Correcting the myth: Sustained funding leads to better student outcomes, as evidenced by decades of research. New Hampshire hasn’t kept up.

March 11th, 2025

Decades of research has shown that when public schools are sufficiently funded in a sustained manner, students do better academically, are more likely to graduate high school, and have higher lifetime earnings. This is especially true for students who are furthest from opportunity -- including students from low-income families, who live in poorer neighborhoods, and those of traditionally excluded backgrounds. 

Some New Hampshire State Representatives have alleged that there is no correlation between student performance and school funding. It is a popular talking point that is not supported by data or research. These misleading statements are most often used to advance a pro-voucher agenda or to sow distrust in public schools and school boards. 

FACT: Sufficient and sustained school funding leads to better student outcomes, especially for low-income students. 

School districts need adequate resources to operate their public schools, hire and retain trained and qualified teachers and staff, and offer robust academic courses and programs. Increased school funding has led to improvements in student academic outcomes, increased graduation rates, and lower instances of adult poverty. 

But it also matters how the funding is allocated and used -- investments are most impactful when they’re allocated to school districts that have high concentrations of students in poverty, and provided to schools for students who have learning disabilities and learning needs. Effective school funding is:

• Adequate: Funding should be sufficient to support a rigorous, high-quality education

• Equitable: Funding should be targeted based on student need, with goal of closing opportunity gaps

• Responsible: School leaders are trusted to use resources in ways that work best for their communities, & held accountable for outcomes

• Transparent: Schools, state administrators, and legislators should be accountable for providing the appropriate resources

When public schools receive adequate funding, it results in:

• Substantial improvements in math, English, social studies, and science achievement,

• Lower class sizes

• More qualified teachers

• Reductions in grade repetition

• Reductions in suspensions and expulsions

• Increased likelihood of high school graduation and being college-ready

• Higher lifetime earnings and reduced incidence of adult poverty

Educational Researcher Bruce D. Baker, of Rutgers University, who was hired by the New Hampshire Legislative Commission to Study School Funding, concludes: 

FACT: State funding for New Hampshire’s public schools is $126 million less than 10 years ago, when adjusted for inflation, and local property taxes have gone up to make up the difference. 

Local property taxes, particularly for education, are a balance sheet: they are a function of the cost to operate a public school, minus the state and federal funding that a school district receives. 

Property taxes are not solely influenced by the school district budget -- in fact, the budget can stay exactly the same year to year, but property taxes can change significantly because of changes in the state school funding formula. 

When the state sends fewer dollars to a town to operate its public schools, that means that the town’s local property tax rate will increase to compensate for the difference.

In the 2024-2025 school year, the state gave $126 million less in public school funding to towns when adjusted for inflation than ten years prior. That means that local property taxes have had to increase by $126 million to make up the difference. And that’s before any other budget changes, like increases in heating oil, school buses, contractual obligations, or health insurance premiums. 

Granite Staters are increasingly worried about their property tax bills. And for understandable reasons -- New Hampshire ranks #50 nationally for state funding of public schools, meaning that most of the cost of public schools are paid for by local property taxpayers. But property taxes have risen, at least in part, because of the lack of -- and shrinking -- state funding for public schools. 

FACT: Budget caps hurt students and are not guaranteed to lower property taxes. 

Some lawmakers have proposed capping school district budgets to a per-student amount. However, those arbitrary caps have been shown to harm students: when schools must pay for expenses like transportation, building maintenance, and special education, other things get cut, like academic programs and Advanced Placement courses, extracurricular activities, and technology. 

And, they’re not guaranteed to lower property taxes: if the state continues to fund public schools at a lower rate without accurately accounting for inflation or other mandated costs, property taxes may have to increase to make up the difference. 

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