Make the state moratorium on school building aid permanent
The New Hampshire Union Leader originally published this column on April 12, 2013:
Let’s make a deal. You can stop paying for renovations to my kid’s elementary school in Dover – which you are paying for, thanks – if we can both stop paying for new schools in Bedford, Exeter, Concord and more than 100 other communities we don’t live in. Deal?
New Hampshire’s broken system of paying for building and renovating schools by redistributing wealth means we all pay for the bricks, mortar and athletic fields of each other’s schools. Some towns, including many affluent ones, make out like bandits. Others get nothing. Most towns are in between. There’s nothing equitable about it.
School building aid is about good intentions, a little politics and incentives gone awry. Because the state values having public schools, since the 1950s state government has subsidized school construction and renovation. In recent decades the state paid between 30 and 60 percent of construction costs.
If you subsidize something, you get more of it: more than the market would otherwise demand. The promise of “free” state money for more school capacity prompted a building boom as communities built more, bigger and fancier schools, and broke ground years sooner than they might have if the entire cost fell upon the neighbors. The subsidies weren’t limited to classrooms. Elementary school playgrounds, football stadiums, auditoriums, superintendents’ offices: it’s been a trip to the buffet on an all-inclusive cruise. The carrots were in the wrong places and there were no sticks.
According to a 2011 report by the New Hampshire Center for Public Policy Studies, annual state spending on school construction increased from $19 million to $46 million from 2000-2011 despite declining statewide student enrollment.
With rising school construction spending crowding out other priorities, the budget in deficit during the recession, and the state committed to more than a half a billion dollars of future payments, in 2008 Gov. John Lynch convinced the then-Democratic majority Legislature to move school building aid off budget by bonding payments instead. From 2009-11, the state bonded $131 million – that is, we bonded the payment of bond payments – adding $188 million in debt service to future budgets. This includes $27.6 million in the next biennium. Bet Gov. Maggie Hassan, who voted for the scheme as a state senator, wishes she had that money for her budget now.
In 2009 the Legislature called “time out” with a moratorium on funding new school projects. Three new $20 million schools in Concord were among the last to get funded. When Republicans retook the Legislature, existing commitments – $47 million this year – were moved back into the general fund. Future aid was capped and new projects would compete on need. Poorly ranked projects might get nothing if demand exceeded supply.
Without the subsidy, school construction has nearly stopped. Most districts can’t float projects with so much uncertainty about future funding. Newmarket has given up trying to pass a bond while it contributes to neighboring Exeter’s glistening $50 million high school, 55-percent funded by out-of-district taxpayers. Salem and Claremont – yes, that Claremont – voted to self-fund projects this year, which shows it can happen.
While we’re taking this moratorium breather, four-years-old going on six, the Legislature should reconsider why the state is in the business of building local schools in the first place. Some believe that if the state is constitutionally required to fund schools, this includes capital costs, though a formula that gives some towns 30 percent and others twice as much seems ripe for a court challenge. Everyone wants to target state resources to poorer communities, but most of the money has gone to growing, affluent communities such as Bow, Windham and Bedford.
Many will say ending school building aid downshifts costs to local property taxpayers. Well, yes, but it also ends the practice of taxpayers footing the bill for school projects in other towns they didn’t vote on. If we want to give poorer communities extra help with capital costs, not just operational ones, that can be accomplished through competitive adequacy grants.
The best public finance decisions are made when neighbors ask each other whether they are willing to tax themselves for something they will use. Let’s restore this part of school funding to local decision-making.
Fergus Cullen, a freelance columnist, can be reached at email@example.com.