It’s hard to restrain education spending when increases are ‘cuts’

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K-12 public school spending rises every year, whether enrollment increases or decreases. In this century, K-12 district public school enrollment in New Hampshire has fallen by more than 50,000 students, but spending is up by more than $1 billion, adjusted for inflation. 

How does this happen? The short answer is that local voters prefer to spend more on public schools, regardless of enrollment trends, tax rates or anything else. Contributing to these decisions, however, is an often overlooked annual ritual. 

Any and every measure of spending restraint, even those that increase school budgets but at a slower rate than proposed by a district administration, is portrayed as a “cut” that will devastate public education. It’s a rite of spring, and the media too often participate.

The current debate over Manchester’s school budget proposal offers a perfect example. 

The city school district has proposed a 2025-26 budget of $246 million, endorsed by the school board. Mayor Jay Ruais has proposed a budget of $236.5 million. 

School board members have attacked the mayor, saying his budget results in a “$9.5 million cut.” 

“If you actually cut the school district budget by $9.5 million, it’s going to be really painful,” one school board member said.

A resident who showed up at at a recent Board of Mayor and Aldermen meeting said the mayor’s proposal contained “cuts will have a yearslong negative impact on the quality of education and supports our students will receive.”

The Union Leader story that includes these quotes contains the word “cut” 10 times. The story itself describes the mayor’s proposal as a “reduction” in proposed spending. 

Nowhere does the story explain that the mayor’s proposal represents a $2 million increase in school district spending. 

Manchester’s enrollment is 11,851, according to its state district profile. The district projects an additional 14 students next year along with an additional $11.7 million in state adequate education aid.

It’s reasonable to ask why a total budget increase of $2 million to cover an increase of 14 students ($143,000 per student) would devastate the school system. But that conversation can’t happen amid all of the name calling and attacks. 

The school board vice chairman said the mayor’s budget could lead to class sizes of 30-35 students. But the district’s average class size is 20 now. How would a $2 million increase in spending cause a 50% increase in class sizes?

This question, among many others, goes unasked.  

The Boston Globe’s story leads with this sentence: “Some school officials are warning Manchester Mayor Jay Ruais’ proposed $9.5 million in cuts to the city’s school budget could lead to layoffs, the reduction of services, or even school closures.”

It’s a $2 million budget increase, not a $9.5 million cut. But that’s how the reporting goes.

To its credit, the Globe acknowledges three paragraphs later that Ruais’ budget increases city school spending. It even reports the growth of the city school budget since 2023, something most stories on school spending never do. But the inaccuracy of the lead sentence, which matches the narrative of the school board members, creates confusion and misunderstanding. 

Even when news stories correctly report that a budget increases spending, they can still confuse readers. A WMUR story this week reported that Nashua’s proposed school district budget represents a 3.5% spending increase. But in reporting on the claims that it would cause large reductions in teaching positions, the story adopted the rhetoric of opponents, using the phrase “the proposed budget cut.”

Over in the Jaffrey-Ringe Cooperative School District, voters last month approved a genuine cut to the school district budget, voting for a $3 million reduction from the current year’s spending. 

The school board chairman there followed the customary script of insulting and demeaning the voters, just as Manchester’s school board members insulted and attacked the mayor. It’s standard practice, and it’s effective.

Any level of spending that does not match or exceed a school district’s proposal is met with attacks, invective and predictions of devastating educational outcomes. All proposals that total less than the district’s proposal are labeled “cuts,” even if they increase spending over the current budget. 

The messaging is so good that it usually tricks the press into portraying spending increases as budget cuts. Amid all of the shouting, not even the media, which ought to be scrutinizing elected officials’ claims, questions the budget math or the use of the term “cut” to describe spending increases, even ones that will lead to tax increases. How would a spending cut cause a tax increase? No one ever asks.

Districts might have perfectly good reasons for increasing spending. Those reasons should be given to voters and elected officials as part of a discussion that balances the interests of students and taxpayers. Those kinds of conversations are where savings, efficiencies and improvements can be found. Getting more for less should be a permanent objective, not an annual fight. But it’s hard to get there when even spending increases are called “cuts” and the press just goes along with the narrative instead of asking hard questions about spending.

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Competition and the purpose of educational choice

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On Thursday, decades’ worth of aged, decrepit talking points died in the New Hampshire House. 

Opponents of parental choice in education say the purpose of creating such choice is to “defund,” “privatize,” or “destroy” public schools.

Public money should stay entirely in public schools, they say. 

This year, House Education Policy and Administration Chairman Glenn Cordelli called their bluff. His House Bill 741 creates statewide universal open enrollment for public schools. Students would be able to transfer to any public school, provided it has room. The student’s home district would even get to keep 20% of each transferring student’s per-pupil allotment of public education funds, leaving those districts with more money to spend on their remaining pupils. 

Here is a school choice program that keeps public school funding in public schools. In its debate, those old, reactionary attacks vanished like so many cremated remains scattered to the wind.

Were those attacks true—were the point of school choice really to destroy public schools—then every school choice supporter should’ve voted against this bill. 

As we highlighted in a policy brief published with the Reason Foundation this week, research from states with open enrollment statutes shows that they tend to improve outcomes for both students and public schools. Moreover, open enrollment keeps public school money entirely within the public school system while directly engaging parents to get involved in the system. 

Why would people who want to defund, privatize or destroy public schools vote for a program that would strengthen them?

School choice supporters voted for open enrollment for the simple reason that there’s never been any truth to the ad hominem attacks on them. The point of school choice isn’t to destroy public schools. It never has been. The point is to create a marketplace in which every student is matched with the education that best fits that student’s needs. 

