HB597 (2017) Detail

Relative to calculating the cost of an opportunity for an adequate education and providing fiscal capacity disparity aid.


HB 597-FN-LOCAL - AS INTRODUCED

 

 

2017 SESSION

17-0738

04/03

 

HOUSE BILL 597-FN-LOCAL

 

AN ACT relative to calculating the cost of an opportunity for an adequate education and providing fiscal capacity disparity aid.

 

SPONSORS: Rep. Ames, Ches. 9; Rep. Cloutier, Sull. 10; Rep. Myler, Merr. 10; Rep. Heath, Hills. 14; Rep. Rosenwald, Hills. 30; Rep. Berch, Ches. 1; Rep. Luneau, Merr. 10; Rep. Lovejoy, Rock. 36; Rep. Rogers, Merr. 28; Sen. Feltes, Dist 15; Sen. Watters, Dist 4

 

COMMITTEE: Education

 

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ANALYSIS

 

This bill:

 

I.  Amends the adequate education grant amounts to municipalities for all categories of differentiated aid.

 

II.  Requires aid to municipalities based on fiscal capacity disparity which is calculated using a municipality's equalized valuation per pupil and median family income.  

 

III.  Amends the amount of the stabilization grant to be disbursed in the 2018-2019 biennium.

 

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

17-0738

04/03

 

STATE OF NEW HAMPSHIRE

 

In the Year of Our Lord Two Thousand Seventeen

 

AN ACT relative to calculating the cost of an opportunity for an adequate education and providing fiscal capacity disparity aid.

 

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

 

1  Findings.

I.  The general court finds that the cost of the opportunity for an adequate education for all students in a municipality’s average daily membership in attendance (ADMA) in a school district rises in proportion to the rise in the proportion of economically disadvantaged students in the municipality’s ADMA and that a purpose of this act is to adjust the current procedure for calculating the cost of an adequate education as provided in this act in order to ensure that the state meets its constitutional duty to provide the opportunity for an adequate education to all students.  

II.  The general court recognizes that certain communities lack the relative wealth and fiscal capacity to fund local education to the extent desired by those communities.  For this reason, the general court finds it appropriate to provide money above the cost of the opportunity for an adequate education based upon the fiscal capacity and relative need of certain communities.

2  Cost of an Opportunity for an Adequate Education.  Amend RSA 198:40-a, I-II to read as follows:

I.  For the biennium beginning July 1, [2015] 2017, the annual cost of providing the opportunity for an adequate education as defined in RSA 193-E:2-a shall be as specified in paragraph II.  The department shall adjust the rates specified in this paragraph in accordance with RSA 198:40-d.

II.(a)  A cost of [$3,561.27] $3,636.06 per pupil in the ADMA, plus differentiated aid as follows:

(b)(1)  An additional [$1,780.63] $454.51 for each pupil in the ADMA who is eligible for a free or reduced price meal if less than 12 percent of the school district's ADMA in the determination year are eligible for the free or reduced price meal program; or

(2)  An additional $909.02 for each pupil in the ADMA who is eligible for a free or reduced price meal if at least 12 percent but less than 24 percent of the pupils reported in the school district's ADMA in the determination year are eligible for the free or reduced price meal program; or

(3)  An additional $1,818.03 for each pupil in the ADMA who is eligible for a free or reduced price meal if at least 24 percent but less than 36 percent of the pupils reported in the school district's ADMA in the determination year are eligible for the free or reduced price meal program; or

(4)  An additional $2,727.05 for each pupil in the ADMA who is eligible for a free or reduced price meal if at least 36 percent but less than 48 percent of the pupils reported in the school district's ADMA in the determination year are eligible for the free or reduced price meal program; or

(5)  An additional $3,636.06 for each pupil in the ADMA who is eligible for a free or reduced price meal if at least 48 percent of the pupils reported in the school district's ADMA in the determination year are eligible for the free or reduced price meal program; plus

(c)  An additional [$697.77] $711.40 for each pupil in the ADMA who is an English language learner; plus

(d)  An additional [$1,915.86] $1,956.09 for each pupil in the ADMA who is receiving special education services; plus

(e)  An additional [$697.77] $711.40 for each third grade pupil in the ADMA with a test score below the proficient level on the reading component of the state assessment administered pursuant to RSA 193-C:6, provided the pupil is not eligible to receive differentiated aid pursuant to subparagraphs (b)-(d).

