The number of students in NH has fallen by 10 percent during the past decade—a trend that is expected to continue for at least the next decade. Meanwhile, the number of School Administrative Units (SAUs) actually increased, and there’s been little change in the number of school districts or actual school buildings statewide. These seemingly contradictory forces have spurred some communities to consider consolidation as a way to reinvigorate schools and cut expenses. Legislators, education officials and businesses are having similar conversations. But before NH gets too far in this discussion, policymakers should make sure they understand the state’s goals related to organizing its school system and the potential effects of major changes.
The argument for school consolidation usually rests on a handful of assumptions, including that adding students to a district will reduce per pupil costs through economies of scale. Larger districts can often support more specialized teaching staff, providing a more diverse education. While those assumptions have some truth, there are other factors that undercut potential savings or advantages of consolidation. For one, transportation costs, as a district must transport more students over a larger geographic area. Consolidation plans may overlook impacts beyond costs, including residents’ connections with schools, housing prices and economic activity associated with a school.
National research offers mixed findings on this issue, and few studies have compared school spending before and after consolidation. One analysis from New York found that consolidation resulted in considerable savings, but only for districts of 300 pupils or fewer. Savings were partially offset by increases in capital spending. In Maine, a 2007 law required smaller districts to combine or risk losing state funding. The plan fell short of its original target, and a number of communities have since voted to leave their newly consolidated school units. While per-pupil administrative costs fell for consolidated districts, those savings did not result in lower overall spending, as they were used to cover other education costs, like new programs or declining state aid. Local political resistance was the biggest obstacle to consolidation. The recent historical trend in NH has been toward increased local control and away from centralized state oversight, spurring the growth in SAUs and the reluctance for local communities to join forces.
The Data Behind NH’s Schools
New Hampshire school districts tend to be much smaller than in the rest of country—the seventh lowest average district enrollment in the nation. About half of NH’s districts have fewer than 500 students. If statewide enrollment trends continue, districts that pay tuition to send students to other districts may find themselves in a strong “buyers market,” as many schools find themselves shopping for more students to fill empty desks and classrooms.
According to an analysis of Department of Education data, general per-pupil administrative costs are lower in larger districts. However, school-level administration costs remain relatively stable regardless of district enrollment. This seems to indicate that cost savings are most evident not through combining individual schools, but by combining smaller districts into larger districts.
Incentivizing Consolidation
For decades, the state offered higher levels of aid for new building construction to multi-town districts. But lawmakers eliminated that several years ago, discarding one of the state’s few financial incentives to encourage towns to consolidate school systems. Similarly, the state Board of Education for a long time could veto a district’s decision to withdraw from an SAU. That changed several years ago, and districts can now withdraw from an SAU over the opposition of other districts and the Board of Education. If policymakers see consolidation (or a halt to further SAU dissolution) as a valuable goal, they may want to reconsider restoring authority to the Board of Education, raising the bar for districts looking to leave an SAU.
Policymakers should also seek more information about the needs of NH’s education system, such as demographic trends at the district-level, projections for enrollment, the age and condition of the public school facilities, and existing regional collaborations across NH’s school districts and SAUs that might serve as pilots for further consolidation. Policymakers should avoid a single, state-mandated approach to consolidation policy. Variations in student demographics, geography, school facilities and public expectations will result in varied outcomes. The fundamental question remains: What would a NH-specific approach to this issue look like?
Steve Norton is executive director and Daniel Barrick is deputy director of the NH Center for Public Policy Studies, an independent, nonprofit, non-partisan organization pursuing research on public policy. For more information, visit www.nhpolicy.org.
Current Issue - May 2024