As of January, 34 states, Puerto Rico and the District of Columbia have some form of school choice. In all, 75 choice programs enroll 1.2 million students nationwide, by EdChoice’s latest count. 

And yet public school spending is at record highs and no state or municipality has closed its school system.

Instead, research has shown marginal improvements in overall outcomes for both students who left their assigned public schools and those who remained. When public schools face strong competition, they improve. That’s consistent with economic theory, and it’s how competition works in other industries. 

Last month, a summary of research on competitiveness published in the Journal of Applied Business and Economics concluded that firms subjected to higher levels of competition were more resilient and better able to survive unexpected events. To no one’s surprise, the researchers found that “competition pushes businesses to innovate, adapt, and prepare for crises.” 

The beneficial effects of competition are so well established that when companies achieve or come close to achieving monopoly status, it’s long-standing practice for government to intervene. 

“Right now, too many companies are engaging in behaviors that stifle competition — like blocking new competitors from entering the market or limiting the information and options that give consumers real choice. As a consequence, the rest of us pay higher prices for lower quality products and services,” President Barack Obama said in 2016.

In other words words, robust market competition improves quality and lowers prices.

A 2002 Teachers College, Columbia University study reviewing 41 empirical studies of competition in education found “reasonably consistent evidence of a link between competition (choice) and education quality. Increased competition and higher educational quality are positively correlated.”

Market competition empowers consumers, which in turn improves services and lowers costs. It does this in all industries. Pretending that markets will harm education alone, while benefitting all other industries, is to indulge in self delusion.

The point of school choice is not to steer students to one particular option. It is to create options so that public education will work as well as it possibly can for all students.

Whether a student chooses a chartered public school, an Education Freedom Account, an out-of-district public school or their assigned  public school is immaterial. What matters is that they have the freedom to choose among multiple options.

And choosing among multiple options matters because choice empowers, competition improves, and markets work. 

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Universal open enrollment can help students and school districts

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By Jude Schwalbach and Andrew Cline

In the “live free or die” state, switching public schools is surprisingly difficult. State law gives students only a few options. The one easy way is to enroll in a chartered public school, if one happens to be nearby and a good fit. Every other option is obstructed by a series of hurdles that cannot be cleared without the approval of public school officials.

More than a dozen states offer a better way: K-12 open enrollment which lets students attend public schools other than their residentially assigned ones.

New Hampshire lets school districts reassign students to a different district under limited circumstances. It has a separate open enrollment law, which is cumbersome, vague and seldom used. Districts have to designate a school as an open enrollment school. Yet districts that do this can prevent their own students from going to another district’s open enrollment school. Only one district, Prospect Mountain, has an open enrollment program.

To fix this, legislators have introduced three proposals–House Bill (HB) 741, Senate Bill (SB) 101, and SB 97– that would significantly improve the state’s open enrollment law by letting students attend public schools other than their residentially assigned one.

There are two types of open enrollment: cross-district open enrollment lets students attend schools outside their assigned school district, while within-district open enrollment lets students attend schools other than their assigned one that are inside their school district.

A strong open enrollment law must be statewide, meaning that school districts must admit all transfer applicants so long as extra seats are available. Currently 16 states have strong open enrollment laws.

HB 741 and SB 101 would establish statewide cross-district open enrollment policies which would let students enroll in any public schools with extra seats. Both of these proposals boast strong transparency provisions at the state and district levels, ensuring that policymakers, taxpayers and families have open enrollment information at their fingertips.

If either of these proposals is codified, New Hampshire would be the 17th state to adopt statewide cross-district open enrollment.

S.B. 97 would establish a statewide within-district open enrollment law, letting students attend schools that are outside their assigned catchment area, but inside their district. If codified, New Hampshire would join 14 other states, including Delaware, with this policy.

All of these proposals would significantly strengthen New Hampshire’s open enrollment law. However, the best of them–H.B. 741–would launch New Hampshire’s policy from 25th place to 5th place nationwide per Reason Foundation’s open enrollment best practices, putting the state on par with leaders in open enrollment, such as Arizona, Utah and West Virginia.

Students use open enrollment for varying reasons. Research from Wisconsin, California, Colorado and Minnesota cross-district open enrollment programs showed that students used it to access better academics. Notably, data from Arizona, Florida and Texas showed that students tended to transfer to higher-rated school districts.

Additionally, Ready Colorado’s 2018 report and the California’s Legislative Analyst’s Office’s 2016 and 2021 reports found that students used the state’s cross-district open enrollment program to access specialized courses, such as Advanced Placement (AP) or International Baccalaureate classes, escape bullying, or shorten their commutes.

Moreover, a 2017 study of Ohio’s cross-district open enrollment program found achievement benefits for consistent participants compared to non-participants. The most significant positive effects occurred among black students and those in high-poverty urban areas. Similarly, a 2023 study of Los Angeles Unified School District’s within-district open enrollment program showed that it had positive effects on student achievement and college enrollment, especially when compared to non-participants

Open enrollment doesn’t just help students. It can help districts improve as well. Research from California, Ohio and Wisconsin showed that competition between school districts can encourage them to improve.

This isn’t surprising since research from Colorado and Minnesota showed that lower-performing districts tend to lose transfers at higher rates. Moreover, small or rural school districts in Wisconsin and California bolstered their enrollments with transfers. These data show that open enrollment can be a win-win for students and school districts.

As California’s Legislative Analyst’s Office wrote in its evaluation of that state’s District Choice Program, “home districts often respond to the program by taking action to gain clarity about the priorities of their communities and by implementing new educational programs. We also found that the home districts most affected by the program have made above-average gains in student achievement over the past several years, although the role of the program in these gains is difficult to determine.”

