Broad support for HB 603’s call to raise state share of special-education costs but questions remain on design

Representative Heath Howard introduced HB 603, which would increase the adequacy grant for pupils receiving special-education services and shift a greater share of special-education costs from local property taxpayers to the state. Howard said he and co-sponsors seek to reduce volatile, unpredictable local budget spikes caused by a small number of high-cost placements and to increase the state share of special-education funding.

Howard described data showing dramatic special-education cost increases in some districts and cited statewide totals (witnesses referenced a roughly $755 million figure for special-education-related spending after excluding some non-instructional items). He said many districts struggle when students enter mid-year with high-cost needs that must be met immediately while state catastrophic reimbursement often arrives only later.

Union and district witnesses largely supported the bill. Deborah Howes, president of American Federation of Teachers — New Hampshire, said increasing state funding would help districts hire and retain staff (paraprofessionals, therapists, special educators) and improve continuity for students. Michaela Demeter (Dover School Board) said out-of-district placements have increased in Dover and cited per-student out-of-district costs above $120,000 in the most recent year; she told the committee a proposed in-district intensive program would still cost roughly $100,000 per student annually and is unaffordable for the district without more state aid.

Kristen Manchuramani of the Special Education Advocacy Office cautioned that any statewide per-student increase should avoid creating incentives that shift children improperly into IEPs or into restrictive placements. She recommended basing increased funding on reported services and provider costs and urged stronger data collection to link funding to services provided. Louis Esposito, formerly a special-education teacher and now executive director of Able NH, described staffing shortages and infrastructure limits that hamper services even when local districts prioritize students.

Zach Sheehan of the New Hampshire School Funding Fairness Project said HB 603’s target — a much larger state contribution to special-education costs — aligns the state share more closely with actual additional per-pupil spending, and flagged the state’s long-term trend of declining share despite rising special-education costs.

Representatives asked detailed questions about mechanics and fiscal impact. Brian Eaton from the Department of Education’s Bureau of School Finance provided a technical clarification about education freedom accounts (EFAs) included in the fiscal note: an FY26 estimate assumed roughly 400 EFA students would receive special-education services and therefore the differentiated aid factor; he said that figure was a proxy based on historical EFA patterns and that department staff would provide more precise reporting.

Ending: The committee heard a mix of human testimony and technical briefing and agreed to include this proposal in upcoming work sessions with DOE and fiscal staff to refine cost estimates and program design before drafting amendments.