it is reasonable to adjust this cost downward by a percentage that reflects some administrative, curricular, extra-curricular, and other costs incorporated in the available data. Over time it may be possible to calculate this adjustment with greater precision, however, at this time the general court has used an estimate for this adjustment.

V. In cities and towns with relatively higher property values, sharp increases in property taxes may cause business failure where fixed costs increase faster than the ability to recoup them. Commercial rental property owners may find themselves locked in by lease provisions that prevent them from recouping tax increases from tenants, resulting in reduced reinvestment in the property, and potential foreclosure or bankruptcy. Also, substantial increases in property tax obligations may cause or permit lenders to foreclose on mortgage notes based on the decreased ability of the borrower to meet the income level required by the lender. Tax capitalization which decreases property values may also cause foreclosures on otherwise performing loans because the regulated lending institution must call the loan to comply with rules and regulations.

2 State Aid to Education; Definitions. RSA 198:38 is repealed and reenacted to read as follows:

198:38 Definitions. In this subdivision:

I. “Average base cost per pupil” means the amount determined in RSA 198:40-a.

II. “Average daily membership in attendance” means average daily membership in attendance as defined in RSA 189:1-d, III.

III. “Average daily membership in residence” and “resident pupils” mean the average daily membership in residence as defined in RSA 189:1-d, IV except that no kindergarten pupil shall count as more than ½ day attendance per calendar day.

IV. “Base expenditure per pupil” for each school district that operates an elementary school means the amounts calculated in accordance with RSA 198:40-a, I(a).

V. “Determination year” means the fiscal year that was 3 years prior to the fiscal year for which aid is to be determined.

VI. “Disabled child” means an educationally disabled child as defined in RSA 186-C:2, I.

VII. “Elementary school” means a school with any or all of the grade levels kindergarten through grade 8.

VIII. “High school” means a school with any of the grades 9 through 12.

IX. “Limited English proficient pupil” means a pupil in kindergarten through grade 12 receiving instruction in English for speakers of other languages for 5 or more sessions per week. A session is defined as not less than 40 minutes. Pupils shall be counted and attributed to the municipality or municipalities operating the school attended by the pupils.

X. “Municipality” means a city, town, or unincorporated place.

XI. “School district” means school district as defined in RSA 194:1 or RSA 195:1.

XII. “Transportation costs” means the costs of transporting pupils to and from school and other school activities reported by school districts on the DOE-25 form.

XIII. “Weighted pupils” means:

(a) Resident pupils weighted as follows:

(1) Every pupil, excluding kindergarten pupils, 1.0.

(2) Kindergarten pupils, 0.5.

(3) A high school pupil, an additional weight of 0.2.

(4) A disabled child, an additional weight of 1.0.

(b) Additional weights based on pupils eligible to receive a free or reduced-price meal shall be calculated by multiplying each municipality’s elementary average daily membership in residence by the percentage of elementary pupils eligible to receive a free or reduced-price meal in the district of residence, and multiplied by:

(1) If the district percent is less than or equal to the percentage of elementary pupils eligible to receive a free or reduced-price meal statewide multiplied by 0.85, zero.

(2) If the district percentage is greater than the percentage of elementary pupils eligible to receive a free or reduced-price meal statewide multiplied by 0.85, the lesser of 1.0 or a number equal to 5 times the difference between the district percentage and the state average percentage multiplied by 0.85.

(3) If the elementary average daily membership of the district of residence is less than 10, the percentage of elementary pupils eligible to receive a free or reduced-price meal shall be equal to the percentage eligible in that district in which the majority of the elementary pupils attend.

3 State Aid to Education; Per Pupil Adequate Education Cost. RSA 198:40-a is repealed and reenacted to read as follows:

198:40-a Base Cost Per Pupil; Adequate Education Grant.

I. For the biennium beginning July 1, 2007, and every biennium thereafter, the average base cost per pupil shall be established using the following formula:

(a) The department of education shall calculate the base expenditure per pupil for each school district that operates an elementary school by subtracting from the total expenditures at the elementary school level, tuition to other school districts or approved educational programs, capital costs and debt service on such costs, special education costs, food service costs, transportation costs, and federal revenues not otherwise deducted. For each school district, this amount shall be divided by the average daily membership in attendance at the elementary school level to attain the base expenditure per pupil.

