Two ways to to decide whether Right to Work is right for New Hampshire

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Most U.S. States (27) have Right to Work laws, and that includes a growing number in the industrial Midwest. Indiana, Michigan and Wisconsin have them, and every state bordering Ohio, save Pennsylvania, has one.  

As Right to Work laws have spread North and West in recent decades, they have hit a hard wall in the Northeast. Were New Hampshire to become a Right to Work state, it would not only be the first in New England, but the first on the East Coast above West Virginia.

That has made the fight over a Right to Work law here particularly bitter. Both sides understand that New Hampshire’s adoption of a Right to Work law could change the game in the entire Northeastern United States.

With such high stakes, it’s not surprising that facts often have been lost amid all the heated rhetoric. So it’s important to start by understanding exactly what these laws do.

Right to Work laws simply require an employee’s consent before an employer can redirect any portion of the employee’s pay to a labor union as dues, fees or other charges. 

Senate Bill 61, currently being considered in the Legislature, puts it this way:

“It shall be unlawful for any employer to deduct from the wages, earnings, or compensation of any employee any dues, fees, assessments, or other charges, to be held for, transferred to, or paid over to a labor organization, unless the employee has first presented, and the employer has received, a signed written authorization of such deductions, which authorization may be revoked by the employee at any time by giving written notice of such revocation 30 days in advance of its effective date.”

In pursuit of that goal, the bill further prohibits employers from entering into labor contracts that compel non-members to pay dues, fees or charges to a union. And it prohibits employers from discriminating against employees based on their union membership status. 

This isn’t extreme language. Michigan’s Right to Work law is phrased similarly. 

The core issue is individual employee rights. These laws do not prohibit collective bargaining, ban union organizing, or in any way prevent employees from unionizing or employers from signing union contracts. All they do is prevent such contracts from compelling non-members to contribute financially to unions.

But this primary purpose of Right to Work laws — the protection of individual freedom — tends to get lost in the political debate as the focus shifts to the economic effects. 

There is a wide variation in the quality of research on Right to Work laws, and therefore there is some confusion about what they show. Simplistic sloganeering often gets in the way of a clear look at quality data.

For example, opponents shout that Right to Work means “the right to work for less,” and they present charts that show lower average wages in Right to Work states. But of course, Right to Work laws for many years were primarily concentrated in Southern states with a much lower cost of living than the Northern states that did not have such laws. Simply controlling for cost of living and education levels erases much or all of that gap. 

Furthermore, such simplistic attacks divert policymakers’ attention so that they don’t spend time looking at the long-term effects of Right to Work laws on the economy as a whole. There, the research is much stronger — and much more favorable to proponents. 

A useful summary of the academic research on Right to Work laws comes from the West Virginia University College of Business and Economics. In 2015, West Virginia legislators were considering whether to adopt a Right to Work law. To help with that decision, researchers at the College of Business and Economics examined decades’ worth of past economic research on Right to Work laws. That study wound up being a good guide to thinking about whether a state should adopt a Right to Work law. (West Virginia legislators did pass a Right to Work law.)

The researchers went through academic studies that found both positive and negative effects of Right to Work laws. They summarized all those findings, then ran their own analysis of the data, controlling for outside influences to try to isolate the effects of Right to Work laws themselves, not of other factors such as overall regulatory climate, cost of living, etc. 

They found that Right to Work laws are strongly associated with higher levels of economic growth, higher levels of employment, and lower levels of union membership. On wages, the results were inconclusive.

This is generally consistent with a large body of research on Right to Work laws. Studies tend to find that Right to Work laws are associated over time with large gains in both employment and Gross Domestic Product. 

A good example of how Right to Work laws can improve employment and economic growth comes from research that looked at manufacturing employment in counties near the border between states that have Right to Work laws and those that don’t.

Manufacturing employment has been shown to experience large and rapid gains along the borders of Right to Work states when the neighbor is not a Right to Work state.

Right to Work states tend to grow faster and add jobs at a faster rate than states without Right to Work laws. As state competition for employers and employees becomes more acute, those higher growth rates will become increasingly more important. The data show pretty convincingly that over time states without Right to Work laws will fall further behind their faster-growing Right to Work competitors.

After the right to free association, that positive effect on the economy overall is where policymakers ought to be focused. 

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Bartlett report shows that Education Freedom Accounts will save taxpayer money, improve student outcomes

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A new study from the Josiah Bartlett Center for Public Policy finds that the Education Freedom Account program in Senate Bill 130 would save taxpayers $6.65 million in its first two years, decrease state aid to district public schools by only 0.024% by its second year, and decrease district public school enrollment by an average of only 0.8% in its first year and 2% in its second year.  (In the last decade, public school enrollments in New Hampshire have fluctuated by more than 9% a year, on average.)

It also would produce $30.6 million in higher lifetime earnings for students who take an EFA in the program’s second year, generate $12.9 million in economic benefits to the state by creating more high school graduates, and generate a savings to society of $163,000 from reduced felonies among the second year EFA class alone.

