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Jessie
Levine
Town Manager
New London, NH
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September
2, 2010
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The New London Board of
Selectmen will hold a public hearing Tuesday, September 7, 6:00 PM, in the
Sydney L. Crook Conference Room, 2nd floor of the New London Town Offices
to receive comments on a citizen petition to lower the speed limit on
Newport Road from 50 to 40 MPH between South Cove Road and Old Route 11.
As Senator Bob Odell has
referenced in some of his columns, statewide funding for adequate
education continues to be on the minds of legislators in Concord and
taxpayers in the property-rich towns that, as of July 1, 2011, will once
again contribute more through property taxes for statewide education than
they will receive for local education funding. As we approach election
season, it is important for voters to speak to their candidates about the
impact that statewide education funding could have on New London
taxpayers.
The following is largely lifted from an editorial written by Pat Remick,
an employee of the City of Portsmouth whose role in large part is to work
with New London and the coalition of 35 communities who are so-called
“donor towns” (though I detest that term) to lobby the Legislature to
create a more equitable means of assessing and collecting property tax for
statewide educating funding. If I should share my byline with Pat for this
article, I would do so.
Unless the Legislature is compelled to change existing state law, the
taxpayers of New London will have to send an estimated $1,014,778 to the
State (although the law is effective July 1, 2011, the additional funds
will be collected in the November 2011 tax bill). This represents
over $1.00 on the New London tax rate, or $100 for every $100,000 in
assessed value. Without legislative action, the property tax bill
for the median valued home in New London could increase by over $300 per
year. The current formula calculated by state law will result in
these tax dollars being sent to other New Hampshire communities, including
some with higher median household incomes.
New London is not alone in facing major budgeting challenges due to the
coming changes in the State's education funding formula. About half of
NH's cities and towns (120) will see decreases in State aid under the
formula that also will cost at least an additional $70 million (and
possibly as much as $150 million or more if the federal stimulus money
used this year to plug the education funding budget hole is not renewed).
Almost one-third of the communities face cuts of $100,000 or more. In
fact, as New London and the 34 other donor towns (including Newbury) send
an additional $15 million to Concord, the State's two largest
communities – Nashua and Manchester – stand to receive an additional
$42 million between them. The balance of the additional funds for the
larger communities will be paid by reducing the aid to smaller
communities, such as those in our own school district. Aid to
Bradford and Warner will be reduced by over $75,000 each, and aid to
Wilmot and Springfield will be reduced by almost $30,000 between them.
Only Sutton stands to receive $138,000 more aid than in previous
years. As aid to other communities in our school district is
reduced, New London's portion of the local school budget will be
increased to make up the balance. And you thought there was no such
thing as double jeopardy.
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This return of “donor
towns” brings us back to the period from 1999-2005, when New London
taxpayers sent $8,210,469 to Concord for redistribution to other
municipalities. The schoolchildren of New London received no direct
benefit from this $8.2 million.
By way of background, NH law
requires that $363.5 million be raised annually from the Statewide
Education Property Tax (SWEPT) to go toward the State's share of funding
education. The remainder comes from the general fund (lottery profits,
real estate transfer tax, etc.). The State establishes a tax rate to raise
the $363.5 million, which was $2.19 in fiscal year 2011 (which began July
1, 2010). If a community with high property values, like New London,
raises more under the SWEPT (our total assessed value multiplied by the
tax rate) than what the State determines is its cost of an adequate
education for our children, then the community has raised “excess”
SWEPT. That excess is redistributed to communities whose education
costs are not covered by what they raised under SWEPT (their total
assessed value multiplied by the same tax rate).
According to the education funding formula, it costs $1,669,453 to provide
what the State defines as an “adequate” education for New London
students in the current fiscal year. However, because of high property
values, New London can raise $2,663,720 under the SWEPT. Until July
1, 2011, a “transition formula” was in place that said that if New
London raised more than its FY09 cost of “adequacy” plus what it
raised under the SWEPT that year – a total of $2,597,855 – it could
keep the $65,865 “excess” if it was spent on local education.
As of July 1, 2011, two major changes will occur: 1) the end of the
transition period means the formula will compare the cost of adequacy
strictly to the amount raised under the SWEPT; and 2) any local
option disappears and New London will have to send its $1.014 million in
“excess” to Concord.
It is interesting to note that the Kearsarge Regional School District
spent $13,601.07 per schoolchild in 2008-2009 (the latest year for which
statewide data are available), but the State's “adequacy formula”
only allocates a base per-pupil amount of $3,450 per pupil. While certain
school and individual factors may increase the amount, it is clear that
the State's cost of “adequacy” bears little relationship to the
actual price of education in New Hampshire.
The Coalition Communities -- New London and 34 other municipalities with
high property values -- have long supported a constitutional amendment to
allow the State to target aid only to the neediest communities. Nearly
every other U.S. state uses such a “foundation aid” method of
supplementing what the local community cannot raise, instead of the far
more expensive option of paying both the first and last dollar of
education adequacy.
The Coalition will continue to fight the return of “Donor” towns but
it is essential that the residents of New London and other communities
talk to their candidates about this subject. More information on the
Coalition Communities and spreadsheets showing the impact as of July 1,
2011, go to: www.cityofportsmouth.com/coalition/facts.html.
Jessie Levine, Town
Administrator
375 Main Street
New London, NH 03257 townadmin@nl-nh.com
Phone: 603-526-4821 extension 13
Fax: 603-526-9494
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