HB 1259

AN ACT relative to the base cost for calculating adequate education grants.

SPONSORS: Rep. Hess, Merr 11; Rep. Ward, Graf 1; Rep. Kurk, Hills 5

This bill provides that for the biennium beginning July 1, 2003, and every biennium thereafter, the calculation of the statewide cost of an adequate education shall be indexed to the northeast regional consumer price index for all urban consumers in the year of calculation.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

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

1 School Money; Determination of Per Pupil Adequate Education Cost. RSA 198:40, I is repealed and reenacted to read as follows:

I. For the biennium beginning July 1, 2003, and every biennium thereafter, the department of education shall calculate the base cost per pupil by adding to the base cost per pupil of the immediately preceding biennium a percentage increase for inflation. The percentage shall be twice the average annual rate of inflation for the 4 calendar years immediately preceding the calendar year in which the new base cost is determined. Inflation shall be measured by the most recent available northeast region consumer price index for all urban consumers as published by the Bureau of Labor Statistics, United States Department of Labor.

2 School Money; State Aid for Educational Adequacy; Definitions. Amend RSA 198:38, VI to read as follows:

VI. "[~~Average~~] Base cost per pupil of an elementary school pupil' means the amount as determined in accordance with RSA 198:40.

3 School Money; Determination of Per Pupil Adequate Education Cost. Amend RSA 198:40, III to read as follows:

III. For each fiscal year, the statewide cost of an adequate education for all pupils shall be calculated by multiplying the [~~average~~] base cost per pupil [~~cost of an adequate education~~] by the statewide weighted average daily membership in residence of pupils and then adding 70 percent of total statewide transportation costs.

4 School Money; Determination of Adequate Education Grants. Amend RSA 198:41, I (a) to read as follows:

(a) Multiply the [~~average~~] base cost per pupil of an elementary pupil by the weighted average daily membership in residence for the municipality;

5 Repeal. RSA 198:38, V, relative to the base expenditure per pupil, is repealed.

The Department of Education indicates this bill, as amended by the House, (House Amendment #2002-2469h) will decrease state restricted expenditures and local revenue by $29,461,927 in FY 2003, $29,754,789 in FY 2005 and $106,358,342 in FY 2006. There will be no fiscal impact on state and county revenue or county and local expenditures.

The Department states this bill establishes an alternative formula for determining the cost of an adequate education. This bill requires one of the components of the cost of an adequate education, the base cost, to be calculated by adding a percentage increase for inflation to the prior biennium's base cost, The percentage used in the formula will be twice the average percent change in the consumer price index for the last four years. The result is a base cost that is lower than the base cost estimated under the current formula, $3,470 versus $3,583 for FY 2004 and FY 2005 and $3,685 versus $4,085 for FY 2006. When used in the total calculation, the alternative results in a decrease of state expenditures from the education trust fund and a decrease in the amount of revenue received by local school districts.