Below is the report’s executive summary. You can find the full report here: Analysis of SB 130 EFA Program. We post the tables for the appendices separately here: (appendix table C1) (appendix table c2) (appendix table c3)

Executive Summary:

Two bills introduced in the New Hampshire Legislature in January of 2021, House Bill 20 and Senate Bill 130, propose the creation of Education Freedom Accounts (EFAs) for NH families.  The EFA program would allow any NH resident eligible to attend a public school in grades K-12 to use his or her per-pupil state education grant to pay for a variety of educational services chosen from a state-approved list.  The Senate bill (SB 130) is moving forward after HB 20 stalled in the House.  This report analyzes the Senate version of the bill.

As amended in the Senate Education Committee, SB 130 limits eligibility to families whose household income is less than 300 percent of the federal poverty line (FPL), adjusted for household size.  If a family prefers their child’s assigned public school, then nothing changes.  State adequate education grant money is automatically sent directly to the school district, as happens currently.  If an eligible family prefers an alternative to their assigned school, parents could apply to create an EFA.  The state would deposit the student’s adequate education grant (plus any qualifying differential aid) into the EFA.  The family could then choose to spend that money on a number of pre-approved educational services, such as tuition at another public school, tuition at a private school, tutoring, special education services, tuition at a community college, and online education, among others.

This report provides a fiscal and economic analysis of this legislation, as well as a review of New Hampshire public education spending and academic outcomes in recent years.  It finds that:

  • The percentage of New Hampshire students eligible for EFAs is estimated to be 31.26 percent overall, and 31.1 percent for private school students.
  • The state can expect approximately 966 students to use an EFA in the 2021-22 academic year and 2,335 to use an EFA in the 2022-23 academic year.These estimates are based on take-up rates of similar programs in Indiana and other states, as well as a review of take-up rates of other government aid programs.
  • For the 2021-22 academic year, the average cost of an EFA would be $4,578.The projected cost to the state of the proposed EFA program would be $2.4 million, while local school districts would save an estimated $4.2 million, leading to a projected taxpayer savings of $1.85 million (with rounding).
  • For the 2022-23 academic year, the average cost of an EFA would be $4,803.The projected cost to the state would be $5.9 million, while local school districts would save an estimated $10.7 million, for a net taxpayer savings of $4.8 million.
  • The average reduction in state adequate education aid to local school districts would be $12,247 in the first year of the program and $32,126 in the second year, absent provisions in law that delay those reductions.  That is an average of just 0.048% of district revenue in the first year and 0.049% in year two.  But districts receive funding based on prior-year enrollment.  Therefore, there is no reduction in state aid to districts in the first year.  SB 130 requires that districts receive 50% of any lost EFA funding in year two as a “phase out grant.”  With that grant in place, district revenue would fall by only $16,063 on average in year two, which is just 0.024% of average district revenue.
  • The enrollment reduction per school district is projected to average 2.65 students (0.8%) in the first year of the program and 6.63 students (2%) in the second year. From 2010-2019, NH districts experienced an average annual enrollment change of 54 students, or 9.41% of their student populations.  Enrollment changes caused by EFAs would fall well below the average fluctuation for which districts budget on an annual basis.
  • Local school district savings would average $26,694 in year one and $68,005 in year two.
  • The average EFA grant is only 23% as large as the cost of educating a student in a traditional NH public school, so the taxpayer cost of educating a student through an EFA is 77% less than the cost of educating a student in a traditional public school.
  • The EFA program would result in a $28,744 increase in lifetime earnings per student for 1,063 public school students who choose an EFA in the second year of the program. That would generate a cumulative total of $30.6 million in higher lifetime earnings.
  • The EFA program would result in 43 more high school graduates among its second year class, generating an additional $12.9 million in economic benefits for those students.
  • The EFA program would cause a reduction in crime, generating a savings to society of $163,000 from reduced felonies among its second year class alone.
  • Adjusted for inflation, total expenditures in New Hampshire public schools increased by 66 percent between the 1994-95 and 2017-18 school years, while public school enrollment fell by 9 percent.
  • The number of teachers in New Hampshire public schools increased by 23 percent between 1994-95 and 2018-19, as the number of students fell by 9 percent.In addition, NH public schools increased their employment of non-teachers (all other staff) by 80 percent.
  • While current spending per student (a figure that excludes capital and some other expenses) increased by 77 percent between 1994-95 and 2017-18, average teacher salaries increased by only 1 percent (both adjusted for inflation).
  • Despite this large increase in spending per student and tremendous increase in staffing, New Hampshire public schools’ performance trends on the National Assessment of Educational Progress (NAEP) lagged the nation between 2003 and 2019. NAEP gains in New Hampshire have lagged the national average in Mathematics, and NH’s average Reading performance has fallen.
  • NH students’ academic performance has lagged behind the performance of the two states with the highest percentage of students enrolled in school choice programs, Arizona and Florida. In 2019, 6.7 percent of Arizona students and 4.9% of Florida students were participating in a state taxpayer-funded private school choice program.  Only two-tenths of one percent of New Hampshire students were participating in New Hampshire’s town tuitioning program (to attend a private school) or the state’s Education Tax Credit Program.  As shown in Section IV of this report, Arizona and Florida’s gains in NAEP scores far exceeded national changes and changes in New Hampshire’s average scores between 2003 and 2019.  Both Arizona and Florida have child poverty rates about 2.5 times higher than New Hampshire’s rate, and both states spend about 70 percent less per student than New Hampshire’s public schools.