(b) The average base cost per pupil shall be calculated as follows:

(1) The department of education shall identify those school districts where 40 percent or more of the elementary pupils enrolled in the grades tested on the day testing began, achieved a scaled score, in the statewide educational improvement and assessment program administered pursuant to RSA 193-C, in all areas tested, equivalent to performance at the proficient level or above.

(2) From the school districts identified in subparagraph I(b)(1) of this section, the department of education shall then identify those school districts that have the lowest base expenditure per pupil as calculated pursuant to subparagraph I(a) and which represent, as nearly as possible, 25 percent of the average daily membership in attendance at the elementary level of the school districts identified in subparagraph I(b)(1) of this section.

(3) The department of education shall calculate the average base cost per pupil by multiplying the base cost per pupil of each school district identified in subparagraph I(b)(2) of this section by the average daily membership in attendance at each of the selected school districts, and add the results across all districts selected. This sum shall then be divided by the total average daily membership in attendance at the elementary school level in all of the selected school districts and the result shall be multiplied by .9025.

II. The weighted average daily membership in residence for each district shall be calculated by totaling the weighted pupils as defined in RSA 198:38, XIII. The statewide weighted average daily membership in residence of pupils shall be calculated by combining the weighted average daily membership in residence of each school district in the state.

III. For each fiscal year, the statewide cost of an adequate education for all pupils shall be calculated by multiplying the average base cost per pupil by the statewide weighted average daily membership in residence of pupils in the determination year.

4 State Aid to Education; Supplemental Per Pupil Aid. RSA 198:40-b is repealed and reenacted to read as follows:

198:40-b Supplemental Per Pupil Aid. The department of education shall calculate supplemental per pupil aid as follows:

I. For the fiscal year beginning July 1, 2007, a municipality with a local equalized valuation including utilities per pupil, which is less than or equal to 150 percent of the total statewide equalized valuation including utilities per pupil, and a median family income which is less than or equal to 150 percent of the state average median family income, shall be eligible to receive supplemental per pupil aid for such municipality’s disabled pupils, pupils eligible for free or reduced-price meals, limited English proficient pupils, and transportation costs as follows:

(a) A per pupil amount shall be determined by dividing the total statewide average equalized valuation including utilities per pupil by 1,000 and then multiplying by the state tax capacity rate.

(b) The per pupil amount calculated in subparagraph (a) shall be multiplied by the average daily membership in residence of disabled pupils in the municipality. This amount shall be available as supplemental aid for disabled pupils in the municipality.

(c) The per pupil amount calculated in subparagraph (a) shall be multiplied by the number of pupils eligible for a free or reduced-price meal in the municipality. This amount shall be available as supplemental aid for pupils eligible to receive a free or reduced-price meal in the municipality.

(d) The amount of $1,000 shall be multiplied by the number of limited English proficient pupils in the municipality.

(e) Total supplemental per pupil aid for the municipality shall be the sum of subparagraphs (b), (c), and (d) provided that no pupil shall be counted in more than one category for supplemental per pupil aid.

II. For the biennium beginning July 1, 2009, a municipality with a local equalized valuation including utilities per pupil, which is less than or equal to 150 percent of the total statewide equalized valuation including utilities per pupil and a median family income which is less than or equal to 150 percent of the state average median family income, shall be eligible to receive supplemental per pupil aid for such municipality’s disabled pupils, pupils eligible for free or reduced-price meals, and limited English proficient pupils as follows:

(a) A per pupil amount for disabled pupils shall be determined by dividing $75,000,000 by the total average daily membership in residence of disabled pupils in municipalities eligible for supplemental per pupil aid. For each eligible municipality, this per pupil amount shall be multiplied by the average daily membership of disabled pupils and the resulting amount shall be available as supplemental per pupil aid. Beginning July 1, 2009, and in the first year of each biennium thereafter, the $75,000,000 amount in this subparagraph shall be increased by the greater of the average annual rate of inflation or 3 percent.

