NH State Senate Clears Claremont Loan Fund Over Unanimous Democrat Opposition

By Damien Fisher, NH Journal

A GOP proposal for a state-run loan program to keep the scandal-riddled Claremont School District open passed the state Senate on a straight party-line vote Wednesday. Democrats refused to support the rescue funding plan because it would allow more district students to participate in the state’s school choice program.

“I don’t believe that we should be growing the Education Freedom Accounts (EFA) program, and this level of school choice, any further while communities are still struggling to fund public education,” said Sen. Suzanne Prentiss (D-Lebanon).

The legislation, a compromise between Sen. Ruth Ward (R-Stoddard) and Rep. Jim Kofalt (R-Wilton), creates what critics describe as the equivalent of a payday loan for the district. It allows Claremont to collect up to 75 percent of its outstanding annual adequate education aid in advance.

The loan carries a 3.8 percent interest rate and lifts the current cap on Education Freedom Account participation in any district that participates in the program.

Claremont is seeking the funding following the disappearance of millions of dollars due to mismanagement and possible malfeasance. District administrators have not yet accounted for the missing money.

The EFA provision was not the Democrats’ only concern with the loan plan. Prentiss attempted, unsuccessfully, to amend the bill to lower the 3.8 percent interest rate and ease auditing requirements for districts seeking loans. Still, EFAs emerged as a central point of opposition as other Democrats spoke against the proposal.

Sen. Debra Altschiller (D-Stratham) accused Republicans of using Claremont’s crisis to advance a partisan agenda. “It’s deeply unfortunate and disappointing that this lifeline had to be turned into a political football,” she said.

But Senate President Sharon Carson (R-Londonderry) said Democrats turned their backs on Claremont families by trying to strip EFAs from the legislation.

“The provision to extend the EFA program to the students of Claremont is such an obvious solution that even the most ardent opponents of school choice should be able to concede that this will help students. But Democrats once again decided to bow to the whims of their political donors and ignore the Claremont students,” Carson said in a statement. “The hypocrisy of the Democrats on the issue of education is deafening. Democrats cannot pretend to be a pro-education party and then vote against educating our children.”

The Senate was not alone in attempting to address the Claremont crisis on Wednesday. House Republicans advanced HB 121, legislation that would subject districts like Claremont to increased state oversight. Under the bill, districts that fail to meet auditing standards could be placed on probation and have a state-appointed administrator take control.

“Claremont’s administrators led the district down a path of disaster, and now the people are paying the price,” House Republicans said in a statement. “HB 121 brings accountability to school districts and ensures that this kind of mismanagement never happens again.”

The precise cause of Claremont’s $5 million deficit is still being investigated by auditors, but years of serious mismanagement by district employees — hidden from the public — appear to be at the core of the problem. The Claremont School Board was informed of the deficit in August, just weeks before the start of the school year, and weighed whether the district could open at all.

Schools did open on time this fall, but the board was forced to make deep budget cuts to keep them operating. The district laid off 40 employees, canceled school sports programs, and closed one of the city’s three elementary schools.

As Claremont works to recover, cash flow is expected to remain a challenge for several years. Even with the cuts, the district projects a $1.9 million deficit by the end of the school year.

This story was originally published by the NH Journal, an online news publication dedicated to providing fair, unbiased reporting on, and analysis of, political news of interest to New Hampshire. For more stories from the NH Journal, visit NHJournal.com.