The evidence from other states strongly suggests that statewide open enrollment would achieve two long-sought goals in public education: elevate individual student outcomes and improve district public schools.

 

Jude Schwalbach is a senior policy analyst at the Reason Foundation. Andrew Cline is president of the Josiah Bartlett Center for Public Policy.

Download this policy brief here: JBC Policy Brief Open Enrollment

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Analysis of governor’s & House EFA bills shows small state costs, bigger local savings

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The Josiah Bartlett Center for Public Policy, in partnership with EdChoice, has released an analysis of the fiscal effects of two Education Freedom Account expansion proposals, one presented by Gov. Kelly Ayotte in her budget and the other in House Bill 115, representing the House leadership plan.

At the state level, the fiscal effects range in year 2 from a savings of $5.6 million to a cost of $5 million. At the local level, the effects range in year 2 from a savings of $21 million to $22.7 million.

The analysis covers the first two years of each proposal and looks at the fiscal effects of EFA expansion only. It does not attempt to predict the fiscal impact of natural enrollment changes in the existing EFA program. 

It’s important to note that the governor’s plan takes effect a year later than the House plan, so it would have no fiscal impact in the first year of the 2026-27 budget. 

Because the governor’s proposal limits expansion to students who have spent the prior year enrolled in a New Hampshire public school, it produces only savings. Every student who switches from a public school to the EFA program saves money for both state and local taxpayers. The estimated savings for the state are $2.3 million in the first year and $5.6 million in the second year. The estimated savings for local taxpayers are $8.6 million in the first year and $21 million in the second year. 

Because the House plan includes students not currently enrolled in public schools, there are small additional costs for the state. Those costs are estimated at $360,000 in the first year and $5 million in the second year. Savings to local taxpayers from the House plan are estimated at $824,000 in the first year and $22.7 million in the second year.

Key findings for the two plans are as follows:

 Governor’s proposal:

·      In year 1, EFA expansion would generate an estimated $2.3 million in net savings for state taxpayers.

·      In year 2, EFA expansion would generate an estimated $5.6 million in net savings for state taxpayers.

·      The fiscal effect on local taxpayers is an estimated $8.6 million in short-run net fiscal benefits in year 1 and $21.0 million in short-run net fiscal benefits in year 2.

Universal House Plan:

·      In year 1, EFA expansion would generate an estimated $360,000 in net costs for state taxpayers.

·      In year 2, EFA expansion would generate an estimated $5.0 million in net costs for state taxpayers. This cost represents 0.1% of total state expenditures on all public services.

·      The fiscal effect on local taxpayers is an estimated $824,000 in short-run net fiscal benefits in year 1 and $22.7 million in short-run net fiscal benefits in year 2.

Download the full report here: NH EFA Expansion Fiscal Brief Final

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Gov. Ayotte proposes education freedom for public school students starting in 2026

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In her proposed budget, Gov. Kelly Ayotte opens New Hampshire’s Education Freedom Account program to all students who’ve been enrolled in a New Hampshire public school (including chartered public schools) for at least a full academic year, the Josiah Bartlett Center has confirmed. The expansion would take effect July 1, 2026.

Students who currently have an EFA would remain in the program. Starting on July 1, 2026, the income cap at 350% of the federal poverty level would stay in place only for non-public school students. 

Ayotte’s proposal would make approximately 98,000 public school students eligible for an EFA starting in the 2026-27 school year. There are currently fewer than 6,000 students enrolled in the program, which would make Ayotte’s plan a 17-fold expansion of the program.

That’s a huge win for school choice supporters and for students who have struggled to succeed in their government-assigned public school. 

New Hampshire’s own state test scores show majorities of students failing to reach proficiency in science and math, and bare majorities performing at a proficient level in English, despite massive increases in school spending in the past quarter century. 

 New Hampshire public schools spend about $4 billion a year on K-12 public education, breaking down to an average of $26,320 per student in total spending. In addition, thousands of students experience bullying and other negative social interactions in schools that they don’t choose but are assigned to by their local governments. While most parents report being satisfied with their local public schools, many families want other options.

Ayotte’s budget would give most public school students the option of spending their state adequate education grant on an alternative education to the one provided by the school district in which they happen to live. 

Because it excludes students who did not spend the full prior academic year in a public school, kindergarteners presumably would not be eligible. 

The prior-year public school enrollment requirement poses some other potential problems. 

It raises the question of whether a student has to be enrolled in the same school for the entire time. Do students whose families move from one district to another still qualify?

In addition, students who are bullied, mistreated by staff or experience a significant decline in academic performance during a school year would have to suffer through the entire year before getting an EFA ticket out. 

Those issues should be addressed by legislators.

Ayotte’s position differs from the positions taken by the EFA expansion bills in the House and Senate. Both of those offer EFA access to all students eligible to enroll in a K-12 school. Yet Ayotte’s budget has given legislators a path to full universal eligibility. 

Her line-item budget raises EFA spending from $29 million in the first year to $44 million in the second year. That $15 million increase would generally cover the cost of universal expansion in that year. 

EFA students who switch from a public school to an EFA save the state money. The average EFA cost is $5,204 this year. Public school students cost the state an average of $6,177 in the 2023-24 school year, according to state data.

We published a study on Tuesday in partnership with EdChoice estimating that making all school-age students eligible for the EFA program would cost the state just $6.5 million in the first year and $11 million in the second year. That’s just a bit above the $15 million increase Ayotte built into her budget for the EFA program in 2027. But because the state spends more on public school students than EFA students, every student who switches from a public school to an EFA saves the state additional money. So legislators could pass universal expansion within the general scope of Ayotte’s proposed budget.