3  New Section; Adequate Education; Fiscal Capacity Disparity Aid.  Amend RSA 198 by inserting after section 40-c the following new section:

198:40-cc  Fiscal Capacity Disparity Aid.  

I.  In addition to aid for the cost of the opportunity for an adequate education provided under RSA 198:40-a, each biennium the department shall calculate fiscal capacity disparity aid and provide that amount of aid in each year of the biennium to a municipality’s school districts and to charter schools approved under RSA 194-B:3-a as follows:

(a)  The department shall calculate the equalized valuation per pupil for each municipality in the state and shall sort the results from lowest to highest excluding municipalities with zero ADMA.

(b)  A municipality with an equalized valuation per pupil in the lowest 8 percent, rounded down to the nearest whole number, of municipalities sorted, and which has a median family income which is less than the state average median family income, shall receive fiscal capacity disparity aid in the amount of $2,000 multiplied by the municipality’s ADMA.

(c)  A municipality with an equalized valuation per pupil in the next lowest 4 percent, rounded down to the nearest whole number, of municipalities sorted, and which has a median family income which is less than the state average median family income, shall receive fiscal capacity disparity aid in the amount of $1,000 multiplied by the municipality’s ADMA.

II.  Except as otherwise provided in this section, fiscal capacity disparity aid shall be distributed pursuant to RSA 198:42.

III.  In this section:

(a)  “Equalized valuation per pupil” means a municipality’s equalized valuation, including properties subject to taxation under RSA 82 and RSA 83-F, as determined by the department of revenue administration, that was the basis for the local tax assessment in the determination year, divided by the school district’s kindergarten through grade 12 ADMA.

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

4  Adequate Education; Determination of Grants.  Amend RSA 198:41, IV(d) to read as follows:

(d)(1)  For fiscal year 2017 [and each fiscal year thereafter], the department of education shall distribute a total education grant to each municipality in an amount equal to the total education grant for the fiscal year in which the grant is calculated plus a percentage of the municipality's fiscal year 2012 stabilization grant, if any, distributed to the municipality; the percentage shall be 96 percent for fiscal year 2017[, and shall be reduced by 4 percent of the amount of the 2012 education grant for each fiscal year thereafter].

(2)  For fiscal year 2018, the department of education shall identify all municipalities in which the fiscal year 2018 total education grant plus any fiscal disparity aid scheduled for receipt by the municipality pursuant to RSA 198:40-cc will be less than the municipality’s fiscal year 2017 total education grant including the municipality’s fiscal year 2017 stabilization grant, if any.  The department shall distribute a stabilization grant for fiscal year 2018 to each of those municipalities equal to 100 percent of the decrease.

(3)  For fiscal year 2019, and each fiscal year thereafter, the department of education shall distribute a total education grant to each municipality in an amount equal to the total education grant for the fiscal year in which the grant is calculated including any fiscal disparity aid scheduled for receipt by the municipality pursuant to RSA 198:40-cc, plus a percentage of the municipality's fiscal year 2018 stabilization grant, if any, distributed to the municipality.  The percentage shall be 96 percent for fiscal year 2019, and shall be reduced by 4 percent of the amount of the 2018 stabilization grant for each fiscal year thereafter.

(4)  No stabilization grant shall be distributed to any municipality for any fiscal year in which the municipality's education property tax revenue collected pursuant to RSA 76 exceeds the total cost of an adequate education or to any municipality for any fiscal year in which the municipality's ADMA is zero.

