Ever since the New Hampshire Supreme Court decided in Claremont II that the local property tax used to fund K-12 public education was unconstitutional, policymakers have struggled to find a permanent solution to the school finance problem. In 1999, the legislature enacted an interim funding plan centered around a temporary statewide property tax. The price tag of providing New Hampshire students with an "adequate" education was set at $825 million in spending, but the funding plan raised revenues of only about $725 million. Thus, lawmakers were aware that they would have to revisit the funding issue. In June 2001, after a rancorous two-year public debate, and nearly four years after the Claremont II decision, policymakers enacted a second plan that makes the statewide property tax permanent and adds sufficient supplemental revenues to fund an "adequate" education.
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Article provided by Federal Reserve Bank of Boston in its journal Fiscal Facts.