In summary, the EFA program in SB 130 can be expected to save NH taxpayers $6.65 million in its first two years, educate students at less than 25% of the cost of a traditional public school, increase the number of high school graduates, and create $30.6 million in higher lifteime earnings for its first students, $12.9 million in economic benefits for students who otherwise wouldn’t graduate high school, and $163,000 in benefits to the state from a reduction in felonies.  In addition, evidence from other states suggests that the proposed EFA program is highly likely to improve outcomes for public school students who do not choose an EFA.

 

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Amid enrollment decline, N.H. school spending has risen sharply

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A review of public school spending, staffing and enrollment numbers going back to the 1994-95 school year might surprise a lot of Granite Staters who have heard for decades that New Hampshire public schools have been underfunded. The truth is that spending has risen dramatically as enrollment has declined. And much of that new spending was devoted to hiring staff.

Analyzing official state data, we found that:

  • Adjusted for inflation, total expenditures in New Hampshire public schools increased by 66 percent between the 1994-95 and 2017-18 school years.
  • At the same time, public school enrollment fell by 9 percent.
  • Though enrollment was declining, the number of teachers in New Hampshire public schools increased by 23 percent between 1994-95 and 2018-19.
  • The number of non-teachers (all other staff) increased by 80 percent from 1994-95 and 2018-19.
  • The combination of a staffing surge and an enrollment decline led to smaller student-teacher and student-staff ratios. From 1995-2019, New Hampshire’s student-teacher ratio fell from 15.6 students per teacher to 12.2. The student-staff ratio fell by nearly 50%, from 20 students per staff member in 95 to 10.8 students per staff member in 2019.
  • The large spending increases did not produce large increases in average teacher salaries, however. Current spending per student, adjusted for inflation, increased by 77 percent between 1994-95 and 2017-18, yet average teacher salaries increased by only 1 percent, also on an inflation-adjusted basis. (“Current spending” excludes capital and some other expenses that are included in “total expenditures.” It’s the spending from which districts pay staff salaries.)

These findings come from a new report, to be released Monday. It will feature a spreadsheet that details these data for each school district in the state. Some districts experienced enrollment increases since 1994-95. (Bow, Hopkinton, Wilton-Lyndeboro, for example.) But most experienced declining enrollment. And as enrollment fell statewide, spending and staffing continued to increase. 

New Hampshire’s total expenditures per student have risen faster than the national average. 

In 2003, New Hampshire’s total expenditures per student were only slightly above the national average. The U.S. average that year was $9,299, and the New Hampshire figure was $9,802. By 2017, the U.S. average had risen to $13,834, but New Hampshire’s had grown to $17,006. (These figures are in nominal, not inflation-adjusted, dollars.)

In the last two years, there has been an increased focus on public school funding in New Hampshire. A wide variety of proposals have been floated for how public education could be funded or delivered differently. Amid all of this disagreement, one assertion that often goes unchallenged is the claim that public schools have suffered long-term reductions in overall funding. That simply isn’t true. As enrollment has declined, spending has increased. 

Any discussion of public education funding should begin by acknowledging this basic fact. 

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Merrimack Station, coal power and moral responsibility

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A recent New Hampshire Public Radio story about New Hampshire’s last remaining coal-fired power plant offers a great example of how left-wing activists enjoy an unwarranted ability to frame journalistic narratives, particularly on energy issues.

“New Hampshire’s coal-fired power plant, the last of its kind in New England not set to retire, will now remain online through at least 2025, despite calls from climate change activists for it to close,” NHPR reported.

To see how this framing elevates the activists’ position, just apply it to other stories involving non-leftist protesters.  Imagine public radio stories written this way…

  • “New Hampshire’s remaining abortion clinics remain open despite calls from anti-abortion activists for them to close.”
  • “Democrats raise taxes despite calls from anti-tax activists for tax cuts.”
  • Schools remain closed for in-person instruction despite calls from parents, pediatricians, and epidemiologists that they open.”

Activists on the political left are treated by the media as morally and factually correct by default. Their complaints, protests and demands are accepted as morally serious and intellectually rigorous without question.

Because of this, a handful of radical activists have their publicity stunts and press releases covered with tones of gravity and seriousness, as if their positions represent basic common sense, while the same courtesy is not given to businesses or non-leftist activists.

In this framing, the activists are treated as morally superior, or at least as representing the reasonable, generally accepted point of view.

But are they?

