Legislature has to solve two tricky problems

Most observers have decided the two big issues before the legislature in 2008 are reforming the retirement system and determining the cost of an adequate education.

Straightening out the situation with the retirement system is going to take many changes and a huge investment of money. The Senate took one step on Thursday by voting to create an investment committee to make investment decisions that will be separate from the Board of Trustees. In speaking on the bill, Senator Janeway (Webster) noted that the New Hampshire retirement system’s return on investment was one of the lowest in its peer group. That is not acceptable but with the passage of SB 463, an important but early step in reforming the retirement system is moving forward.

The Joint Legislative Oversight Committee on Costing an Adequate Education voted 6-3 on its report on Friday afternoon. The process followed by the committee is to be commended. Between August and last Friday, the committee held 17 public meetings with over 50 hours of testimony from national experts, New Hampshire stakeholders and local school officials. The Committee’s 37 page report reflects, to a large degree, the testimony heard.

There are two major issues for me. First, I needed assurance that when legislators go home in June, school administrators will know what the state grant for their schools will be for the school year beginning in September, 2009. The committee report offers no specific dollar amount for each district thus school boards could be starting budget planning next fall and once again not know what the state grant will be. Senator Estabrook, one of the committee co-chairs, emphatically said that that we will have a dollar amount for each district before our June adjournment.

The second issue is at the heart of the education funding battle. What is the criteria for who gets the money? The latest Supreme Court decision in what is known as the Londonderry decision said the state needed to define an adequate education, determine its cost, find the money and hold ourselves accountable. So, to comply with the court ruling the committee said an adequate education for each of New Hampshire’s 200,000 students will cost a little less than $3,500. That will amount to an estimated $680 million and will leave around $200 million for targeted state aid. The committee report recommends supplementing local schools with targeted aid for English language learners, schools with concentrations of students getting free and reduced cost lunches as a measure of poverty and special education.

Scare state resources should be going to help the schools with the least financial ability to provide an education. By having to provide the base grant at a little less than $3,500, the schools in communities with the weakest financial resources may find themselves penalized. That will push the problem onto local property taxpayers.

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Like most of its citizens, the state has a savings account. It is called the “Rainy Day Fund” but the real name is the Revenue Stabilization Reserve Account. The money in the fund is used only when the legislature sees no other way to fund government activities when revenues fall dramatically below budgeted plans.

Each of us has a comfort zone about our savings. At a certain level, we feel we have enough money if something goes wrong. It is the same with the Rainy Day Fund. By having savings equal to 5% or more of annual general fund revenue makes New Hampshire bonds more attractive to bond buyers and helps lower the cost of state borrowing.

Today the state’s savings account has $89 million. As recently as June, 2005, the fund had $17 million equal to 0.8% of the state’s revenue while in June, 1999, the balance was $188 million equal to 18.1% of revenue that year. The surplus revenue from fiscal year 2007 that ended last June is over $33 million. The Senate Finance Committee heard two bills on Wednesday to put the surplus into the Rainy Day Fund giving us a balance of $122 million. That would make the fund equal to about 4.9 % of revenue last year. Very close to the minimum bond rating agencies are looking for.

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There many traditions enjoyed by generations of residents. A special event every year is St. Joseph Parish Annual Sports Night. Last Wednesday, the parish hosted its 52nd annual event. Four outstanding Stevens High School athletes and scholars received their awards in front of family, friends and another 150 or more guests. Each student gets a couple of minutes to tell their special story as they receive their awards.

Father Stan Piwowar, Pastor of St. Joeseph, always has a large Tootsie Roll, one of his traditions, and a St. Sebastian medal as St. Sebastian is the patron saint of athletes, for each winner. Father Stan told us he was 40 years old when he went to his first sports night. He’s 82 now.

Tom Haley, who used to teach and coach at Fall Mountain and went on to be a sportswriter for the Eagle Times, had plenty of stories of past events that highlighted Claremont’s rich sports history. But most important at the event are the students. Congratulations to the 2008 Unsung Hero Award winners, Samantha Paradis and Stephen Condon. The Student Athlete Award winners were Morgan Carpenter and Will Race. Thankfully, the sports night tradition keeps going on.