The language in Gov. Ayotte’s budget trailer bill is as follows:

VI. “Eligible student” means any student that is eligible to enroll in a public elementary or secondary school pursuant to RSA 189:1-a, is a New Hampshire resident under the provisions of 193:12, and meets one or more of the following conditions: 

  • Income eligibility.

Any student whose annual household income at the time the student applies for the program is less than or equal to 350 percent of the federal poverty guidelines as updated annually in the Federal Register by the United States Department of Health and Human Services under 42 U.S.C. section 9902(2). No income threshold need be met in subsequent years, provided the student otherwise qualifies. Students in the special school district within the department of corrections established in RSA 194:60 shall not be eligible students. 

Any student full-time enrolled in a district or a chartered public school in grades kindergarten through 12 for the preceding academic year from the first day to last day of the school year as reported to the department.

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Universal EFAs’ cost from new private & homeschool students likely less than $20 million in Years 1 & 2

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New Hampshire’s Education Freedom Account (EFA) program is restricted to families that make no more than 350% of the federal poverty level. (That’s $90,370 for a family of three and $112,525 for a family of four.) Republicans in the state Legislature have proposed removing the income cap and allowing all students to participate in the program. Opponents of expansion have incorrectly asserted that taking EFAs universal would cost the state more than $100 million in Year 1. But to reach that number, they included thousands of ineligible pre-school students, out-of-state students and current EFA students. They also assumed without evidence that every eligible student would take an EFA. No school choice program in the country has a 100% take-up rate among eligible students outside the public school system, and no program has a take-up rate that’s even in the same ballpark. 

After removing ineligible students and using more realistic take-up rates based on actual program experience in New Hampshire and other states, we estimate that only 1,479 students not currently enrolled in a public school are likely to take an expanded EFA in Year 1, and 2,501 are likely to take one in Year 2. Because this new population of eligible students comes from households with incomes above 350% of the federal poverty level (FPL), the average EFA grant will be smaller than in the early years of the program in which eligibility was restricted to lower-income students, about 40% of whom received additional aid for having incomes lower than 185% of the FPL. We project a per-pupil EFA grant of $4,410 for newly eligible students above 350% of FPL vs. $5,204 in the current school year. That leads to an estimated fiscal impact on the state budget of $6,522,390 in Year 1 and $11,029,410 in Year 2. 

This report was prepared by the Josiah Bartlett Center for Public Policy and EdChoice.

Accounting for Ineligible Non-Public School Students

State Education Department (NHED) data show 17,670 students currently enrolled in non-public schools in New Hampshire. That number includes more than 9,000 students not eligible for an Education Freedom Account. Using state data, we subtracted 1,516 pre-school students and 4,990 non-residents. New Hampshire has several famous boarding schools as well as smaller private schools within a short drive of our neighboring states. These schools attract thousands of non-residents who are ineligible for EFAs.

In addition, students who currently receive an EFA and use it to attend a non-public school are included in the total non-public school enrollment numbers published by NHED. Because they have an EFA, they are not eligible to receive another one. Therefore, they should be subtracted from the total. We conservatively estimated that half of current EFA students attend a non-public school. The percentage is likely higher. To avoid double counting, we removed these current EFA students from the non-public school student total.

Home-Schooled Students

When a home-schooled student takes an EFA, the state classifies that student as an EFA student, and not as a home-schooled student. Therefore, we cannot subtract the remaining home-schooled EFA students from the list of registered home schoolers. The state does not keep statistics on the total number of home schoolers. We used the state-reported figure of 3,499 home schoolers this fall and counted all of them as eligible for an EFA.

Accounting for Household Income

Families earning 350% of the FPL or less are currently eligible for an EFA, so making the program universal does not make them newly eligible. Census data show that 65.8% of New Hampshire households with children earn more than 350% of the FPL. So we multiplied the total population of eligible state-resident non-public school and home-school students by 65.8% to estimate how many would be eligible if the income cap is lifted. 

Take-Up Rates Among Eligible Non-Public School Students

Opponents of school choice commonly make the mistake of assuming that every eligible student will take advantage of school choice programs. That is not the case. No school choice program in any state has a 100% take-up rate among eligible students outside the public school system, and no program has a take-up rate that’s even in the same ballpark. 

To estimate take-up rates for expanded EFAs, we looked at New Hampshire, Arizona, which has a universal education savings account program, and Indiana, which expanded eligibility for its program from 370% of the FPL to 740% from 2021-2024. Annual take-up rates among eligible non-public school students in Arizona and Indiana ranged from 15.9% to 29.5%. New Hampshire’s take-up rates among non-public school students eligible for the EFA were 19.1% in 2021 and 32.3% in 2022. Since the other state rates were lower, we applied New Hampshire’s higher take-up rates to be more cautious.

Estimating EFA Spending Per-Student

Because the EFA program has been limited to lower-income families, a significant percentage of participants has received additional state aid for students who participate in the free-and-reduced-price lunch program. Thirty-seven percent of EFA students in the 2024-25 school year received this aid, which was $2,346 per-student. To be eligible, a family’s income must not exceed 185% of the FPL. Because every family that qualifies for this aid is already eligible for an EFA, we removed this aid when calculating the cost of expanding eligibility above 350% of the FPL. We estimate that the average per-student EFA cost for newly eligible students will fall from $5,204 to $4,410. 

Final Estimated Cost

After making these calculations, we estimate that 1,479 students newly eligible after making EFAs universal would enroll in the program in the first year, and 2,501 in the second year. At an average per-student cost to the state budget of $4,410, this would lead to a Year 1 cost of $6,522,362 and a Year 2 cost of $11,029,962.