The real story regarding Merrimack Station’s continued existence is that New Hampshire’s last coal-fired power plant will remain available as a backup source of power for another two years to provide a hedge against the risk of blackouts during periods of peak demand — because coal has qualities essential for a backup fuel source. It is reliable, storable, cheap and available.

It’s reasonable to say that coal shouldn’t be needed in New England anymore. Cleaner alternatives could have replaced it as a source of backup power it by now.

But the availability of those alternatives has been restricted by the very activists who demand that Merrimack Station be closed immediately.

By fighting natural gas pipeline expansion proposals, environmentalist have ensured that higher-CO2 emitting coal- and oil- fired generators will continue to be needed to ensure reliability of New England’s electricity grid.

New England’s electricity market is only partially deregulated. The grid operator, ISO New England, is charged with ensuring that electricity is delivered 24/7, 365 days a year. The provision of that power is not left entirely to the market. The grid operator pays some power generators to keep generation facilities on standby in case their power is needed in an emergency.

That’s the case with the coal-fired Merrimack Station. It receives capacity payments to ensure its availability to run on (mostly) cold days when natural gas is being used to heat homes, limiting its availability to generators.

Because power is needed when all other generation is at or near max capacity and when fuel (whether that be natural gas, sun and/or wind) is restricted or unavailable power has to come from a source that can be “dispatched”—coal, oil or pumped storage (hydro) .

Nuclear Power is emissions free and is a highly reliable workhouse that operates at very high capacity factors. But nuclear plants have been expensive to build, in part because of regulations and court cases brought by activists. Environmental activists have successfully restricted the supply of nuclear power in New England by using activism and legal challenges to prevent the creation of new reactors and to get existing ones shut down.

Natural gas, which burns cleaner than coal, might be able to fill the gap on peak demand days. But as ISO New England has pointed out for years, supply and storage constraints make this risky.

Natural gas plants rely on just-in-time delivery of gas. As mentioned above, environmental activists have successfully blocked the pipelines, import terminals and storage facilities that would make natural gas a viable replacement for coal for emergency power. This shortage makes it too risky to rely solely on natural gas as a backup source during periods of peak winter demand.

In general, natural gas is cheaper than coal as an everyday fuel source, thanks to fracking (which environmental activists also oppose). But on very cold winter days and in late summer heat, when natural gas is in high demand, prices rise, and coal becomes competitive on the market.

Wind and solar power operate approximately 30% and 15% of the time because they require favorable weather conditions which are often unpredictable. Without massive storage capacity, which is very expensive and not practicable for large-scale deployment, wind and solar aren’t capable of being dispatched to respond when the grid is stressed.

Coal can be stored on site in large quantities cheaply. With a shortage of other storable, reliable backup fuels, coal can be used in a pinch. That’s exactly how the Merrimack Station plant is being used.

The grid operator is charged with ensuring both reliability and market efficiency. That makes coal a go-to source of backup power for the few days a year in which natural gas supplies are being diverted from electricity generators to home heating. The grid operator essentially accepts higher carbon emissions for a few days a year for the purpose of ensuring that power is available.

That tradeoff is at the heart of the issue. The activists prioritize emissions over all else. They don’t accept the tradeoff. But their position is extremely risky and costly.

The power grid operator prioritizes reliability over emissions for good reason. It saves lives.

If New Englanders were asked whether they’d be willing to trade a few days’ a year worth of higher carbon emissions for a guarantee that they don’t run out of power on the coldest winter and hottest summer days, most would probably say yes without hesitation.

Radical environmental activists already have made clear that they don’t accept this tradeoff. They might not care that the tradeoff actually involves a higher risk of blackouts. But the grid operator does and is committed to hedging against that risk.

Given the alternatives, isn’t hedging against the risk of blackouts the more morally serious and responsible position?

That brings us back to the question at the beginning.

Do radical green activists really have the morally superior position here?

The answer is pretty clearly no.

It’s not an ideal tradeoff, but given the limited options available, keeping the state’s last coal plant open to ensure that people don’t freeze in winter or overheat in summer is not the unreasonable or radical position.

Those who would risk winter and summer power outages to achieve an insignificant reduction in carbon emissions should be treated with at least the same skepticism as those who want to keep power readily available.

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Why are we still debating school openings?

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President Biden on March 2 announced a goal of administering at least one vaccine to every educator in the United States by the end of the month. The head of the American Federation of Teachers praised the announcement, saying, “vaccinations are a key ingredient to reopening schools safely.”

But that’s not true. 

A vast and growing body of scientific data show that schools are not major sources of COVID-19 transmission and that neither students nor teachers are at high risk of contracting the coronavirus in school buildings. 

We listed many of these studies when we wrote about this issue in January. In February, the Centers for Disease Control and Prevention issued guidance for safely reopening schools. That guidance listed three essential elements of safe reopening. Teacher vaccination was not on the list. It was included in a second list of suggestions for “additional layers” of prevention.

The New York Times summarized the CDC guidance this way: 

“With proper mitigation, such as masking, physical distancing and hygiene, elementary schools can operate in person at any level of community virus transmission, the guidelines state.

