The New Hampshire Department of Education (DoE) recently published its first formal estimates of the adequate education grants cities and towns will receive in Fiscal Year 2023. Those estimates confirm that state education aid in FY 2023 will remain below its FY 2021 level for another year. While this further decline in state education aid is due in large part to choices state lawmakers made in crafting New Hampshire’s current budget, DoE’s latest estimates underscore a much larger, longer-term problem. In providing only about $4,700 per pupil in education aid, when it costs school districts several times that amount to serve the children in their community, the State of New Hampshire continues to downshift its responsibility to pay for an adequate education to municipalities, creating an inequitable and unlevel playing field.

Total education grants for FY 2021 amounted to approximately $1.01 billion. (This total, like all figures presented here, includes funds derived from the statewide property tax, or SWEPT, and excludes aid to unincorporated places.) In FY 2022, based on April 2021 DoE data, that figure is expected to drop to $987.9 million. In FY 2023, such grants are now projected to fall to $954.4 million in the aggregate, a decline of nearly 6 percent since FY21.

Despite these overall declines, as the table below details, some municipalities will see increases in state aid in FY23 . For instance, New Castle is projected to see its total education grant climb from $1.41 million in FY21 to $1.46 million in FY22 to $1.58 million in FY23. Nevertheless, the vast majority of cities and towns will experience declines in the coming year. That is, 192 cities and towns – or 78 percent of all municipalities – are expected to receive a smaller total education grant in FY23 than they did in FY22, while 167 cities and towns should anticipate receiving a smaller total education grant in FY23 than they did in FY21.

A number of factors have likely contributed to this trend, including changes in the number and the characteristics of students attending public schools in New Hampshire. Such changes stem, in part from the COVID-10 pandemic; importantly, while budget writers did take steps to mitigate the impact of the pandemic on state education aid in FY22, those steps were not nearly as extensive in FY23. What’s more, the creation of so-called “education freedom accounts,” or vouchers, has also driven down the number of students attending public schools in New Hampshire.

Still, the single largest source of the drops described above is likely the decision by the legislature to allow one form of education aid – known as “fiscal capacity disparity aid” and intended to help comparatively property-poor communities – expire at the end of FY21. That form of aid had delivered over $47 million to cities and towns with especially low property values. Of the 85 communities that will receive lower state education aid in FY 2022 and FY 2023 than they did in FY 2021, 74 – or 87 percent – had previously received fiscal capacity disparity aid. Of course, as important as these short term developments may be for schools’ ability to serve the children of New Hampshire, they should not obscure the much larger truth. While state legislators have made multiple changes to New Hampshire’s education aid formula in recent years – for better and for worse – they have failed to enact the kind of comprehensive reform that will enable the Granite State to finally fulfill its responsibility to provide – and to pay for – an adequate education for all of its children.