For comparison, we also calculated the cost if the average per-student EFA grant remained at the current amount of $5,204. Using this per-student average, we get a Year 1 cost of $7,696,716 in Year 1 and $13,015,204 in Year 2. 

Even if we were to increase by 50% our estimated number of EFA enrollees in each year, using our more realistic $4,410 as the average per-student EFA grant, the total cost to the state would come to only $9,785,790 in Year 1 and $16,546,320. These projection are miles below the $100 million cost of EFA expansion that some opponents project.

Conclusion

It’s important to note that these numbers do not include cost savings to taxpayers from EFAs. It costs taxpayers an average of $26,320 in total state, federal and local spending to educate a single student in the public schools. But EFAs have averaged a cost of only $5,204 so far. Universal eligibility would lower the average per-student EFA cost even further. Even at the state level, the per-pupil cost would shrink, as EFA students receive only adequacy grant funds, while school districts receive some additional funding. State Education Department data show that the average per-student state adequate education grant in the 2023-24 school year was $6,177. For EFAs, the grant average was $5,204.

Opponents have claimed that making EFAs accessible to all students would cost the state more than $100 million in the next fiscal year, as every home-schooler and every student attending a non-public school would enroll in the program immediately. This is not only unrealistic. It’s impossible. The student figures used to reach the alarming $100 million number included more than 9,000 students who are not legally eligible for an EFA. 

When ineligible and already eligible students are removed, a more realistic picture of expansion’s affect on the state budget emerges. In our estimates, the fiscal impact on the state budget would be minimal, ranging from $6.5 million in Year 1 to $11 million in Year 2. Even if we increase our enrollment estimates by 50%, the fiscal effect rises to only $9.8 million in Year 1 and $16.5 million in Year 2. 

K-12 district public school enrollment has fallen by more than 54,000 students since 2001, as spending increased from $2.8 billion to $4 billion. Though the state has increased both total spending and per-pupil spending, the Education Trust Fund remains flush, with an estimated balance of $158.4 million at the end of the 2024 Fiscal Year, according to the preliminary Annual Comprehensive Financial Report for 2024. The modest fiscal effect of making EFAs universal is not only manageable, but it would allow the state to purchase a quality education at a lower per-pupil amount going forward.

Download this report here: JBC Brief Universal EFA Fiscal Impact

 

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Higher Spending, Lower Results: Why more money doesn’t equal better schools

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From local elections to legislative debates to legal challenges, discussion of public education in New Hampshire has been dominated by two persistent myths.  The first is that more spending is the primary means of producing better educational outcomes.  The second is that our educational outcomes are stunted because funding for K-12 public schools has “been slashed,” as a common talking point asserts.

Because of these myths, instead of focusing on school leadership and proven, outcome-based measures of success, voters and policymakers have too often devoted their efforts toward improving fiscal inputs. 

In a new policy brief, the Josiah Bartlett Center for Public Policy reviews the last few decades’ worth of public education spending in New Hampshire, along with student performance measures, to help Granite Staters understand that the relationship between spending and outcomes is not as simple as its proponents claim.

Spending doesn’t equal “investment”

When every dollar spent on K-12 district schools is treated as an “investment,” regardless of how it is spent, it should not be surprising that results do not meet expectations. The data show clearly that New Hampshire, along with the rest of the United States, has made the critical error of equating spending with investment. If the two terms were synonymous, our student performance would look very different. That New Hampshire has made this simple category error for so long is not merely unfortunate.  It has had negative consequences for generations of students.  

Between 2001-2019, public schools in New Hampshire increased their total expenditures per student on an inflation-adjusted basis by 66.8 percent, from $11,336 in 2001 to $18,905 in 2019. This means that New Hampshire public school students had 66.8 percent more in inflation-adjusted taxpayer funding devoted to their education in 2019 than in 2001.

The trends have not changed since 2019. Today, New Hampshire spends $3.9 billion on K-12 public education, for an average per-pupil cost of $21,545 when counting only operating expenditures, or $26,320 when counting total expenditures (including non-operating expenses such as capital and debt). Enrollment since 2019 has fallen by just shy of 12,000 students.

On top of that, New Hampshire received about $630 million in federal COVID-19 relief money directed toward public education.  The Manchester School District alone received $91 million, Nashua 44.4 million. 

One would expect large gains from such huge fiscal inputs. But those returns have not materialized.  

Our research has shown that New Hampshire public school districts (and local voters) choose to increase spending annually, independent of enrollment, and the new money tends to fund additional staff.  One would expect spending to rise as enrollment rises.  But spending also rises when enrollment falls.  This drives per-pupil spending higher, as districts collect and spend more money on fewer students. 

Spending more money on fewer students is exactly what was supposed to lead to higher educational outcomes.  Parents have been told for decades that schools could offer higher quality services if only they had the resources to hire more staff and reduce class sizes. 

In New Hampshire, those two input goals have been achieved. With rising revenues and declining enrollments, public school districts have hired thousands of additional staff and cut class sizes. The state caps class sizes at 25 students in grades K-2, and 30 students in grades 3-12. Yet schools are not close to those caps, with a state average class size of just 16.9 students. In the 1993-94 school year, New Hampshire averaged 21.8 students per elementary school class and 20.8 students per secondary school class. 

The chart below shows that New Hampshire’s K-12 district public schools hired 10 times as many staffers as all other state and local government combined (excluding higher education) from 2001-2019. This hiring spree dwarfed all other state and local government hiring even as K-12 schools lost students and the state population (people served by non-school agencies) grew.Spending and ROI

Voters are often misled into thinking that additional spending by itself is the best way to improve student outcomes.  But that is demonstrably untrue. Higher spending is not an escalator that brings students automatically to higher achievement, as the below chart, republished with permission from the Edunomics Lab at Georgetown University, shows.

