Town-by-town impact of HB 675, state-mandated school budget caps

April 2nd, 2025

The House Finance Committee has voted to include House Bill (HB) 675, which mandates that all school districts in the state abide by a school district budget cap, into the 2026-2027 state budget through HB 2. 

According to an analysis by Reaching Higher NH, the mandated budget cap would actually reduce funding for most school districts, even before accounting for inflation, over the next five years. 

HB 675 requires that:

  • Before July 1, 2027: School districts must cap total appropriations, minus facilities construction and acquisition, to the prior year’s appropriations multiplied by the previous 5 years' average Consumer Price Index (CPI, or inflation rate) 

  • After July 1, 2027: School districts must cap total appropriations, minus facilities construction and acquisition, to the maximum of:

    • The 5-year average appropriations, or

    • The prior year’s appropriations multiplied by the average 5-year change in enrollment (measured by ADM-R) 

Explore the Analysis:

 

Click to View

 

Methodology and Assumptions:

The analysis uses the New Hampshire Department of Education’s (NHED) DOE-25 data from 2020 through 2024, the latest available data, to calculate the total appropriations for each school district minus facilities construction and acquisition. The DOE-25 is a multi-fund report of the school district's financial activities for the school year (denoted in this analysis as Fiscal Year, or FY, and ending on June 30). The report includes all revenues and expenditures in the district in the given year. 

It calculates the average 5-year inflation rate using the Consumer Price Index for All Urban Consumers (CPI-U), services less medical care services in Northeast urban, all urban consumers, not seasonally adjusted, for 2020-2024. 

This analysis is for discussion purposes only and should not be interpreted as official estimates. 

Model Assumptions:

  • The model assumes that FY2025 appropriations are identical to FY2024 appropriations because the latest available NHED DOE-25 data is for FY2024. 

  • The model does not take into account local district FY2026 appropriations that have been approved by local legislative bodies in 2025 because that data is not yet available from the NHED. Instead, the model uses the inflation calculation to demonstrate the impact of the legislation if the budget cap were imposed on FY2026 appropriations. 

  • The model assumes that the average 5-year change in enrollment between FY2020 and FY2024 remains steady through FY2030. 

  • The model assumes that the average 5-year CPI of 4.1%, which is calculated using the average CPI between 2020 and 2024, remains steady through FY2027. 

  • The model excludes Expen-4000, which is Facilities Construction and Acquisition, on the NHED’s DOE-25 spreadsheet, per the New Hampshire Financial Accounting Handbook for Local Education Agencies. 

  • The analysis does not include Hale’s Location or Newfound Area School District in its calculations due to missing data from the NHED. 

  • The analysis includes school districts listed on the NHED DOE-25 in FY2024 and does not include any districts that may have been created after that reporting (including the Pasquaney School District). 

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