1 Junkins Ave., Portsmouth, NH, 03801, Tel: (603) 610-7281Fax: (603) 427-1575 Email: Coalition@ch.cityofportsmouth.com

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NH Needs New Education Funding Goals

Dec. 23, 2003

A noted New Hampshire economist contends the State should end its "misguided" focus on per-pupil property values and tax equity, and instead design a school finance system with a primary objective of improving the quality of education for those who need it most, the Coalition Communities said Tuesday.

Writing in the prestigious "State Tax Notes" publication, Dr. Daphne Kenyon recently called the New Hampshire school funding situation "a case study of the pernicious results of focusing on the goal of tax equity and on per-pupil property values."

Kenyon, the former director of the Josiah Bartlett Center who has been a key representative of the Coalition Communities' effort to solve the education funding problem, also studied current literature and other states in reaching her conclusion that "tax equity alone is the wrong goal when designing school finance systems."

Although the Legislature recently adopted a new school funding plan, it relies on the same faulty underlying assumptions exacerbated by the continuance of the statewide property tax, although at a significantly lower rate for the next fiscal year.

The 34-member Coalition Communities group is sending copies of the Kenyon article to each member of the Legislature and urging lawmakers to consider bringing back the Coalition's plan - House Bill 717 - when the legislative session reconvenes in January. The Coalition supports a full targeted aid plan that relies on funding other than the statewide property tax and gets money to where it is needed most.

"The main objective of school finance systems should be to improve the quality of education who need it most. Aiming at tax equity will not do an effective job of channeling resources to improve the quality of education for the most needy children," Kenyon wrote.

She said those who do not support the tax equity goal often focus on property value per-pupil and so called disparities in per-pupil property values, which she called "misguided and the assumption that per-pupil property values indicate whether a community is rich or poor is inaccurate."

"The assumption that equates school districts that have low property value per pupil with needy school districts is a dangerous one because of the very low correlation between a community's median household income and its property value per pupil," she said. "Many low-income families live in property-rich districts and many high-income families live in property-poor districts."

One of the primary ways that low-income communities can become relatively rich is by accepting locally undesirable land uses in order to increase their property tax revenues.

"Keep in mind that hosting power plants, landfills and industrial and commercial development provides a service to citizens in the rest of the state, who need these land uses while preferring them far enough away," she writes.

"Is it fair to reduce the state aid to the communities that have lowered their tax rates in this way?"

To see a copy of the Kenyon piece, click here:


 1 Junkins Ave., Portsmouth, NH, 03801, Tel: (603) 610-7281Fax: (603) 427-1575 Email: Coalition@ch.cityofportsmouth.com