New formula for NH school funding?

The New Hampshire legislature is considering a change to the state education funding formula.

State education funding for each town is calculated according to many factors, including enrollment numbers, the number of students receiving free lunches, and the number of English language learners. 

In 2011 the state passed a law that limits any increase in state funding, so a town can receive no more than 108% of the previous year's funding from the state.

State law also limits how much funding can decrease from one year to the next.  So-called "stabilization grants" keep funding level for towns that are losing students.

Rep. David Bates is sponsoring HB 562 to eliminate the 108% cap and decrease stabilization grants by 4.6%.

Supporters argue that the cap on funding is unfair and possibly unconstitutional.  Fast-growing school districts have threatened to sue the state over the cap.

On the other hand, decreasing stabilization grants will hurt many school districts.  The change proposed in HB 562 would generally benefit the southern tier of the state at the cost of school districts in the north and west.