FILE - NH Donna Soucy, Steve Shurtleff, Chris Sununu 9-26-2019

New Hampshire legislative leaders, including Senate President Donna Soucy (second from left) and House Speaker Steve Shurtleff (third from left), along with other observers, look on Sept. 26, 2019, as Gov. Chris Sununu (seated) signs the state budget legislation.

The New Hampshire state budget signed into law last week includes a nearly $140 million increase in funding for schools.

“I give both parties and the governor credit for understanding what’s important for communities and taxpayers as well,” Carl Ladd, executive director of the New Hampshire School Administrators Association, told The Center Square. “They finally came up with a good short-term solution moving forward with an eye to the long term.”

In an email response to The Center Square, Phil Sletten, a policy analyst at the New Hampshire Fiscal Policy Institute, provided insights on the funding:

“Both the approximately $50 million in additional aid for cities and towns with relatively low amounts of taxable property wealth per student and the approximately $12.5 million in additional aid associated with free and reduced-price school meal-eligible students … are one-time sources of aid, occurring only in State Fiscal Year 2021.”

Over the biennium, “Another approximately $56.6 million will be provided through stabilization aid,” Sletten said. Roughly $25.2 million in 2020 and $31.4 million in 2021.

The news is encouraging to educators.

“To have stabilization put back is just a huge step for the Legislature and the school districts,” Ladd said. “Particularly for towns where it was becoming more difficult to provide services, those are lifelines for those districts.”

Sletten pointed out that adjustments to business taxes will help cover the cost.

“A portion of the revenue to pay for this additional education aid comes from surplus revenue collected by the State’s two primary business taxes over the last two years, which was generated primarily due to the impacts of multi-national businesses responding to the federal tax overhaul.”

He added that those revenues are likely one-time payments, while additional revenue policy changes will also factor, “including future business tax rates that are contingent on revenues, changes to the tax base for state business taxation, legalizing and collecting revenue from sports betting overseen by the State Lottery Commission, and expanding the Tobacco Tax to include electronic cigarettes and certain vaping products. These policy changes, as well as a transfer of revenue from the General Fund, will provide additional support to the Education Trust Fund in this State Budget.”

The $13 billion budget agreement ended a three-month impasse following Gov. Chris Sununu’s June 28 budget veto.

"Today's vote is obviously a huge win for New Hampshire families, New Hampshire businesses, everyone across the state," Sununu told reporters last week in a statement published by The Associated Press. "This budget returns a lot of funding back to cities and towns, something I think we all wanted to see, and provides historic investments in our education system."

It should provide relief to taxpayers, Ladd said. “The Legislature as a whole, both Democrats and Republicans, have been hearing from their constituents about their local property tax rates, which have gone through roof in the last seven or eight years.”

He added, ”This is a first step in a much longer process about how we’re going to fund education equitably, to make sure that all kids, regardless of their ZIP codes, get the same opportunities as other kids,” Ladd said, adding that the ConVal school district litigation currently in court also seeks to address that issue.

“This was a great first step, but it was just a first step,” Ladd said.