Some level of spending on educational services obviously is essential to the provision of a quality public education.  Educators can’t do something with nothing. But beyond a certain point, additional spending does not produce better results. The data on K-12 spending and student performance in New Hampshire going back decades strongly suggest that we are past the point of diminishing returns.

Since additional dollars are not producing additional gains (and have instead coincided with performance declines), it’s imperative to reassess our thinking about how to get a better return on investment (ROI) for our education dollar. Spending itself is not an investment.  

Consider special education services. The Edunomics Lab reviewed data on special education spending and outcomes, concluding that “states with higher identification rates of learning disabilities do not deliver better reading outcomes for these students. Nor are states with comparatively more staff-intensive special education programming producing higher reading scores.”

Their research and that done by other academics has found that simple small-group reading interventions can produce significantly better outcomes for students with severe reading deficits than more expensive special education services do.

Examples like these show that strong gains can be produced with simpler, less-expensive inputs than many schools currently use. That doesn’t mean that less costly alternatives will work for every student. But that they have been shown to work better for many students illustrates that savings can be found while improving student outcomes.

So how do we find those high-ROI activities in which to invest our limited education dollars? That is the question all Granite Staters interested in public education need to ask. It’s clear that simply writing bigger checks is not a sufficient answer. Yet the search for better answers is hindered by a persistent belief that no search is necessary as long as taxpayers fund large school budget increases every year. Until we overcome that obstacle, we’ll continue to break education spending records without generating the kind of returns our students need.

In the press release announcing the disappointing 2024 Nation’s Report Card results, Beverly Perdue, chairwoman of the National Assessment Governing Board and former Democratic Gov. of North Carolina, made the following statement:

“This is unacceptable especially for our lowest performing students. We need to invest more in the data-informed efforts that have been shown to work so that we lift up our students and accelerate their learning even further.”

That’s right. Americans have spent decades increasing K-12 education spending on the theory that higher fiscal inputs were the missing ingredient in the recipe for student success. That theory has been proven wrong.  As Gov. Perdue suggested, it’s time to focus less on the district finance office and more on the classroom.

Download the full policy brief here: JBC Brief Spending & Outcomes.

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Education Freedom Accounts are public education, not an anti-poverty program

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The State New Hampshire and its towns and cities provide the opportunity to obtain a publicly funded education to every school-age child, regardless of income.

And no one complains that this unfairly benefits higher-income households.

To illustrate the point, the median household income in Hopkinton is $130,216. That’s 55% higher than in Concord ($83,701) and 36% higher than the statewide median household income of $95,628, according Census data.

Yet the state doesn’t try to lower costs by telling Hopkinton to close the schoolhouse doors to its more prosperous families, who, after all, could probably afford private school tuition. 

The state certainly could means test public education services, treating public education like a poverty relief program. But it does not. Why?

Because New Hampshire has always considered public education a core government service provided to all, like roads, courts and public safety services.

And that is how Granite Staters use public education. 

Currently, 75% of New Hampshire households earning more than $200,000 a year send their children to public schools, according to Census data. The state doesn’t tell those children that their families make too much money to access public education. Yet the state says exactly that to children who want to use Education Freedom Accounts and Tax Credit Scholarships. 

Though eligibility is capped at 350% of the federal poverty level, Education Freedom Accounts are not an anti-poverty program. The income caps were established to prevent the new program from being overwhelmed in case initial demand was high, and to limit the initial fiscal impact on the Education Trust Fund. They were a temporary measure to ensure a successful rollout of the program. 

These eligibility limits are similar to those placed on the tax credit scholarship program, and for similar reasons. Initially, 70% of tax credit scholarships were reserved for students enrolled in a district public school. But that percentage declines over time.

New Hampshire has five methods of delivering a public education to students:

  1. District public schools;
  2. Chartered public schools;
  3. Town tuitioning;
  4. Tax Credit Scholarships;
  5. Education Freedom Accounts.

The first three options are available to all students, regardless of income. The last two are income-restricted. 

The difference between methods 1-3 and methods 4-5 is that parents are empowered to choose the source of their child’s education in the latter two methods. It is NOT that students can attend non-public schools.

Through the town tuitioning program approved in 2017, New Hampshire already pays for students of any income level to attend a private school if their local district does not offer a public school in their grade span. 

There are two primary difference between town tuitioning and the EFA programs. 1. The EFA program costs taxpayers a fraction of tuitioning, as students have access only to their state adequacy grant and not the local portion of their public education allotment. 2. The non-district educational options are limited in the tuitioning program to approved schools selected by the local district.

In other words, New Hampshire already has a public education program that funds private school education, costs more per pupil than the Education Freedom Account program and includes students of all income levels.

Education Freedom Accounts operate under a similar principle to the town tuitioning program. If the local district school does not offer the services the student needs, the student can shop for an education provider that does. 

The difference is that the town tuitioning program presumes that a student will receive the education he or she needs in his or her assigned public school. The EFA program acknowledges that this is not always the case.

Though New Hampshire’s public schools are among the best in the nation, not every child thrives in his or her assigned public school. Many students, regardless of income, would find a better educational fit elsewhere (including in a different district school). 

This is no trivial matter. Finding the right educational environment can change a child’s life. It can mean the difference between long-term success or failure. 

House Bill 115 would allow New Hampshire families to match their child to the education that best fits that child’s needs. 

We know from school choice programs in other states that empowering parents to shop for education does not destroy local public schools. On the contrary, it improves them, as market competition improves costs and services in all industries. Of 29 quality studies done to test the performance of public school students after the introduction of a school choice program, 26 have found positive effects.