“The document says that middle and high schools can safely operate in person at all but the highest level of transmission, which is defined in two ways: when 10 percent or more of the coronavirus tests in a community come back positive over a seven-day period; or when there are 100 or more virus cases per 100,000 people in the community over seven days.

“Middle and high schools may open at any level of community spread if they conduct weekly coronavirus testing of students and staff members.”

The reason vaccination is not on the list of essential reopening elements is because 1) transmission in schools has proven to be very low, and 2) teachers as a group are not at high risk of infection. 

Aa we pointed out in January:

  • A British Medical Journal study of occupational risk by sector found that workers in the education sector had much lower risk of COVID-19 exposure than health care, medical support, and social care workers, and slightly lower risk than transportation workers. It should be noted that British public schools have mostly been open, unlike American public schools.
  • An occupational risk tool designed by the Vancouver School of Economics put Canada’s education sector in the medium risk category for COVID-19 exposure.

The evidence is so overwhelmingly in favor of school reopening that epidemiologists, infectious disease experts, doctors, and medical professors have been pointedly and urgently insisting that schools should reopen. 

They’ve even begun to publicly criticize teachers’ unions and politicians for ignoring the science in an effort to keep schools closed. 

Benjamin Linas, a professor of epidemiology at Boston University School of Medicine, wrote in Vox in February that he’s “losing patience with our teachers’ unions.”

Frustrated by the politicization of school openings, he wrote that “if educators and their unions don’t embrace the established science, they risk continuing to widen gaps in educational attainment — and losing the support of their many long-time allies, like me.”

On the same day President Biden announced that he would push for teacher vaccinations, The New York Times published quotes from a survey it conducted of 175 health experts regarding school openings.

“Over all, they said that data suggests that with precautions, particularly masks, the risk of in-school transmission is low for both children and adults,” the Times reported.

Among the quotes:

“We need to rely on science and not emotions to make these decisions. Expert guidance can get our children back to school safely. Keeping them out of school will result in irreparable harm to their education, particularly for minority children and those from lower socioeconomic backgrounds.”

— Archana Chatterjee, Dean, Chicago Medical School

“I wish that school reopening wasn’t subject to such politicization and fear, and that decisions could be made based on data and facts. Data would suggest that children, particularly younger children, can safely go to school, and that neither the children nor the teachers are at particularly higher risk.”

— Anne Blaschke, Associate Professor of Pediatrics and Pediatric Infectious Diseases, University of Utah

“This issue has been politicized, and the unions have inappropriately focused on fear and misinformation. San Francisco public schools could have been successfully reopened in August had the district, unions and others come together to support children.”

— Kim Newell Green, Pediatrician; Associate Clinical Professor, University of California, San Francisco

In Canada, the UK, Michigan, Southern California, Northern California, Colorado, and the United States as a whole, doctors have urged governments to reopen schools. The World Health Organization declared back in December that “schools can reopen safely.”

Yet it’s March and many students remain stuck in remote instruction for at least a portion of their school week.

All of New Hampshire’s neighboring states have moved teachers up the priority list for vaccinations, and there is some mild political pressure from the far left for Gov. Chris Sununu to do the same. This week, he refused, and stuck to his program to prioritize vaccines for the elderly and most vulnerable. 

Sununu’s position is quite obviously the correct one, as it’s the only one focused on protecting the most vulnerable residents first, and the only one backed by the overwhelming consensus of medical science. 

No major health organization has concluded that school personnel or students must be vaccinated before schools can open safely. No study has found that school personnel or students are at high risk of infection in schools. No study has found high rates of COVID-19 transmission in schools. 

The CDC recommendation that teachers be put into Phase 1b is not backed by any research showing teachers to be at high risk, and it contradicts the CDC’s February guidance that teacher vaccinations are not an essential element of reopening. The placement in Phase 1b is not based on risk, but purely on the classification of all educational personnel as “essential workers.” 

Of course, it goes without saying that educational personnel who are age 65 or older, or who qualify for vaccination because of underlying health conditions, are vaccine eligible already based on their risk.

There is overwhelming agreement in the medical community that schools can reopen safely with basic mitigation protocols in place, and that vaccinations for returning staff and students are not a necessary precondition for reopening. 

The medical debate is over, and has been for a while. All that lingers is a political debate that becomes further detached from reality with every passing week.  

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Spending restraint, stable tax base, strong economy save budget from worst 2020 fears

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Coming out of 2020, New Hampshire is in better financial shape that many other states thanks to a sound revenue structure, relatively restrained spending, a strong economy, and good management, concludes a new report from the Josiah Bartlett Center for Public Policy and the Economic Research Center at The Buckeye Institute. 

“Restrained state spending, a stable tax base and a strong economy let New Hampshire weather the pandemic better than many other states did,” Josiah Bartlett Center President Andrew Cline said. “Going forward, it’s important that New Hampshire maintains this fundamentally sound position.”

While some other states had to take drastic measures to balance their budgets, New Hampshire appears likely to end the current budget cycle with a surplus while avoiding tax rate increases or large cuts to core programs.

