CONCORD, N.H. — Wide variations in school spending and local tax rates persist in New Hampshire two decades after a landmark court ruling, and things are only going to get worse for rural, property-poor communities, according to a report released Tuesday.

A series of state Supreme Court decisions in the 1990s held that the state has a duty to provide and pay for an adequate education, with one key ruling in 1997 finding the state’s reliance on local property taxes for most school funding unconstitutional. The rulings came after Claremont and four towns sued the state in 1991.

One goal of the lawsuit was to force the state to provide a more equal education for students regardless of where they live, and the plaintiffs cited differences in per-pupil spending among communities to make their case. But in the new report, the New Hampshire Center for Public Policy Studies found there still is more than a two-fold difference between communities that spend the most per pupil and those that spend the least, and the variation in rates for local property taxes is even greater.

Two graphs plotting how each town’s spending or tax rates compared to the state median in 1998-99 and 2015-16 show virtually no change.

“There’s not significant movement, which suggests that the inequity in spending from the late ’90s remains today,” said economist Greg Bird, one of the report’s authors.

In response to the court ruling, the Legislature provides a set amount — currently $3,561 —of financial aid per pupil, plus extra for students who meet other criteria, such as being economically disadvantaged or having special education needs. Some communities also get “stabilization grants” to protect communities that could lose state aid because of declines in enrollment or other demographic changes, but those grants are now being reduced by 4 percent per year.

The center projected what will happen if the current system remains in place as the number of school-age children continues to decrease and found that the total amount of state aid provided would decline by almost 6 percent by fiscal year 2022. Of 234 cities and towns, 41 percent would see an increase in state aid per student, 44 percent would see a decline and 15 percent would see no change.

The hardest-hit towns tend to be those that rely on stabilization grants for 40 to 50 percent of their total state adequacy funding and are in rural areas, said Steve Norton, the center’s director and co-author of the report.

“It was striking to us just how much large swaths of New Hampshire are going to find themselves in education no-man’s land as enrollment declines and these demographic and economic forces play out,” he said.

He questioned whether weaning those towns off the stabilization grant funding makes sense given the demographic changes. There are no simple answers, he said, but lawmakers should be asking themselves that question instead of “reshuffling deck chairs.”

“We haven’t had the conversation about the way we fund adequacy while knowing that we’re going to see continued declines in enrollment. This system was developed in a time period where we were still growing,” he said. “It’s a new period, a new demographic reality, and I’m not sure that thinking has been baked into the existing structure.”

A bill passed by the Legislature this session requires lawmakers to review the education adequacy system and make recommendations by November. At the same time, some communities have begun raising concerns about the system, prompting speculation that another lawsuit could be coming.


This story has been corrected to show that one of the report’s authors is Greg Bird, not Steve Bird.