HB734: relative to the annual percentage reduction in stabilization grants to school districts.

HB 734-FN-LOCAL - AS INTRODUCED

2019 SESSION

19-0629

06/03

HOUSE BILL 734-FN-LOCAL

AN ACT relative to the annual percentage reduction in stabilization grants to school districts.

SPONSORS: Rep. Abbott, Ches. 1; Rep. Berch, Ches. 1; Rep. Cloutier, Sull. 10; Rep. Harvey, Ches. 1; Rep. Horrigan, Straf. 6; Rep. Ames, Ches. 9; Sen. Kahn, Dist 10

COMMITTEE: Finance

ANALYSIS

This bill suspends the 4 percent annual reduction in stabilization grants for 2 years.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

19-0629

06/03

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Nineteen

AN ACT relative to the annual percentage reduction in stabilization grants to school districts.

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

1 Cost of Opportunity for an Adequate Education; Determination of Education Grants. Amend RSA 198:41, IV(d) to read as follows:

(d) For fiscal year 2017 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 a percentage of the municipality's fiscal year 2012 stabilization grant, if any, distributed to the municipality; the percentage shall be 96 percent for fiscal year 2017, and shall be reduced by 4 percent of the amount of the 2012 education grant for each fiscal year thereafter, except fiscal years 2020 and 2021 when the fiscal year 2019 reduction rate shall apply. No stabilization grant shall be distributed to any municipality for any fiscal year in which the municipality's education property tax revenue collected pursuant to RSA 76 exceeds the total cost of an adequate education or to any municipality for any fiscal year in which the municipality's ADMA is zero.

2 Effective Date. This act shall take effect July 1, 2019.

LBAO

19-0629

1/17/19

HB 734-FN-LOCAL- FISCAL NOTE

AS INTRODUCED

AN ACT relative to the annual percentage reduction in stabilization grants to school districts.

FISCAL IMPACT: [ X ] State [ ] County [ X ] Local [ ] None

Estimated Increase / (Decrease)

STATE:

FY 2020

FY 2021

FY 2022

FY 2023

Appropriation

$0

$0

$0

$0

Revenue

$0

$0

$0

$0

Expenditures

$6,339,018

$12,678,036

$12,678,036

$12,678,036

Funding Source:

[ ] General [ X ] Education [ ] Highway [ ] Other

LOCAL:

Revenue

$6,339,018

$12,678,036

$12,678,036

$12,678,036

Expenditures

$0

$0

$0

$0

METHODOLOGY:

This bill sets the amount of the stabilization grant portion of the total education grant to municipalities in FY 2020 and FY 2021 at the FY 2019 level. Under current law, each year the stabilization grant amount decreases by four percent of the original amount, or approximately $6.3 million statewide. This bill essentially eliminates the annual reduction for the upcoming biennium and the Department of Education assumes the four percent reduction would begin again in FY 2022. The impact of this bill on state education trust fund expenditures and local revenue is as follows:

STABILIZATION GRANT

Year

Current Law

Proposed

Increase

Stabilization %

Stabilization $

Stabilization %

Stabilization $

FY 2019

88%

$139,458,392

88%

No Change

No Change

FY 2020

84%

$133,119,374

88%

$139,458,392

$6,339,018

FY 2021

80%

$126,780,356

88%

$139,458,392

$12,678,036

FY 2022

76%

$120,441,338

84%

$133,119,374

$12,678,036

FY 2023

72%

$114,102,320

80%

$126,780,356

$12,678,036

AGENCIES CONTACTED:

Department of Education