Competitive school building aid program remains limited by $50M cap; department details ranking, "tail" payments and allowable costs

Tim Kearney, Bureau Administrator for the Bureau of School Facilities at the New Hampshire Department of Education, briefed the Finance Division II on the school building aid program's current structure, its competitive ranking process and constraints from a statutory $50 million annual cap.

Kearney explained that historically (1946–2012) eligible projects were funded by state shares of principal over the life of a bond; a 2013 law changed the approach to pay a portion of current project costs up front and capped annual appropriations at $50 million. Under the current practice the state typically pays 80% of the awarded share up front (the awarded share ranges from 30% to 60% depending on municipal factors) and pays the remaining up to the award after project completion and audit. "The law created a competitive grant structure; projects are ranked and prioritized for funding based on life safety, ADA deficiencies, overcrowding and consolidation," Kearney said.

Kearney described the "tail" of obligated payments resulting from projects awarded before the moratorium that continue to consume part of the annual trust-fund allocation; that legacy obligation reduces the amount available for new awards. He also emphasized that building aid pays only on allowable costs — 60% of a large project is 60% of the allowable portion, not 60% of all local project costs. Kearney used the Rochester project as an example: the district's total project cost exceeded the amount the state counts as allowable, so the maximum possible state award was significantly lower than 60% of the total project price.

On project timing and applicant options, Kearney said districts receive a letter of intent after ranking and have multiple local-vote opportunities to secure a bond. If a district proceeds with construction before accepting an award, it becomes ineligible for building aid for that project. The department also noted the program now allows projects to remain on the ranked list from year to year without reapplying; applicants can update construction-cost assumptions at award time to reflect inflation or market changes.

Ending: Kearney urged the committee to consider a facilities‑assessment study that would estimate statewide capital needs; department staff said prior legislative proposals to fund such an assessment did not advance and there is no current appropriation dedicated to a state facilities inventory.