Likewise, claims that universal eligibility for Education Freedom Accounts will immediately cost the state $100 million are unfounded.

No school choice program in the United States has 100% enrollment of eligible participants. 

In the first year of New Hampshire’s EFA program, just 15% of eligible private school students enrolled. In 2024, only 24.6% of eligible private school students were enrolled. 

Data from New Hampshire and other states show that private school take up rates start relatively small and grow over time. And still, even the oldest programs do not have 100% enrollment.

If legislators are concerned about the initial cost of expanding EFA eligibility, there are ways to phase in access to the program that don’t involve income caps, which violate the state’s longstanding principle of providing a public education to all school-age children.

Ultimately, the argument against universal EFAs is not an argument against providing a public education to higher-income families. New Hampshire already does that. It’s an argument that higher-income families might actually prefer this option if it’s given to them (which doesn’t express a lot of confidence in district public schools).

But that’s not an argument for denying all students this option. It’s an argument for using this option to improve district public schools, making them more attractive to families, which is what volumes of research on school choice suggests will happen.

Universal eligibility would give every New Hampshire student access to an education that works for that individual child, which is something the current system does not achieve. That would fulfill the promise of public education while also creating the competitive forces necessary to drive improvements in the traditional public school system. In the end, all children would win, regardless of which educational option they chose. 

But that universal win can’t happen without universal access to education freedom. 

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A few regulatory changes could make N.H. first in freedom for education entrepreneurs

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There’s more that can be done to make New Hampshire a freer state for education entrepreneurs looking to start small, decentralized, and unconventional educational environments, but so far the state is doing better than most.

That’s according to the Education Entrepreneur Freedom Index released by the yes. every kid. foundation. 

Of 10 possible points that a state could earn, only three states attained the high score of seven. New Hampshire finished with six points, one of only 10 states with at least six or more points in the Index.  

The Index measures the extent to which regulations affect education entrepreneurs in each state, the imagined environment of which is a small, non-religious educational setting with school-age learners from a group of families participating in educational activities for part of the week. 

The Index evaluates each state according to 10 questions that account for the following five regulatory areas: business registration, homeschool laws/regulations, nonpublic school laws/regulations, child care laws/regulations, and occupancy codes. The questions are:

  1. Can the educational environment operate without getting a state business license under state law?
  2. Does the state allow for unlicensed, unregistered, unaccredited, or unapproved non-religious, nonpublic schools?
  3. Does the state allow nonpublic schools to operate without imposing educational requirements on teachers?
  4. Does the state’s homeschool law support or facilitate the operation of the educational environment?
  5. Can the educational environment operate in accordance with the state’s homeschool law without registering?
  6. Does the state allow homeschool instruction without imposing educational requirements on instructors?
  7. Does the state allow child care facilities to operate without imposing educational or qualification requirements on administrators/supervisors/teachers?
  8. Do the state’s child care laws and regulations provide a clear exemption for “Drop In/Open Door” programs?
  9. Do the state’s child care laws and regulations provide a clear exemption for educational programs for school-age children?
  10. Does the state adapt the application of occupancy code requirements in recognition of the existence and needs of small learning environments?

States with more relaxed homeschool and nonpublic school laws/regulations score higher, as entrepreneurs have an easier time getting started in these states. 

Child care regulations represent a near ubiquitous obstacle to alternative learning environments, and occupancy codes are disproportionately burdensome to small learning environments, the authors noted in a presentation upon the study’s release.

Though New Hampshire lost a point for rules requiring state approval for nonpublic schools, the state could become much more friendly to education entrepreneurs, the study’s authors conclude, primarily by relaxing some child care rules and local regulations.

State laws setting strict education and professional qualifications on child care personnel and the absence of clear exemptions for drop-in/open-door programs cost the state two points in the Index. The lack of clear exemptions for small learning environments such as microschools is a problem in New Hampshire. 

Some states, such as Oklahoma, exempt programs consisting of school-age homeschoolers three years of age and older from its child care licensing laws and regulations. 

New Hampshire is marked down on question 10 because of the local zoning and occupancy codes that often represent onerous barriers for aspiring microschools. 

As the Index makes clear, local zoning laws and regulations have emerged as primary roadblocks to the proliferation of microschools across the country with the growing education freedom movement. And the Live Free or Die state, with its especially burdensome web of local exclusionary zoning rules, is no exception. 

One way New Hampshire could improve its score in the Index is to loosen these local zoning restrictions hindering small learning environments. 

While some towns are more lenient than others, often the most daunting hurdle to starting a microschool is finding a permissible location. This is especially true if the microschool founder doesn’t want to operate out of their own home. 

Although homeschooling is only lightly regulated in New Hampshire, those microschools that are more formalized than homeschool co-ops but less formalized than private, nonpublic schools are left in a legal gray area where they’re prohibited from many zoning districts throughout the state because they’re not a permitted use in those areas.

The main reason for that is because education is not allowed by right in New Hampshire.

Recent actions taken by state lawmakers in Utah can offer guidance to legislators in New Hampshire on how to reduce the Granite State’s zoning burden on microschools. 

With just a few words, Utah legislators struck a huge blow to local zoning ordinances impeding the establishment of microschools throughout the state. Senate Bill 13 states, in part, “A charter school, home-based microschool, or micro-education entity shall be considered a permitted use in all zoning districts within a municipality.” 

Signed into law by Gov. Spencer Cox, microschools are now recognized as businesses without any location restrictions in Utah. 

The bill defines a “home-based microschool” as “an individual or association of individuals that: (i) registers as a business entity in accordance with state and local laws; and (ii) for compensation, provides kindergarten through grade 12 education services to 16 or fewer students from an individual’s residential dwelling, accessory dwelling unit, or residential property.” 

