HB 1674-FN-LOCAL – AS INTRODUCED
2010 SESSION
04/09
HOUSE BILL 1674-FN-LOCAL
AN ACT relative to the calculation of total education grants to municipalities and the calculation of excess education tax payments.
SPONSORS: Rep. W. Smith, Rock 18; Rep. Borden, Rock 18
This bill permanently extends the provisions governing the amounts distributed as total education grants to municipalities by removing the July 1, 2011 repeal date. The bill also permanently extends the use of a prior version of the education funding law for the purpose of calculating excess education tax payments.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
10-2106
04/09
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Ten
AN ACT relative to the calculation of total education grants to municipalities and the calculation of excess education tax payments.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Determination of Grants and Excess Tax. Amend RSA 198:41, III to read as follows:
III. For the fiscal [years] year beginning July 1, 2009 and [July 1, 2010] every fiscal year thereafter, the department of education shall not:
(a) Distribute a total education grant on behalf of all pupils who reside in a municipality that exceeds that municipality’s total education grant for the 2009 fiscal year by more than 15 percent; or
(b) Reduce the total state aid for an adequate education provided on behalf of all pupils who reside in a municipality to an amount less than that municipality’s total state aid for an adequate education received in the 2009 fiscal year.
2 Excess Education Tax Payment. Amend RSA 198:46, I to read as follows:
I. A municipality in which education [property] tax revenue collected exceeds the amount necessary to fund the cost of an adequate education in a fiscal year, as determined in RSA 198:40-a, shall collect and remit such excess to the department of revenue administration on or before March 15 of the tax year in which the excess occurs. [For fiscal years 2010 and 2011] Beginning July 1, 2009 and every fiscal year thereafter, the version of RSA 198:41, II effective for the fiscal year ending June 30, 2009 shall be used to determine excess.
3 Effective Date Amended. Amend 2008, 173:18, II to read as follows:
II. Section 8 [and paragraph III of section 17] of this act shall take effect July 1, 2011.
4 Repeal. 2008, 173:17, III, relative to the repeal of the limits on total education grants distributed to municipalities, is repealed.
5 Effective Date. This act shall take effect July 1, 2010.
LBAO
10-2106
Revised 12/28/09
HB 1674 FISCAL NOTE
AN ACT relative to the calculation of total education grants to municipalities and the calculation of excess education tax payments.
FISCAL IMPACT:
The Department of Education states this bill will decrease state education trust fund expenditures and local revenue by $69,242,978 in FY 2012 and each fiscal year thereafter. There will be no fiscal impact on county and local expenditures or state and county revenue.
METHODOLOGY:
The Department of Education made the following assumptions when calculating the FY 2012 / FY 2013 cost of an opportunity for an adequate education (RSA 198:40-a), fiscal capacity disparity aid (RSA 198:40-c), and municipal grants and excess statewide education property taxes (RSA 198:41 and RSA 198:46):
• Average daily membership (ADM) is calculated based on 2008-2009 school year (FY 2009) end-of-year data provided by each school district. Data are preliminary but provide the best estimate of anticipated finalized data for FY 2009.
• Special education (SPED) status is determined based upon FY 2009 end-of-year and special education submissions to the Initiative for School Empowerment and Excellence (i4see) data system.
• English language learner (ELL) status is determined based upon the fall 2008 data collection. All students receiving services are included.
• Free or reduced-price meal (F&R) eligibility status is determined based upon the fall 2008 data collection. All students receiving free milk, reduced meals, or free meals and in a school on October 1 are included.
• ADM for SPED, ELL, and F&R include all ADM for students identified in any of these categories as students move from school to school.
• FY 2009 school F&R concentrations are based upon student ADM for F&R students, excluding kindergarten students.
• To calculate fiscal capacity disparity aid, the Department utilized 4/1/2008 equalized valuation including utilities as provided by the NH Department of Revenue Administration.
• To calculate fiscal capacity disparity aid, the Department assumed the 1999 median family income data published by the US Census Bureau will still be the most current town-level data as of November 2010, when the FY 2012 / FY 2013 calculation must be published, although the data may be updated by then.
• To calculate municipal grants and excess statewide education property taxes, the Department assumed the statewide education property tax warrant in FY 2012 and FY 2013 will be identical to the FY 2011 warrant. The 4/1/09 equalized valuation not including utilities, which will be used to calculate the FY 2012 warrant, and the 4/1/10 equalized valuation not including utilities, which will be used to calculate the FY 2013 warrant, are not available at this time. The 4/1/08 equalized valuation not including utilities is the most currently available at this time, and is therefore used to estimate the FY 2012 and FY 2013 warrant. The statewide education property tax is estimated to raise a total of $363,594,112 in FY 2012 and FY 2013.
• The consumer price index (CPI) adjustment required by RSA 198:40-d will be 2.7% for the FY 2012 / FY 2013 biennium. The adjustment is a three-year average (2007-2009) of the annual change in the Northeast Urban Services Less Medical Care Services CPI. Annual changes were 2.9% for 2007, 3.3% for 2008, and is estimated to be 2.0% for 2009, resulting in an average of 2.7%.
The Department calculated the following changes to the per pupil amounts contained in RSA 198:40-a based on the assumed 2.7% adjustment pursuant to RSA 198:40-d:
FY 2010/FY2011 FY 2012/FY2013
per pupil cost of providing
the opportunity for an
adequate education $3,450 $3,543
per eligible pupil,
school concentration
< 12% $431 $443
per pupil,
school concentration
>= 12%, < 24% $863 $886
per pupil,
school concentration
>= 24%, < 36% $1,725 $1,772
per pupil,
school concentration
>= 36%, < 48% $2,588 $2,658
per pupil,
school concentration
>= 48% $3,450 $3,543
per pupil, ELL $675 $693
per pupil, SPED $1,856 $1,906
The Department estimates the cost of an opportunity for an adequate education will be $942,111,427 for the FY 2012 / FY 2013 biennium, and further estimates fiscal capacity disparity aid will be $68,397,385 for the FY 2012 / FY 2013 biennium, for total education aid of $1,010,508,812 in both FY 2012 and FY 2013 under current law. This bill provides that for FY 2012 and each fiscal year thereafter, no municipality shall receive a total education grant that exceeds the FY 2009 education grant by 15%, and no municipality shall receive less total state aid than it received in FY 2009. This bill also provides that municipalities may retain all statewide education property taxes under certain circumstances in FY 2012 and each fiscal year thereafter, and the Department assumes all municipalities will retain all statewide education property taxes under this bill. The Department calculated state education grants and retained statewide education property taxes under both current law and this bill to determine the change in state expenditures and local revenue that would occur under this bill in both FY 2012 and FY 2013. The Department assumes the annual fiscal impact of this bill as calculated for the FY 2012 / FY 2013 biennium will continue annually thereafter. However, the cost of an opportunity for an adequate education, fiscal capacity disparity aid, and the statewide education property tax warrant will be calculated with updated data in future biennium, so the actual fiscal impact will vary.
Estimated State Expenditures / Local Revenue – Current Law
State Property Tax
Retained by Town $347,863,092
Education Grant $662,645,720
Total $1,010,508,812
Estimated State Expenditures / Local Revenue – This Bill
State Property Tax
Retained by Town $363,594,112
Education Grant $577,671,722
Total $941,265,834
Change ($69,242,978)