HB 562-FN-LOCAL - AS INTRODUCED

2015 SESSION

15-0161

04/01

HOUSE BILL 562-FN-LOCAL

AN ACT repealing the limitation on the total education grant distributed to a municipality in a fiscal year and reducing the stabilization grants to certain municipalities.

SPONSORS: Rep. Bates, Rock 7; Rep. Lovejoy, Rock 36; Rep. Murotake, Hills 32; Rep. F. Rice, Rock 21; Rep. J. Belanger, Hills 27; Rep. Takesian, Hills 37; Rep. Hoell, Merr 23; Rep. Rollo, Straf 18; Rep. Bixby, Straf 17; Rep. Howard, Jr., Belk 8; Sen. Watters, Dist 4; Sen. Sanborn, Dist 9

COMMITTEE: Education

ANALYSIS

This bill changes the amount of a municipality's stabilization grant and the circumstances under which a municipality would receive a stabilization grant.  The also bill repeals the provision limiting the amount of the total education grant distributed to a municipality.  

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

15-0161

04/01

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Fifteen

AN ACT repealing the limitation on the total education grant distributed to a municipality in a fiscal year and reducing the stabilization grants to certain municipalities.

Be it Enacted by the Senate and House of Representatives in General Court convened:

1  Adequate Education; Determination of Grants.  Amend RSA 198:41, IV(c) to read as follows:

(c) For fiscal year 2014, and each fiscal year thereafter, the department of education shall distribute a total education grant to each municipality in an amount equal to the total education grant for the fiscal year in which the grant is calculated plus 95.4 percent of the amount of the fiscal year 2012 stabilization grant, if any, distributed to the municipality.  The stabilization grant of any municipality in which the ADMA decreases shall be reduced by an amount equal to the percentage of reduction in the municipality's ADMA.  No stabilization grant shall be distributed to any municipality for any fiscal year in which the municipality's education property tax revenues collected pursuant to RSA 76 exceed the total cost of an adequate education or to any municipality for any fiscal year in which the municipality's ADMA is zero.

2  Repeal.  RSA 198:41, III(b), relative to the maximum total education grant distributed to a municipality in a fiscal year, is repealed.

3  Applicability.  The department of education shall apply the provisions of this act beginning with the adequate education grant calculations for the 2016-2017 school year, and each school year thereafter.  

4  Effective Date.  This act shall take effect July 1, 2015.

LBAO

15-0161

01/23/15

HB 562-FN-LOCAL - FISCAL NOTE

AN ACT repealing the limitation on the total education grant distributed to a municipality in a fiscal year and reducing the stabilization grants to certain municipalities.

FISCAL IMPACT:

The Department of Education states this bill, as introduced, may decrease state education trust fund expenditures and local revenue by an indeterminable amount in FY 2017 and each year thereafter.  There will be no fiscal impact on county and local expenditures, or state and county revenue.

METHODOLOGY:

The Department of Education states this bill makes the following changes to the current adequacy statute –

1. Repeals the provision of RSA 198:41, III(b) which limits the total education grant distributed to a municipality in a fiscal year to 108% of their prior year grant;
2. Reduces the stabilization grant to 95.4% of the current total beginning with the 2016-2017 school year (FY 2017).  
3. Further reduces the stabilization grant in the event a municipality’s Average Daily Membership (ADM) in the calculation year is less than the ADM of the previous year, the reduction would equal the percentage of such decline;
4. Eliminates stabilization grants for municipalities whose Statewide Education Property Tax (SWEPT) exceeds the total calculated cost of an adequate education; and
5. Eliminates stabilization grants for municipalities for any fiscal year in which the municipality’s ADM is zero.

The Department states data from the current school year (2014-15) will not be finalized until October of 2015.  This data will be used to estimate the 2015-2016 school year ADM, which will be the basis for the FY 2017 adequate education grant calculations. Under current statute, the Department is required to release the FY 2017 calculations by November 15, 2015.  In addition, the Department will need to further adjust the FY 2017 estimates based on actual 2015-2016 school year data which will not be finalized until October 1, 2016.  

For discussion purposes only, using the FY 2016 available data, the Department estimates the changes in the proposed bill could reduce total adequate education grants from $568,578,076 to $568,542,453, a decrease of $36,000.  The exact fiscal impact cannot be determined at this time.