Any alternative/unconventional educational environment that fits this definition could set up shop in any zoning district within any Utah municipality under SB 13. As such, the language in Utah’s bill essentially makes education allowable by right across that entire state. 

Such a path forward is a realistic option for New Hampshire to take to become an even freer haven for education entrepreneurship, and state lawmakers wouldn’t even need to define “microschool” in law to do so. 

Just this past legislative session, New Hampshire state lawmakers did essentially the same thing for home-based child care. House Bill 1567 requires local zoning and planning regulations to allow family or group child care programs as an accessory use (by right) to any primary residential use throughout the state.

The same thing could be done for education, as we recommended in March.

By providing that education is similarly allowed by right in all zoning districts within a municipality (and all nuisance laws still apply), New Hampshire could tear down all local exclusionary zoning laws prohibiting microschool usage across the state in one fell swoop. 



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How $90 has put EFAs out of reach for a Manchester single mom

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Kay is a 63-year-old single mom in Manchester who would love to be able to retire in the next five years. But as things stand, she doesn’t think she’ll be able to. Her adopted son needs the kind of high school environment they haven’t found among area public schools. And she needs to find the funds to pay for what he needs.

Kay and her late husband adopted their son from Kay’s husband’s niece. The niece, who struggled with addiction, had three children adopted out. Two were adopted through child protective services and eventually wound up with a grandparent, Kay said. Kay and her husband adopted their son directly, so there were no financial stipends.

In 2019, Kay’s husband died unexpectedly, and she decided to move back East from the Southwest to be closer to family for support, she said. Kay, her son, and two daughters call Manchester home.

Under the income cap legislators set for the Education Freedom Account (EFA) program, Kay’s single-mom family is classified as a “family of four,” which is presumed to have two parents and two children. That classification has put her son’s educational needs just out of reach.

Kay is a sales professional with a good job. But sales work is not always steady work in a changing economy. After she was recruited to work for a New Hampshire company, things seemed to be settling down for the family, but six months after the relocation, and two weeks before Christmas, Kay was laid off, she said.
She joined a new company in April 2023, and three months later, due to market conditions and a company restructuring, she was again laid off.

For a single mom raising a teenage son and two older daughters that she’s put through college, the money, even when it’s steady, goes fast. Even today, she’s still catching up on finances from the layoffs, she said.

State law caps Education Freedom Account eligibility at 350% of the federal poverty level. For a family of four, that’s $109,200. Kay’s salary from her new job puts her $90 over the cap, she said.

On the state’s spreadsheet, Kay’s family of four looks like a family with two working adults and two children. The spreadsheet doesn’t know the difference between that typical family and a single mom with three children.

When Kay decided to move to Manchester for its perfect location between her work and the customers she serves in Boston, she didn’t realize the challenges in the local public schools, she said. Having lived in the Southwest for years, the cost of many local private schools was another surprise.

Unable to afford a private school for her son, Kay enrolled him in a public charter school in Manchester for 7th and 8th grade. But, given her son’s unique needs and background, she’s seeking a new environment with more resources that could be dedicated to him, she said.

“He has suffered a lot of loss, has ADHD, is in counseling and needs a positive environment with resources,” she said. “He’s a wonderful kid, but needs good examples in other students, leaders, academic support, and a school with athletics and activities.”

The charter school has done the best it can with the resources it has, and there are great people working there, Kay said, but it just isn’t the right place for her son.

In search of a different setting for her son for high school, a Catholic school in Manchester came highly recommended. On a tour, they met with several teachers, administrators, coaches, and even students.

“When we toured, he got in the car and said, ‘Mom, this is my school…everyone is so nice,’” Kay said.

Her son is very excited for robotics and sports. He’s motivated by the support he’d get to excel, she said. The school has academic coaches who will help him with studying, focus and time management, which Kay said was critical for him. The school has a guidance counselor who told her son, “I will be here for your four-year journey to set you up for success in college,” Kay said. She also thinks that the spiritual focus will be a positive influence given the things he is exposed to in a big city.

When she learned about the Education Freedom Account program, Kay thought it would be the answer to her son’s educational needs. But the income cap has kept them locked out. It sees her family as a two-parent, two-child family, not a single mom with three dependents who works in an industry where layoffs are a common risk.

“I get emotional about this because it upsets me that only your W2, not life circumstances, are taken into account when applying for financial aid with schools or education funds,” she said.

When one of her daughters is no longer a qualified dependent, Kay could apply for an EFA as a family of three. But she would again be over the 350% cap, which is currently $90,370 for a family of three.

With an income cap of 425% of the federal poverty level, though, Kay’s family would qualify both as a family of four (a $132,600 cap) and as a family of three (a $109,735 cap). The 425% cap is the limit set in the conference committee version of House Bill 1665.

Without a higher income cap for the EFA program, Kay said she’d take a second job to make the tuition work if she had to. Her daughter is prepared to switch to part-time at New Hampshire Technical Institute to cut the family’s costs, she said. They’d try to make things work, but it wouldn’t be easy.

She would sell her home and downsize, but high interest rates and lack of available homes on the market make that an unrealistic option.

For Kay’s family, the EFA income cap is keeping a perfect educational option just out of reach. A cap designed for traditional families has put a single mom in the position of getting a second job to pay for the education that’s right for her son.

In trying to limit EFA access to families in need, legislators have left out families in need who don’t fit the preconception of what a “family of four” or “family of three” looks like.

As other families will be doing this week, Kay said she and her son will be watching the EFA vote on Thursday with hope. If the income cap isn’t raised, she said she’ll become an activist to push for universal eligibility next year. The difference an EFA could make for families like hers is too important for her not to get involved, she said.

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