Home > Uncategorized > The “Downshifting Dilemma” Described for New Hampshire Residents is a National Phenomenon

The “Downshifting Dilemma” Described for New Hampshire Residents is a National Phenomenon

July 1, 2019

For decades public school administrators and school board members have hit their heads against the wall trying to explain to property owners that every tax cut that occurs at the Federal and State level has an adverse impact on local property taxes… and as a a result the most regressive and inequitable tax of all has the highest burden.

In New Hampshire this legislative session, the Democrats who controlled the House and Senate approved a budget that shifted the tax burden away from property taxes. Alas, the GOP Governor, Chris Sununu, vetoed the bill. The results of the veto were described in a Advancing New Hampshire Public Education (ANHPE) blog post as follows:

As you may have heard, on Friday Governor Sununu vetoed the budget proposed by the Committee of Conference (“CofC”), which had passed the House and Senate on purely party lines.  Unfortunately, this means that everything the CofC put in the budget is back on the table and potentially on the chopping block – including the $138 million in new school aid and $40 M in municipal aid that districts and towns were hoping to see.  The veto leaves school districts in a quandary as they make staffing and other decisions for the school year ahead.

The quandary they face is that IF they proceed to implement the budgets they adopted this Spring in anticipation of some consistent level of funding they could end up shifting the more of the cost for operating schools onto the shoulders of taxpayers since the continuing resolution passed to keep the State government operational includes a 4% CUT to state funds. 2/3 of the districts in the state face this dilemma… and the property poor districts, who have the most to gain from the passage of the funding, have the most to lose as a result. And here’s the kicker: voters in those districts who stand to lose the most often fail to recognize that the tax limitations they seek at the State level translate into higher property taxes. ANHPE describes this as “the downshifting dilemma”:

The Governor has justified his veto in part by saying that he doesn’t want to raise taxes on businesses.  Those who crafted the CofC budget dispute this characterization and argue that they’re simply blocking an additional decrease in business profits taxes, which were already reduced last year.  Whichever way you view it, the fact remains that the State’s chronic underfunding of schools results in a downshifting of costs to the local level, leaving property taxpayers to pick up the tab.  When districts take an additional hit (like the 4% reduction in stabilization funding), property taxes will most likely rise.

But this kind of downshifting is not limited to the New Hampshire. The federal special education law has NEVER been fully funded. That means that State’s have been asked to cover the difference in the federal funds promised to implement the mandate for special education and the federal funds allocated for that purpose. Here’s an excerpt from a cover letter to a February 2018 report by the National Council on Disability (NCD) describing how this shifts costs downward:

Over the past 42 years, the Federal Government has recognized and supported this right through providing billions of dollars in special education funding to assist the states in meeting their responsibilities in this area. NCD has repeatedly called on Congress to fully fund IDEA. The Federal Government’s failure to meet its promised funding obligation has stressed many state and local budgets to the point where many districts routinely struggle to meet student needs. In 1975, Congress promised to cover 40 percent of the average cost to educate a child with disabilities. Congress later amended the law to say that the Federal Government would pay a “maximum” of 40 percent of per-pupil costs. Today, the Federal Government pays less than half of what it originally promised in 1975.

And what happens when a state or school district does not get the funding promised at the federal level? They need to look elsewhere for cuts because special education funding is mandatory. Here’s how the NCD report describes what happens:

The lack of federal support to meet the original commitment Congress made to meet the excess cost of special education places considerable pressure on state and local budgets, resulting in a range of actions including:

  • ■  One state placing an illegal cap on IDEA identi cation of students
  • ■  Districts and schools limiting hiring of personnel and providers, which contributes to high turnover and shortages in the eld
  • ■  Districts and schools restricting service hours
  • ■  Districts and schools reducing or eliminating other general programs

In effect, we are willing to diminish and/or compromise services and standards to special education students or reduce services and standards to ALL students in order to avoid paying higher taxes.

But special education is not the only place where FEDERAL cuts result in downshifting. If federal spending is reduced in roads, or oversight of environmental regulations, or oversight of consumer safety, the needs associated with those expenditures do not disappear… and the costs for those expenditures face the same pressures.

Would we want to loosen our safety standards for roads, the environment, or consumer safety in order to save money? I fear that we are heating an affirmative answer to that question at all levels of government… and I fear that our quality of life is diminishing as a result of the affirmative answer we are hearing.

 

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