How Would a State Imposed Budget Cap Affect Schools and Students?

The House Finance Committee included a State imposed budget cap on all school districts in its final State budget proposal. If adopted as part of the final budget, this cap will have devastating effects on school districts around the state, especially districts already being negatively impacted by New Hampshire’s school funding system. This cap will lock in the inequities that exist between property wealthy towns and communities with lower property values and will have negative impacts on student experiences and the opportunities available to them. Granite Staters have shown they do not want these caps, but the State is trying to force them upon us anyways to strip away local control. Read more below on how this bill came to be, and how it will hurt students across the state.

Background

Under a new state law, 2025 was the first year that voters could propose budget caps in their local school district, by collecting signatures to get it on the school district ballot and having the measure pass by a 3/5 majority. The first to be put to the voters was in the Kearsarge Regional School District, where voters rejected the measure 1,435 to 113.

Ultimately 8 districts, including Kearsarge, had caps proposed. And like in Kearsarge, voters in ConVal, Epping, Epsom, Haverhill, Hollis Brookline, Salem, and Weare all rejected the caps. The proposed caps did not receive even a simple majority of support in any district.

Two days after most of these districts voted to reject their caps, the House voted 190-185 to pass HB 675, which would impose caps on all districts in the state. Representatives who spoke in favor of the bill included Rep. Dan McGuire, who represents Epsom, which rejected its cap, and House Majority Leader Rep. Jason Osborne, who was quoted after the Kearsarge vote saying, “Perhaps, if [local voters] are unwilling to cap themselves, the state will step in and cap local taxes for them.”

After the House vote, the bill was referred to the Finance Committee, which stuffed it into the State Budget. Rep. Ken Weyler, Chairman of the Finance Committee, spoke in support of the bill by disparaging the people who vote for their local school budgets every year.

Impact on Students

The proposed school budget cap limits increases to no more than the 5-year rolling average of the Consumer Price Index through the 2026-27 school year. Starting with the 2027-28 school year, budgets are limited to either the 5-year average percentage change in student enrollment or the 5-year average appropriation, whichever is greater. Analysis from ReachingHigher NH shows that the budget caps “would actually reduce funding for most school districts, even before accounting for inflation, over the next five years.”

These limits would lead to a loss of opportunity for students. Necessary costs like special education services, transportation, and health insurance for district teachers and staff will continue to increase over time, accounting for bigger portions of the school budget every year. Over time, that pressure would force cuts to other programs, likely spelling the end of opportunities for students, including

Sports
AP Classes
Arts programs, including music and theatre
Technology
Career and Technical Education
Extracurriculars and clubs
Field trips

Additionally, a budget cap would negatively impact the ability of districts to recruit and retain teachers, and over time would lead to cutting teaching positions, creating larger class sizes for students.

Statewide Impact

On top of the negative effects felt by students, a state-imposed budget cap will lock in the inequalities that currently exist between school districts around the state. Districts in property wealthy communities that have been able to fund their schools at above average levels will be less affected by these caps. Districts in communities with below average property values will be at an even greater disadvantage than they already are.

The language incorporated into the budget only allows the cap to be overridden by a 2/3 vote, an even higher standard than the 3/5 currently required to issue bonds, and a very high bar that ensures the caps will rarely, if ever, be overridden. That means districts that are already behind will have an even harder time trying to catch up to their peers.

A State-imposed budget cap is not a solution to our school funding problems in New Hampshire. It would have negative effects on students, which is why caps were rejected in districts around the state. Additionally, it locks in property tax disparities at their current levels and would not reduce property taxes for anyone. The clearest path to actually providing tax relief to property owners around New Hampshire is by having the State take on its fair share of school funding.

News

How Would a State Imposed Budget Cap Affect Schools and Students?

Tell your State Reps to Remove this Cap from the Budget by April 10

Background

Impact on Students

Statewide Impact

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