In what Hanover Town Manager Julia Griffin deems the biggest issue New Hampshire has tackled in years, the Governor and state legislature are currently struggling to find a constitutional and equitable source of funding for the state's public schools.
For years, local property taxes had provided the monies for New Hampshire's public education.
Yet a 1997 state Supreme Court decision, currently contested by the state's Republican leadership, ruled that such a method of funding was inequitable and unconstitutional.
While in the years since the legislature developed interim solutions to the funding problem, the legislature is now under pressure to develop a long-term plan by session's end in June.
And on February 8, Democratic Governor Jeanne Shaheen announced her plan -- EXCEL New Hampshire -- to fund public education.
Calling her plan "a solution that will keep our economy strong and prepare our students for the future," Shaheen's proposal includes a 2.5 percent statewide sales tax and $4.90 (per $1,000) property tax.
The plan also holds school districts to statewide performance standards and includes literacy and early learning initiatives.
"All our children, no matter where they live, need a good education," Shaheen said in a press release.
Yet Shaheen's plan is not without controversy. Whether or not Shaheen's proposed statewide property tax is even constitutional is currently being debated by the state's Supreme Court.
The plan also now faces competition from an alternative plan announced on the 13th by a bipartisan group of legislators, including state Sen. Clifton Below '78 D -- Leb.
Introduced as the Below-Hager-Fernald plan, the proposal includes a 3.3 percent income tax, which its supporters see as the fairest solution to the current educational funding crisis.
A similar plan was introduced to the legislature several years ago, yet was stalled when Governor Shaheen promised to veto any bill proposing an income tax.
However, many believe that this time around Shaheen might agree to sign such a bill.
But both Shaheen's plan and the Belows-Hager-Fernald plan face opposition from the legislature's Republican majority, which would like to fund education only by redirecting revenue from various taxes the state already collects.
However, such a redirection of revenue would result in municipalities losing money. For example, Hanover would lose approximately $83,000 each year in business revenue under such a plan, and larger communities would face even greater loses, according to Griffin.
According to Below, the Republican proposal is simply "refusing to deal with the problem," and is "irresponsible" given the state's already tight budget.
House Representative Hilda Sokol D-Hanover sees the Republicans as "undermining the efforts we're doing to get some sort of equitable tax.
The town of Hanover, however, has yet to take any official position in support of any particular proposal, Griffin said.
However, the town actively opposes the state's current method of assessing property taxes, and is involved in the litigation protesting its constitutionality, Griffin added.
Many New Hampshire communities, including Hanover, are fighting for a statewide re-evaluation of how state property taxes are assessed.
As a property-rich community, Hanover gives to the state much more money in property taxes than it receives back from the state for its schools.
Only 20 percent of the state's 250 communities are "donor" communities like Hanover, but such communities don't appreciate having their taxes re-distributed by the state to communities that are not required to spend the funds on education, Griffin said. Should the court rule in its March 15 decision that there is no constitutional method of assessing a statewide property tax, Shaheen's plan would no longer be a viable option, Griffin explained.
"A lot will ride on the Supreme Court's decision," on whether or not a constitutional property tax can be developed, Griffin said.
Thus, the legislature can take little concrete action between now and mid-March, other than investigating different options and drumming up support for their proposals, Griffin said.
Many legislatures remain doubtful they can reach a funding agreement by the session's end in June, according to Griffin.
Yet if a settlement cannot be reached, not only will the state's bond rating go down -- costing the government more money in its interest payments -- but the economy of the state and its communities will be destabilized.
"Putting off the hard choices until another year will not make this challenge go away or make it any easier to resolve," Shaheen said in her press release.
"It's a mess, and we've got to solve it," or it's going to become an even bigger problem, Sokol added.
Griffin agreed that the state must develop a comprehensive plan "once and for all" and not merely implement another "band-aid" solution.
Yet agreeing on such a solution is "going to be a very interesting, wild ride," she noted.
