Coalition Communities 2.0

About

On February 3, 2021, the Lebanon City Council authorized the City Manager to execute all documents relative to enter into the Memorandum of Understanding for Professional Services Between the Coalition Communities 2.0 as presented in the February 3, 2021 City Council Agenda Packet.

Background

The City of Portsmouth is working with other municipalities to advocate in regard to proposed statutory changes for the distribution of Statewide Education Property Tax (SWEPT). On December 1, 2020, The Commission to Study School Funding issued its findings and recommendations.  The commission proposed a model that would re-distribute SWEPT revenue to school districts based upon need as defined by statute.  The commission determined that there is sufficient funding being raised through taxation in New Hampshire and that the distribution of that funding was the issue.  

Project Manager Paul Deschaine who works for the Town of Newington utilized the model created by the study using 2018 data showing a theoretical distribution of SWEPT (2021-01-04 Simplified AIR Model Rev. Est).  This would bring back the concept of “donor” towns.  In this scenario, municipalities such as Lebanon would be remitting SWEPT revenues to the State for distribution to other communities to subsidize the cost of public education. In order to implement the model created by the study, several pieces of legislation are now or will be shortly before the Legislature for consideration.  

HB 504 would implement several of the provisions of the model.  This legislation would require municipalities to remit what would be referred to as excess SWEPT to the NH Department of Revenue Administration for distribution in the form of grants to school districts across the state based upon need.   Paul has provided a calculation based upon assumptions in this particular bill (Calculation Impact of HB 504).   

The City of Portsmouth, through its City Council, approved the “Memorandum of Understanding for Professional Services Between the Coalition Communities 2.0” on January 25, 2021. The purpose of this agreement is to create a coalition of communities that would be adversely affected by the return of “donor” towns.  The City of Portsmouth was part of a previous coalition named the Claremont Coalition. There are still funds remaining in the accounts for this coalition which successfully opposed the practice of “donor” towns in the past.  

This reconstituted coalition opposes the use of the broad-based property tax (SWEPT) to redistribute revenue from some communities to other communities intended to resolve the education funding issue in our state. There are many concerns about the proposed model developed by the recent legislative study. The feeling of the municipalities involved is that a more comprehensive study should be conducted looking at all other sources of funding to address this issue instead of focusing solely on SWEPT.  

The Memorandum of Understanding (MOU) would assess the costs to participating members to hire a lobbying firm to advocate on behalf of the coalition, as well as other professional services such as actuarial and legal services to achieve the objectives of the coalition.  

 The concern for the City is relative to the potential of large sums of property tax dollars raised in the City may, depending upon the final form of proposed legislation be transferred out of the City for use by other school districts.  Some of the communities that stand to gain from the property tax revenues raised by the City of Lebanon are the Towns of Bedford and Londonderry. There are questions as to whether these two municipalities are “needy” or “property-poor” regarding education funding.