State Adequacy Aid Funding
Adequacy is New Hampshire's primary state funding formula. New Hampshire has three versions of the adequacy formula: 1) Traditional District Public School Adequacy; 2) Charter Public School Adequacy; and 3) Education Freedom Account Adequacy. The Bureau of School Finance oversees adequacy funding for districts and charter public schools.
State Adequacy Aid Calculation for Traditional Public Schools
The State provides funding for school districts to fulfill its constitutional obligation to provide an adequate education, otherwise known as State Adequacy Aid. Adequacy Aid is calculated for each city, town, and unincorporated place with residents attending a publicly funded school. Not all communities operate schools, but each community is responsible for providing an education for its residents. Adequacy Aid is based on the average daily membership (ADM) of resident students as well as other factors. For each pupil within a municipality's ADM, a base amount of funding is provided, also known as base adequacy. In addition to base adequacy funding, communities are eligible to receive additional funding based on certain pupil demographics, known as differential aid. Base adequacy plus differential aid equates to the cost of an adequate education for a municipality to fund its residents' education. Once a cost of an adequate education is calculated, the dollar amount is compared to the municipality's locally raised and retained revenue assessed through the State Wide Education Property Tax (SWEPT). If the cost of an adequate education exceeds the revenue raised from the SWEPT, the municipality receives a grant based on the amount of revenue still needed to provide the cost of an adequate education.
In addition to funding to support the cost of adequate education, some municipalities may receive additional grants as other components of the adequacy aid calculation. For example, the extraordinary needs grants and hold harmless grants. The adequacy aid calculation is modified as a result of legislative changes on a regular basis. Particularly, the additional aid components have changed every year for fiscal year 2020 to fiscal year 2024.
State Adequacy Aid Calculation for Charter Public Schools
Similar to State Adequacy Aid for traditional public schools, charter public schools receive base adequacy and differential aid based on average daily membership (ADM). After the cost of an adequate education is determined for a charter public school, the charter public school also receives an additional grant. Some of the differences between district adequacy and charter adequacy also include:
- Charter public schools' ADM is based on where the student attends school and not based on what municipality the student resides in;
- Average daily membership is based in the current year for charter public schools instead of the previous year;
- SPED differential aid is calculated based on the ADM of SPED students attending a charter public school, but the payment is provided to the district that holds the financial responsibility to provide the SPED services.