The state’s projected budget deficit for the current fiscal year fell from $319 million in May of 2020 to just $29.8 million in February of 2021.

Because New Hampshire does not rely on relatively unstable sales and income taxes, it did not suffer the scale of revenue loss seen in many other states. For the pandemic-affected months, state revenue was down only $31 million, or 1.3%, from the prior year. 

The majority of that decline occurred during the economic shutdown last spring. Once restrictions were lifted and people felt safer going out, the economy began to recover. State revenues have come in ahead of budget projections every month since August of 2020. 

On the spending side, New Hampshire was already in a good financial position when the pandemic hit. The state entered the pandemic with a projected a budget surplus of $27.1 million for the end of the 2020 fiscal year, and $115 million in its rainy day fund. 

The governor’s imposition of cost savings measures in response to projected revenue losses, and his vetoes of tax and spending increases that would have weakened the state’s economy, helped the state’s recovery.   

As legislators get to work on the next state budget, New Hampshire is in an enviable position. A combination of spending restraint, a reliable tax base, and a strong economy limited the damage done to the state budget by the pandemic. 

The current projected budget deficit of $29.8 million is easily covered by savings wisely socked away in the state’s rainy day fund over the past few budget cycles. But that probably won’t be necessary. Revenue trends suggest that the gap is likely to be covered entirely by additional revenues.

New Hampshire’s experience during the pandemic showed the value of budgetary restraint and sound financial management. State officials should continue to find ways to cut government spending or make it more efficient so that New Hampshire can avoid debilitating tax increases and maintain its low-tax environment moving forward, the report concludes.

The report was written by Logan Kolas, an economic policy analyst with the Economic Research Center at The Buckeye Institute. The full report can be read here: New Hampshire’s Economic Recovery-Better Than Expected. 

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The forgotten children need school choice

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By Shalimar Encarnacion

I am a mother of three (now adults) from Manchester, a former co-chair of the Manchester NAACP Education Committee, and a supporter of school choice. Let me tell you why.

As a Hispanic leader of color in my community, I’ve seen firsthand how many of our communities don’t have equal access to educational resources.  Today, people talk a lot about diversity, equity and inclusion. Those need to be goals in our educational system as well. Too often, the system falls short.

School choice would offer a huge step forward. It would help achieve our diversity, equity, and inclusion goals by removing barriers so our kids can reach their potential.

It would help students to succeed by letting parents put educational resources to use in the way that would best meet their child’s individual learning needs.

My path for parent advocacy in this area started when my children were having difficulty in school. Though all three of my children had childhood illnesses, such as multiple sclerosis and cancer, I want to talk about my youngest, Angel, who incidentally just so happens to also have a dark skin complexion.

Angel was always struggling. He’s very high functioning on the autism spectrum, which went undiagnosed until he was nine. He has ADHD as well and is prone to severe migraines. He started with an Individualized Education Plan (IEP) in third grade, and was later downgraded to a 504 plan in high school.

In sixth grade, he was having lots of difficulty at our local public school. When he started at the middle school, we told them about the situation and asked if they could accommodate him. They said no to our requests, and they repeatedly refused many ideas that would align with his IEP.

He would always end up having problems with the teachers and the environment. The stress would trigger his migraines and cause him a lot of anxiety, which would have him acting out of his normal behaviors. The school’s repeated response to this was to give him in-school suspensions.

His father and I pulled him from that school. With help from the Children’s Scholarship Fund, we were able to put him in St. Casimir’s. He was there in eighth grade and he did amazingly well.  It was a night-and-day difference for him.

He begged us to never send him back to public school.

But after his father took on a new job with a higher income, we no longer qualified for the amount of scholarship that made it possible for us to move him to the private high school.

Had education freedom accounts been around then, we would have been able to use our state per-pupil education money to bridge the gap between what we could afford and what we needed to send him to a high school that would meet his needs.

But those accounts don’t exist. So today, Angel is back in the public school, where he is repeating his senior year. He is struggling.

I like saying that these things don’t have to be looked at as either/or propositions. We should look to these solutions from a both/and perspective.

Public schools don’t work for everyone, the same way private schools don’t work for everyone. Everywhere you turn, there are so many choices. Yet k-12 public education doesn’t offer all students the choices that work best for them.

We should make it possible for parents to choose what works best for their child.

I’ve spoken with multiple families who say that a choice program such as education freedom accounts would help them a lot. I know families that are struggling to pay for private school out of pocket because they don’t qualify for scholarships.

A school choice option such as an education freedom account would let parents put that money toward tuition, tutoring, tech training, special education services, college-level courses, online education, or even tuition at another public school. It would give families the ability to choose the education that works best for their children and not be stuck with whatever service their district school offers, regardless of whether it works for their child.

School choice is for the children. It is the only way to provide the best option for each individual child. It is about equity and inclusion for all, especially for students from communities of color. It’s important that you can see it through that lens. The system is full of forgotten children. We can’t keep denying them options.

Shalimar Encarnacion is a mother of three from Manchester.

