Bill would require State Board to report unfunded costs of education rules; board warns it lacks staff to comply

Rick Ladd, chair of the House Education Funding Committee, told the Senate Funding Committee that House Bill 718 would require the State Board of Education to report the estimated unfunded financial impact to school districts of any board-adopted rules that exceed state or federal minimum requirements.

"We—re trying to determine what is going to be this impact," Ladd said in describing the bill—s purpose to identify potential unfunded mandates that result when rules go beyond minimum statutory or federal requirements. Ladd said that special education costs are a substantial portion of total educational spending and that the state lacks consistent data on the financial impact of rule changes. "When 1 out of every $4 is a special education cost in our education system, basically that—s close to $1,000,000,000," Ladd said.

The bill drew immediate operational questions. Drew Klein, chairman of the State Board of Education, told senators the board has essentially no staff to perform the cost analyses the bill would require. "The Board of Education has 0 staff," Klein said. "I am at a loss to figure out how we are supposed to comply with this statute if this becomes law." He suggested the Legislature specify who would perform the analyses, for example by assigning the work to the Legislative Budget Assistant or to identified staff in the Department of Education.

Ladd acknowledged the difficulty of estimating costs for hundreds of districts and that many fiscal notes filed on bills are marked indeterminable. He said the bill is intended to inform lawmakers about the extent and nature of costs that new rules impose on districts rather than to block legitimate, necessary rules.

Advocates for maintaining state-level protections urged caution. Bonnie Dunham, a Merrimack resident and special education advocate, opposed the bill and warned it could have the unintended effect of pushing New Hampshire—s special education rules down to the federal minimum. "IDEA was established as a floor. It was always intended to be a floor, not a ceiling," Dunham said, noting that some state rules, such as earlier transition planning or bans on specific aversive practices, reflect long-standing local policy choices and may yield long-term benefits that fiscal snapshots would not capture.

Senator Rosenwald and other senators asked how the board or department would compute district-level impacts, including differing results for large urban districts compared with small rural districts. Klein said the analysis would have to account for district size and that a legislated analytic assignment or additional department capacity would be necessary to produce meaningful estimates.

The committee heard testimony that the reporting requirement could be phrased to align with existing statutory reporting language and with the Students First Act—s posting requirements to create consistency and reduce confusion. Witnesses referenced the administrative review process that involves the Joint Legislative Committee on Administrative Rules (JLCAR) as the forum that already reviews proposed rules but noted that JLCAR—s review is not a fiscal-impact accounting exercise for every district.

The hearing record includes exchanges on methodology and the practicality of producing reliable estimates for rule-induced costs. No committee vote was recorded at this hearing; senators asked staff to consider clarifying language about who would produce the analysis and how it would be standardized across districts.