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Andrew Cline has been editorial page editor of the New Hampshire Union Leader since October of 2001. His writing has appeared in more than 100 newspapers and magazines, including The Wall Street Journal, The Washington Post, and National Review.Eugene Van Loan III: Donor towns are coming back
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Reader commentsAlthough Gov. John Lynch has seldom used the threat of a veto as a way of securing meaningful executive branch participation in the legislative process, he did so last year. He threatened to veto any bill that proposed to fund the cost of an adequate education with a tax that resulted in the creation of so-called "donor towns."
Donor towns are municipalities that collect more money from the statewide property tax than it costs them to provide an adequate education to their own students. The state requires such towns and cities to send the "surplus"to Concord to be redistributed to other municipalities. This, of course, is a classic rob-Peter-to-pay-Paul scheme, and the governor rightly opposed it.
As things turned out, the Legislature did pass a bill in the 2008 session -- SB 539 -- that requires the state to fully fund the cost of "adequacy,"and the governor did not veto it. (On the other hand, he also did not sign it because he still favored a constitutional amendment to restore New Hampshire's tradition of local control over education policy and funding. The governor, to his credit, simply let the time expire within which he could veto SB 539, and the bill became law without his express approval.)
So, that should mean that there will be no donor towns, right? Wrong!
SB 539 did create donor towns. However, in a separate piece of legislation (SB 530) -- presumably designed to prevent a gubernatorial veto of SB 539 -- the obligation of donor towns to send their excess tax collections to Concord was suspended so long as they used the money to pay for the education of their own students (i.e., for costs beyond adequacy).
So, all is well, right? Wrong again!
The suspension lasts for only two years and then it self-destructs. In other words, there are no donor towns today -- but there will be tomorrow.
No one in Concord is talking about this dirty little secret. Have you seen any list of prospective donor towns? Not likely. However, anyone can find out which towns will be on the list by going to the Department of Education's Web site and pulling up the spreadsheet on state aid to education. If one does the calculations (and assuming my math is correct -- which is a dangerous assumption to make about a lawyer), there are 36 towns that are being temporarily spared the executioner's blade.
They are the usual suspects, the property-rich waterfront towns like Moultonborough, New Castle and Rye, and the student-poor rural towns like Errol and Pittsburg.
But this is not the worst of it. For on the same date that the donor town reprieve is scheduled to expire (June 30, 2011), something else of consequence is going to happen in New Hampshire's education funding world. The federal stimulus program also expires.
Since the Legislature and the governor used $160 million in one-time stimulus money to plug a hole in the current biennium's education budget, the end of the federal program will leave us with future deficits of approximately $80 million per year.
So, where will we get the money? Assuming that a broad-based sales or income tax is still off the table, the Legislature will most likely "fix"the problem by increasing the statewide property tax. The net result of this, of course, will be to add even more municipalities to donor town rolls. (Some have projected that the final 2011 number will exceed 50, or about 20 percent of the state's municipalities. At least one of the new ones will surely be Portsmouth.)
Even this assumes that everything else will stay the same over the next two years, an assumption unlikely to hold true. Some existing transitional caps and grants will probably go away or be revised; serious inflation may rear its ugly head in the post-bailout economy; and -- if the Claremont plaintiffs have their way -- the court may get involved again in the determination of the cost of an adequate education.
Suffice it to say that none of these things is likely to decrease the state's need for money to finance education. On the contrary, in this arena, what goes up never comes down. This means that the statewide property tax will probably continue to go up, which, in turn, means that even more donor towns will be created.
Perhaps this would be tolerable if it made any sense. After all, we can all be convinced to give to a "worthy"cause. But would you like to know to whom the taxpayers of the donor towns will be sending their gifts? Try the taxpayers of Amherst, Bedford, Bow and Hollis, among others. Makes sense to me. I live in Bedford. So, thank God for dirty little secrets.
Eugene Van Loan III is an attorney in Manchester and chairman of the board of the Josiah Bartlett Center for Public Policy in Concord.
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YOUR COMMENTS
When it was first established, Bedford, one of the wealthiest towns in NH was a receiver town, while small under resourced towns like Franconia and Sugar Hill were donor towns. It was a great example of taking from the “have-nots”, and giving to the “haves”. How dumb was that?
Not as dumb as this. George Washington wanted to establish a national public education system. It never got any traction because the southern states didn’t want an educated society. The southern aristocracy thought it would threaten their hold on slavery. In 1810, over 80% of the public schools were in New England. Even locally funded public school was unpopular in the south.
George was a visionary, maybe even a “Socialist”? I guess his Blue Dog opponents were effective back then too.
- Gary Way, Bedford
If you can afford to live in New Castle or Rye you can afford to help a few students in Claremont or Lyndeborough. Long live donor towns!