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The education choice moment

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(Editor’s note: In the original post, some charts pulled school district spending data from a different data set that covered a shorter time span than the staff and enrollment data. The spending increases therefore appeared smaller than they actually were. The charts have been corrected so that all data cover 1995-2018.)

 

“I think that eventually school choice is going to be part of education.”

Those were the words of Democratic state Rep. Barbara Shaw of Manchester, as she voted in the House Education Committee on Thursday to retain House Speaker Sherm Packard’s Education Freedom Accounts bill. 

Problems with a redrafted version of the bill caused the chairman to recommend retention rather than trying to move forward with a flawed bill.

Shaw is a bellwether representative on the issue of school choice. A career public school educator with a master’s degree in education administration, Shaw has decades of experience in public schools in New Hampshire. In 2018, she voted on first reading to pass SB 193, the initial Education Freedom Savings Accounts bill. 

She supports giving families more educational choices, a change she believes is inevitable. But as she said on Thursday, getting the details right is the key to creating a choice program for New Hampshire.

Shaw’s prediction is noteworthy in part because it comes from her, and in part because it reflects a growing recognition that educational choice has reached a saturation point in the broader culture. 

In 2018, UNH polled Granite Staters about the Education Freedom Accounts bill. It found that 55% of voters supported Education Freedom Accounts, and 60% of registered independents did. Even 44% of Democrats supported it.

EdChoice polled New Hampshire recently and found that when Granite Staters are told what Education Freedom Accounts are, 70% support them. 

Then there is parental experience with schooling during the pandemic. This school year has given middle-and upper-income families whose children generally do well in school a taste of what it’s like for families whose children struggle in a traditional school environment.

Local public schools serve many students very well. But there are always students who don’t fit into the system. Those from higher-income families have always had the option to move to another district or choose another type of school. But for many families, particularly those at the lower ends of the income distribution, options are very limited. Many wind up stuck in a school that doesn’t work well for them. 

Average Americans who may never have thought about school choice before now think the system needs to change. 

A national poll conducted monthly for the National Parents Union since the start of this school year reflects the change. A majority of parents say schools should not return to normal after the pandemic, but “should be focused on rethinking how we educate students….”

It’s easy to understand why the pandemic pushed this shift in thinking. In addition to the frustrations of dealing with whatever option the local school district has offered, parents are taxpayers too,. They can see that in many cases they’ve paid more every year without getting corresponding increases in services. 

Nashua, where parents have initiated a recall of school board members over remote instruction, is a good example.

From 1995-2018 real, inflation-adjusted spending per-pupil in the Nashua School District rose by 68% while student enrollment declined by 10%.

Moreover, Nashua continued to hire more staff while educating fewer students. Total staff increased by 25%. Teaching staff increased by 17% and non-teaching staff increased by 35%.

 

It’s a similar story in Manchester, where the superintendent has recommended closing one school and the city might close more because of declining enrollment. 

In the Queen City, enrollment declined by 13% from 1995-2018 while real per-pupil spending increased by 68%. Total staff increased by 25%. Teaching staff increased by 16% and non-teaching staff increased by 41%.

Parents are at a breaking point. As our culture has shifted to on-demand, a-la-carte service for almost everything, education continues to behave like a regulated monopoly, charging higher prices every year without offering much in the way of additional options tailored to fit individual needs. 

Parents have grown increasingly frustrated with a system that has been slow to adapt to changing needs. Now those needs are urgent for a much larger percentage of children than usual.

Parents aren’t willing to wait any longer. And the broader public agrees that children should not have to keep waiting.

School choice programs already operate in 29 states, the District of Columbia, and Puerto Rico. Polls show they have majority support. They are not fringe or extreme. They’re what Americans — and Granite Staters — want. 

Rep. Shaw was right. Choice is coming. It’s just a matter of when and how. 

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Governor’s 2022-23 budget cuts general fund spending for first time in decade

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Gov. Chris Sununu’s proposed 2022-23 state budget cuts state general and education trust fund spending for the first time in a decade.

Strangely, this generally was not the big story in media coverage of the budget.

But it is a big story — because reductions in state spending are extremely rare.

Comparing the governor’s proposal to the current two-year budget, the governor’s plan represents a decrease in budgeted state general and education spending (not total spending — more on that later). That would be the first reduction since the 2012-2013 budget. 

How much of a decrease depends on what baseline you use. 

The governor’s budget summary shows a general and education fund spending reduction of $40.4 million, or about 0.7%. 

That’s based on actual 2020 spending and authorized (budgeted) 2021 spending. (The 2021 fiscal year ends at the end of June, so we don’t have actual spending for the year yet.) 

What the state actually spends in a fiscal year is not the same as what the state budgeted for that fiscal year. Typically, the governor manages spending so that some money is left over at the end of the year. 

In response to the pandemic, Gov. Sununu got quite aggressive about saving money, as revenues were projected to crater throughout much of 2020. 

Comparing the governor’s budget to the 2020-21 budget, the governor’s general and education spending is lower by $108 million. 