(b) A per pupil amount for pupils eligible for free or reduced-priced meals shall be determined by dividing $75,000,000 by the total number of students eligible for free or reduced priced meals in municipalities eligible for supplemental per pupil aid. For each eligible municipality, the per pupil amount shall be multiplied by the number of pupils eligible to receive a free or reduced-price meal and the resulting amount shall be available as supplemental per pupil aid. Beginning July 1, 2009, and in the first year of each biennium thereafter, the $75,000,000 amount in this subparagraph shall be increased by the greater of the average annual rate of inflation or 3 percent.

(c) The amount of $1,000 shall be multiplied by the number of limited English proficient pupils in each eligible municipality.

(d) Total supplemental per pupil aid for the municipality shall be the sum of subparagraphs (a), (b), and (c) provided that no pupil shall be counted in more than one category for supplemental per pupil aid.

III. A municipality with a local equalized valuation including utilities per pupil which is greater than 150 percent of the total statewide equalized valuation including utilities per pupil, or a median family income which is greater than 150 percent of the state average, shall not receive supplemental per pupil aid under this section.

IV. In this section:

(a) “Local equalized valuation including utilities per pupil” shall be the equalized valuation of all property including utilities in a municipality, as determined by the department of revenue administration, divided by the average daily membership in residence in the municipality.

(b) “Total statewide equalized valuation including utilities per pupil” shall be the total statewide equalized valuation including utilities, as determined by the department of revenue administration, divided by the total statewide average daily membership in residence.

(c) “Median family income” means the most recent census data published for New Hampshire counties and municipalities by the United States Census Bureau, United States Department of Commerce, as of October 1 preceding the beginning of the biennium for which aid is to be determined.

(d) “State tax capacity rate’’ means the total revenue raised statewide by the local education tax assessment for the determination year multiplied by 1,000. This amount shall be divided by the total statewide equalized valuation including utilities that was the tax base for the determination year.

(e) “Average annual rate of inflation” means average annual percentage rate of inflation based on the northeast region consumer price index for all urban consumers as published by the Bureau of Labor Statistics, United States Department of Labor, for the 4 calendar years ending 18 months before the beginning of the fiscal year for which aid is to be determined.

5 State Aid to Education; Adequate Education Grants. RSA 198:40-c is repealed and reenacted to read as follows:

198:40-c Determination of Adequate Education Grants.

I. Except for municipalities where all school districts therein provide education to all of their pupils by paying tuition to other institutions, the department of education shall determine the amount of the adequate education grant for the municipality by multiplying the average base cost per pupil by the weighted average daily membership in residence for the municipality.

II. For municipalities where all school districts therein provide education to all of their pupils by paying tuition to other institutions, the department of education shall determine the amount of the adequate education grant for each municipality as the lesser of the following 2 calculations:

(a) The amount calculated in accordance with paragraph I of this section; or

(b) The total amount paid for items of current education expense as determined by the department of education.

III. The department of education shall certify the amount of each grant made under RSA 198-40-c to the state treasurer and direct the payment thereof to the school district. When a payment of a grant is made to a school district, the municipality on whose behalf the payment is made, shall receive notification from the state treasurer of the amount of the payment made to its school district or districts.

6 Reference Changes. Amend the following RSA sections by deleting “equitable” and inserting “adequate” in place thereof: RSA 21-N:1, II(c); RSA 193:1, I(c); RSA 193-E:1, II; RSA 193-E:2; the section heading to RSA 193-E:3; RSA 194-B:3, II(i); RSA 195:14, I(c); RSA 195:14, I(d)(2)-(3); RSA 195:14-a, I; RSA 198:41, II(b); RSA 198:41, III; the section heading to RSA 198:42; RSA 198:42, I-II; RSA 198:43; RSA 198:48; RSA 198:48-a, VII-VIII.