5  Effective Date.  This act shall take effect July 1, 2017.

 

LBAO

17-0738

Revised 1/27/17

 

HB 597-FN-LOCAL- FISCAL NOTE

as introduced

 

AN ACT relative to calculating the cost of an opportunity for an adequate education and providing fiscal capacity disparity aid.

 

FISCAL IMPACT:      [ X ] State              [    ] County               [ X ] Local              [    ] None

 

 

 

Estimated Increase / (Decrease)

STATE:

FY 2018

FY 2019

FY 2020

FY 2021

   Appropriation

$0

$0

$0

$0

   Revenue

$0

$0

$0

$0

   Expenditures

$4,801,965

Indeterminable

Indeterminable

Indeterminable

Funding Source:

  [    ] General            [ X ] Education            [    ] Highway           [    ] Other

 

 

 

 

 

LOCAL:

 

 

 

 

   Revenue

$4,672,622

Indeterminable

Indeterminable

Indeterminable

   Expenditures

$0

$0

$0

$0

 

METHODOLOGY:

This bill amends the education grant formula by applying the consumer price index (CPI) adjustments required for the per pupil aid amount and differentiated aid components (except for the free and reduced price meal component, which is significantly changed by this bill), adds fiscal capacity disparity aid, and amends the stabilization grant component of the total grant, all beginning in FY 2018 and further explained below:

 

CPI Adjustments

This bill updates in statute the per pupil aid amount, as well as the aid amounts for english language learner, special education, and not proficient in 3rd grade reading differentiated aid components.  Current law sets the rates effective in FY 2015 with the Department of Education applying a CPI adjustment biennially.  This bill simply amends the statute to the Department’s already published CPI adjusted figures for the biennium beginning July 1, 2017, which results in no fiscal impact.

 

Free and Reduced Price Meal Program Differentiated Aid

Currently, all municipalities receive the same additional aid amount for each pupil that is eligible for a free or reduced price meal.  This bill amends this aid component to be a tiered amount based upon the school district’s (assumed to have meant municipality’s) number of eligible pupils as a percent of its total number of pupils.  See table below for specific aid amounts by tier.

 

Fiscal Capacity Disparity Aid

This bill estabilishes fiscal capacity disparity, which will provide additional funding to qualifying municipalities.  Under this bill the Department of Education will calculate the equalized valuation per pupil in each municipality and each municipality in the lowest eight percent will receive an additional $2,000 per pupil and each municipality in the next lowest four percent will receive an additional $1,000 per pupil.

 

Stabilization Grant

This bill redetermines the stabilization grant component of the total education grant.  Currently, all municipalities that originally qualified for a stablization grant in 2012 will receive 92% of the original amount in FY 2018, with the amount reducing by an additional 4% each subsequent year. Under this bill, a stabilization grant will only go to municipalities that receive less funding under the new formula in FY 2018 than it received in FY 2017.  The stabilization grant will be the amount of the difference and will be reduced annually by four percent beginning in FY 2019.  This bill makes no change to the provision that no municipality shall receive a stabilization grant in any year it raises more in its statewide education property tax than its calculated cost of an adequate education or if it has zero pupils.

 

Charter Public Schools

Charter public schools also receive funding as described in RSA 198:40-a (base pupil aid plus differentiated aid).  This bill will only impact charter schools to the extent they have pupils eligible for free and reduced meal price plans.  This bill modifies the free and reduced meal plan component to be based on a percent of the school district’s (assumed to have meant municipality’s) ADM.  In place of school district (or municipality), this fiscal note uses each charter school’s ADM to determine the proposed free and reduced meal price plan differentiated aid.