- Jim, Manchester
Ladies and Gentemen,
Please read the comment from Spike of Brentwood. He has hit the nail on the head.
Before the Claremont decision was ratified, Bedford, along with other municipalities, fought hard against the education leveling tax. The "Rob Peter to pay Paul" would cause Bedford to be a "donor" town.
Because Bedford and other towns spent more money per pupil than less wealthy towns, why should they be punished?
The taxpayer could always vote yea or nea to higher school budgets. Instead, it was voted in favor to allow an outside entity(State of N.H.) to determine how much should be spent per pupil.
- Paul, Bedford
Wy not just called this "shared responsibility"? Thats the new politically correct way to say you are a socialist. People are much more capable of providing for themselves than we give them credit for. We hav much too much government intervention and social welfare, both of which cost rediculous amounts of money.
My wife and I moved to Derry three years ago knowing full well that our property taxes are high, but going mainly to education. That was a choice we made and through the state the taxes stay the same but the funding our taxes provide to Derry Schools is diminishing.
If recipient towns like Nashua want more money for their schools, thn they should raise their taxes. Its all too easy to spend someone else's money. Allow towns pay for their own education. This donor town stuff is just educational socialism.
- Michael Layon, Derry
NH currently has several income and sales taxes...
How about just taking it from the university system?
- John Edward Mercier, Belmont
The UL had "Leon" Trotsky and Kevin Lenin as readers of its web page .. coool. A budget is made up of two parts; spending, income. The liberals who want to take money from everyone love spending. The poor guy at the bottom wants some income. Education is as much a reflection of demographics as it is spending. Wash DC spends a fortune of education, but turns out Dunkin Donut makers. Why do O'Bama's kids go to "private school"? Because the public schools are a pit. Let's just admit it; some people of stupid, and they like being stupid, and their kids are stupid. Let's hear it for S T U P I D .. Three cheers for ignorance .. yes yes yes..
- tom, manchester,nh
The governor opposes it because he lives in Hopkinton which would most definately be a 'donor town'.
Apparently even he is sick and tired of ridiculous property taxes.
- Chris, Bow
Unfortunately, Leon, many "needs" are actually "wants". And I think charity should be done by individuals, not the state. Sad to see the vitrol comment. Everyone is entitled to their express their opinion, and just because it isn't the same as yours, doesn't make it vitrolic.
- john, dublin
Before anyone starts mentioning gambling as an income source; this from the Philadelphia Inquirer-today:
Three years ago, when the Mashantucket Pequot tribe put up $30 million to operate a slots parlor on the Delaware River, its name was synonymous with megaprofits from gaming.
Today, it means megaproblems.
The tribe, which has run the Foxwoods Casino in Ledyard, Conn., since 1992, is struggling with $2.3 billion in debt and facing such a bleak future that tribal leaders ousted their chairman on Tuesday
- J McNeal, Salem, New Hampshire
There's an easier solution - vote out the ignorance that caused our budget to become a fail in the first place. John Lynch, and a few overly greedy politicians.
- Jonathan, Bedford
ANY state law that equalizes school funding, if it has any real effect, must take from one town and give to another town. Unless you EFFECTIVELY stand against the "adequate education" con job, you are endorsing the concept of donor towns. Public-employee unions want this to happen, because the more you separate the taxing decisions from the spending decisions, the more control you take from local officials, the easier it is to seize money from strangers with impunity.
For Leon, a new tax is always "an easy solution." Why? He is a Marxist. He quotes Karl Marx ("From each according to their means to each according to their needs.") as my Congresswoman does too, because she is a Marxist. In practice, this works out to: "From each according to his achievement, to each according to his excuse-making." As always, the damage to our national character is more grievous than the money seized and squandered.
- Spike, Brentwood NH
Why not just add an extra tax on baby boomers pay (those that are still working). And also, a special tax on baby boomers pensions. Baby boomers are the ones that allowed the country to become this progressive cesspool. So they should be the ones to pay for the progressive indoctrination of our children in the public schools. It is only far, in the name of diversity.
- Kevin, Portsmouth, NH
Leon-
Why an income tax? If any broad base tax is considered, why not a sales tax?
At least then everyone would pay their "fair share", including those on the public dole, on social security, those receiving pensions, all those workers being paid off the books including illegal immigrants, and all those shoppers from out of state.
- Cathie, Chester
Hey Leon,
It isn't hard to be more "right-wing" than someone who approvingly quotes Karl Marx.
- Rich, Manchester
Eugene
There is any easy solution. One used the world over by communities living in the 21st Century (rather than the 19th) - it is called an income tax.
From each according to their means to each according to their needs.
Of course, here we are still trying to persuade people the world isn't flat and the sun doesn't revolve around New Hampshire.
Cue right wing vitriol.
- Leon, Manchester
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