Republicans absolutely should pass Ruth Ward’s proposed “bailout” of the Claremont School District. Why? Because it is not, by any objective or neutral standard, a “bailout.” Rather, it is a commonsense, practical solution to Claremont’s budget deficit that should mitigate “collateral damage” to schoolchildren, such as missing out on sports, extracurricular activities, clubs, etc, with zero risk or additional cost to taxpayers.
From an op-ed penned by Ward:
… This past week, I introduced an amendment designed to … help the city address the cash flow problems caused by its $5.1 million shortfall by creating a revolving loan fund that allows Claremont to access Adequate Education Funds at the beginning of the school year, then repay them with interest. This would enable the school district to avoid catastrophe and keep its doors open. The amendment would remain in effect through 2030.
Let me be clear: this amendment will not result in a state bailout to fix the city’s self-inflicted troubles. The legislation I’m proposing will not cost New Hampshire taxpayers a single extra penny. It’s a loan — not a gift — based on existing funding, and it must be repaid in full.
It is unfortunate that Ward described her proposal as a “loan.” It is much more accurately described as an “advance payment.” Language from Ward’s amendment:
194:64 Outstanding Loan Amount. At no time shall the total outstanding amount of loans made under this subdivision exceed 75 percent of total adequacy funding to be distributed to Claremont school district, pursuant to RSA 198:41, in any given year.
… When an adequacy payment is due to be distributed pursuant to RSA 198:42:
I. The portion of the adequacy payment equivalent to the outstanding principal and interest balance of the revolving loan shall first be credited against such balance; and
II. Any remaining adequacy payment shall then be distributed to the Claremont school district.
In other words, Claremont can receive an advance of up to 75 percent of the “adequacy grant” it is going to receive under State law. And then, when the State makes “adequacy grants” to cities and towns, any funding that was advanced to Claremont is deducted from Claremont’s grant, along with interest.
No objective or neutral observer would characterize the foregoing as a “bailout.” Claremont is not receiving $5 million in additional funding or even five cents in additional funding. Claremont receives zero additional funding. Claremont simply gets early access a portion of its “adequacy grant” that the State is obligated by statute to pay.
There is zero risk to taxpayers because any advance taken by Claremont is automatically deducted from its adequacy grant when the State makes the statutorily required distribution of adequacy funding to cities and towns. There is zero cost to taxpayers because Claremont will not receive any additional State funding beyond its adequacy grant.
This has not stopped House Republican Leadership from falsely and misleadingly characterizing Ward’s amendment as a “bailout”:
Let’s address RINO-Russ Barry’s cavils. We have no idea what RINO-Russ means by “a reward incentive for mismanagement.” In fact, Ward’s amendment does just the opposite. Claremont must pay interest on any advance payments and so receives a lower aggregate adequacy grant.
As for RINO-Russ’ speculation about what the “next legislature” might do, it also might pay off Claremont’s entire deficit if Ward’s amendment is not passed. Speculation about what the “next legislature” might do or might not do is not a credible reason to oppose or support Ward’s amendment.
House GOP leadership has chosen the wrong “hill to die on.” Our advice to the “rank-and-file” is “don’t.” Ward’s amendment is a practical, common-sense solution to the problem of avoiding ‘collateral damage” to blameless schoolchildren, while not “bailing out” negligent administrators and local politicians.
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