 

Assumptions

The data used for the fiscal analysis below assumes FY 2018 preliminary estimate data and the following assumptions:

  • For the free and redcued meal price plan, while the bill state’s “pupils reported in the school district’s” ADM, it is assumed it was meant to be municipality’s ADM.
  • Charter school ADM used in place of school district’s (meant to be municipality’s) ADM for the purpose of calculating free and reduced meal price plan differentiated aid.

 

Change Summary

The table below summarizes this bill’s changes to the education funding formula components:

 

FY 2018

CURRENT LAW

PROPOSED

Per Pupil Aid Categories

 

 

Base Amount

$3,636.06

$3,636.06

Differentiated Aid

 

 

   English Language Learner

$711.40

$711.40

   Special Education

$1,956.09

$1,956.09

   Grade 3 Reading Non-Proficient

$711.40

$711.40

   Free and Reduced Meal Program

$1,818.02

N/A

     F&R ADM Less Than 12% of Total ADM

N/A

$454.51

     F&R ADM Between 12-24% of Total ADM

N/A

$909.02

     F&R ADM Between 24-36% of Total ADM

N/A

$1,818.03

     F&R ADM Between 36-48% of Total ADM

N/A

$2,727.05

     F&R ADM Greater than 48% of Total ADM

N/A

$3,636.06

 

 

 

Fiscal Capacity Disparity Aid

 

 

For Municipalities with an Equalized Valuation Per Pupil in the Lowest 8% of all Municipalities

N/A

$2,000
Per Pupil

For Municipalities with an Equalized Valuation Per Pupil between 8% - 12% of all Municipalities

N/A

$1,000
Per Pupil

 

 

 

Stabilization Grant

 

 

If Currently Receiving "2012 Stabilization Grant"

FY 2018: 92% of Original Amount
FY 2019: 88%
FY 2020: 84%
FY 2021: 80%

N/A

If Calculated Grant for FY 2018 is Less Than Grant Received in FY 2017

N/A

FY 2018: Difference Between FY 2017 Actual Grant and FY 2018 Calculated Grant
FY 2019: 96% of FY 2018 Stabilization Grant Amount
FY 2020: 92%
FY 2021: 88%

 

Fiscal Impact Summary

FY 2018

 

CURRENT

PROPOSED

DIFFERENCE

Traditional Public Schools

 

 

 

Preliminary Grant (Cost of Adequacy, Less SWEPT)

$417,971,027

$447,047,020

$29,075,993

Fiscal Capacity Disparity Aid

$0

$27,802,890

$27,802,890

Stabilization Grant

$144,517,792

$92,440,875

($52,076,917)

Total Grants to Municipalities

$562,488,820

$567,290,785

$4,801,965

 

 

 

 

Charter Public Schools - F&R Diff. Aid

$774,004

$644,661

($129,343)

 

 

 

 

FY 2018 TOTAL   

$4,672,622

 

This bill's fiscal impact for FY 2019 and each year thereafter is indeterminable as data is not yet available.

 

AGENCIES CONTACTED:

Department of Education

 

 

Links

HB597 at GenCourtMobile

Action Dates

Date Body Type
Jan. 31, 2017 House Hearing
Feb. 7, 2017 House Exec Session
Feb. 15, 2017 House Floor Vote

Bill Text Revisions

HB597 Revision: 6 Date: Jan. 30, 2017, 9:43 a.m.

Docket

Date Status
Jan. 5, 2017 Introduced 01/05/2017 and referred to Education HJ 3 P. 20
Jan. 31, 2017 Public Hearing: 01/31/2017 01:00 PM LOB 207
Feb. 7, 2017 Executive Session: 02/07/2017 01:00 PM LOB 207
Feb. 15, 2017 Majority Committee Report: Inexpedient to Legislate for 02/15/2017 (Vote 11-7; RC) HC 11 P. 18
Minority Committee Report: Ought to Pass with Amendment # 2017-0080h [^]
Feb. 15, 2017 Inexpedient to Legislate: MA RC 186-165 02/15/2017 HJ 7 P. 26