Such a savings from one budget to the next is highly unusual. Only twice since World War II has a state budget been lower than the previous budget.

Actual spending is a different story. With 4.5 months left in the fiscal year, it’s possible that the governor’s budget will spend more in general and education funds in 2022-23 than the state spent in 2020-21. We’ll have to see how the rest of this fiscal year works out. 

If you haven’t had enough caveats, here’s another. 

The budget was released Thursday and we haven’t gone through it line by line. We are looking at bottom-line totals. Perhaps a closer inspection will find details that produce… more caveats.

But looking at the bottom lines for budgeted general and education fund spending, this proposal represents a savings to state taxpayers.  

This will be confusing if you’ve seen stories that report higher spending in the proposed budget. That’s because total spending includes federal money and therefore is much larger than general and education fund spending.

Basically, the general and education funds spend money raised in New Hampshire from Granite Staters. The total state budget includes billions of dollars in federal funds.

The governor’s budget increases total spending by $712 million, or $5.6%, to $13.36 billion. 

The last time total spending went down was also in the 2012-13 budget. In that budget, led by then-House Speaker Bill O’Brien, general fund spending decreased by $536 million, or 18%, and total spending decreased by $1.2 billion, or 11%.

There’s much more to cover in this budget, of course. The governor proposed some substantial reorganizations of several state bureaucracies (including all of higher education), tax cuts (including phasing out the interest and dividends tax), a large increase in health and human services funding, and much more. We’ll do deeper dives later.

For now, the big initial takeaway is the unusual reduction in state taxpayer-financed spending.

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Manchester needs more economic growth

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Grappling with the consequences of a long and steady decline in students, the Manchester School District this week released plans to close the city’s oldest school, Hallsville Elementary. A consultant has recommended closing three other schools. 

In the short term, city leaders are going to have to make difficult choices, many of which have been put off for decades. 

In the long term, there is only one real solution: faster economic growth.

The problems that led to this unfortunate situation were caused in part by demographic changes. A cultural shift away from large families has driven a steady decline in child-bearing, and the long-term graying of New Hampshire’s population has shrunk school classrooms and drained communities of energy. 

Yet these are not the sole cause of the city’s woes. Poor policymaking has made manageable problems worse. 

For starters, as public school enrollment fell, school district spending continued to rise. 

From the 2009-2010 school year to the 2019-20 school year, Manchester’s public school enrollment fell by 2,595 students, a 16.4% decline, state enrollment reports show.  

But during that same time period, the school district budget grew by 22.8 million, a 14.6% increase, city budget documents reveal.

In the 2019-20 school year, Manchester taxpayers spent $22.8 million more to educate 2,595 fewer students than they did in the 2009-10 school year. 

That’s not a good deal for taxpayers. 

And the problems don’t end there. 

The city’s sluggish population growth has contributed to a stagnating tax base and a shrinking school population.

From 2000-2020, the city’s population grew by roughly 5,600 people, or about 5.3%, U.S. Census data show. (The 2020 figures are estimates.) By contrast, New Hampshire’s population grew at nearly twice that rate during the same years.

The city’s growth rate in the last 20 years represented a sharp decline from the previous 20-year period. From 1980-2000, the city’s population grew by 16,070, or 17.6%. 

The city’s growth rate is regressing to its pre-1980s doldrums. 

From 1960-1980, Manchester’s population grew by only 2,654, or 3%. In the 1960s, it actually shrank. 

Manchester has struggled for years to attract more residents. One reason can be found in the city’s housing restrictions. Regulations make it extremely difficult to build new homes, particular multi-family housing that is attractive to young couples. 

New apartment complexes are routinely opposed by city officials, who deny approvals on the false claim that new apartments will cause overcrowded schools, as if the city’s schools would be hurt, not helped, by increased enrollments. 

Relatively high taxes are another contributor. Manchester’s property tax rate of 24.66 is higher than the rates in Derry, Hollis, Hooksett, Litchfield, Londonderry, Merrimack. Nashua, Portsmouth, and Windham. 

One reason for these higher rates is, again, the difficulty in building within the city. Londonderry, generally considered a more growth-friendly community, has gained from Manchester’s general hostility to new construction. 

And a general dissatisfaction with school options has driven many families into neighboring communities, such as Bedford and Hooksett, or towns a bit farther away, such as Londonderry. 

All of these problems are linked in a way that might not be obvious if you are in charge of only one policy area — say, schools, or roads. They’re all tied to the city’s sluggish growth. 

Economic growth leads to population growth, a rising tax base, a vibrant culture, and rising government revenues. 

Without growth, a city experiences stasis or decline. Manchester’s growth is happening at such a low rate, it’s constraining the city’s ability to manage its infrastructure. 

Policies that encourage greater population and economic growth would help Manchester get out of its current predicament. And those policies have to be pursued consciously. Growth can be cultivated. 

But too often growth is taken for granted, and public officials ignore warnings that their policies will put it in jeopardy. Today, Manchester is dealing with the results of such poor decision-making. 

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