7 Reference Change. Amend the subdivision heading immediately preceding RSA 198:38 to read as follows:

State Aid [for Educational Equality] to Education; Education Trust Fund

8 Cooperative School Districts; State Aid. Amend RSA 195:15 to read as follows:

195:15 State Aid. The state aid to which a cooperative elementary and/or secondary district shall be entitled shall be the total of those shares of the aid to which the pupils attending the cooperative district would have entitled the pre-existing districts, had they remained in the pre-existing districts. For the purposes of crediting the cooperative district’s adequate education cost to the pre-existing districts, each such pre-existing district shall have its adequate education cost [under RSA 198:38, VII] credited against its share of the cooperative school district budget. However, cooperative school districts formed by 2 or more pre-existing districts whose boundaries approximate those of a single township in which they are located shall be treated as a single school district for the purposes of this section.

9 Education Tax. RSA 76:3 is repealed and reenacted to read as follows:

76:3 Education Tax. An annual education tax of $2.51 per $1,000 of assessed value is hereby imposed on all persons and property taxable pursuant to RSA 72 and RSA 73, except property subject to tax under RSA 82 and RSA 83-F. Payment of taxes imposed under this section shall be made by the taxpayer directly to the department of revenue administration.

10 New Section; Adequate Public Education. Amend RSA 193-E by inserting after section 2 the following new section:

193-E:2-a Finding of Adequate Education. The general court finds that a school district is providing an opportunity for an adequate education when 40 percent or more of the elementary students in a school district score at or above the “proficient” level in the New England common assessment program administered by the department of education pursuant to RSA 193-C.

11 Adequate Education and Education Financing Committee Established.

I. An adequate education and education funding financing committee shall be established consisting of:

(a) Five members of the house of representatives, appointed by the speaker of the house of representatives.

(b) Five members of the senate, appointed by the senate president.

II. The chair of the committee shall rotate biennially between the first-named house member and the first-named senate member. The first chairperson shall be the chairperson of the house finance committee. A member shall only serve while a member of the general court. The members shall not be compensated but shall receive mileage at the legislative rate when carrying out their duties.

III. In order to ensure that all students are provided an adequate education, the duties of the committee shall be as follows:

(a) Recommend the costs of an adequate education for all students in New Hampshire by calculating adjustments for individual school districts based on yearly inflation, cost of living variances, diseconomies of scale, transportation variability, demographics, including for school districts with a disproportionate number of students who are economically disadvantaged or have educational disabilities, and such other factors as deemed relevant.

(b) Recommend the amount of state aid, including building aid, to be distributed to cities and towns based upon the cost of an adequate education as recommended in subparagraph (a) and the method for distributing the state aid.

(c) Recommend changes in policy and procedure in the areas of educational improvement and accountability.

(d) Recommend interim and permanent processes to ensure adequate planning and implementation at the local and state level of special education and educationally related services, including planning for and development, on an interagency basis, of local school-based options for pupils who have been placed in alternative or separate schools who could be placed in appropriate less restrictive options if available.

IV. The committee shall report its findings and recommendations no later than December 1, 2008. The report shall include, for each recommendation, proposed implementation schedules with timelines, specific steps, agencies and persons responsible, and resources needed. Where feasible, all plans, measures, and initiatives shall be proposed as legislation or administration so that they will have the force of law. All recommendations and plans shall be designed to be fully implemented no later than September 1, 2012.

V. The department of justice, department of revenue administration, department of education, and department of health and human services shall provide the committee with assistance.

VI. The committee may, at its discretion, retain consultants to provide information and advice on matters before the committee.

12 Appropriation. There is hereby appropriated the sum of $200,000 for the biennium ending June 30, 2009 to the adequate education and education financing committee for the purposes set forth in section 11 of this act. The governor is authorized to draw a warrant for said sum out of any money in the treasury not otherwise appropriated.

13 Effective Date. This act shall take effect July 1, 2007.

LBAO

07-0050

01/31/07

HB 870-FN-A-LOCAL - FISCAL NOTE

AN ACT relative to the calculation and disbursement of adequate education grants.

FISCAL IMPACT:

    Due to time constraints, the Office of Legislative Budget Assistant is unable to provide a fiscal note for this bill at this time. When completed, the fiscal note will be forwarded to the House Clerk's Office.