AFT-NH Testimony Opposing HB 121
From Debrah Howes, President, AFT‑NH
Feb 12, 2026
To Chairman Murphy and members of the Senate Education Finance Committee,
My name is Debrah Howes, President of the American Federation of Teachers–NH. I write on behalf of our 3,500 members who work in preK through grade 12 public education, in public services, and in private and public universities across the Granite State. We are taxpayers and citizens of New Hampshire, and many of us are parents or grandparents of public-school students.
We all share the goal of transparency and good financial management of taxpayer money, especially when it comes to our public schools because we know that any misspent money is lost education opportunities for our public-school students. However, we strongly oppose HB 121 because it goes too far and poses significant dangers to the educational opportunities of public-school students throughout New Hampshire, especially those in our small, rural, property poor school districts.
HB 121 imposes unfunded mandates, ones that small and rural districts cannot absorb. HB 121 dramatically tightens audit requirements; mandates professionally conducted audits with an inflexible one‑year deadline and requires full publication of findings. These new compliance demands come without funding to help districts implement them.
Small and rural districts often operate with:
- A single business administrator—sometimes shared among multiple districts
- Limited access to professional audit firms
- Very tight budgets already stretched thin
When the state mandates more frequent, more complex audits, these districts must shift resources away from classrooms—reducing academic programs, supports, and staffing. And for some rural communities, finding an audit firm on the accelerated timeline is not even guaranteed.
Using punitive fines and withholding aid hurts students and their education, not the central office administrators or school board members who are directly related to financial recordkeeping and compliance. HB 121 allows fines of up to $500 per day for audit delays and authorizes the Department of Education to withhold state aid if required reports are late. The bill even permits DRA to disregard a district’s fund balance when setting tax rates if financial data is questioned.
Rural districts, many of which rely heavily on state adequacy aid, are particularly vulnerable. Even a short delay caused by staffing shortages or auditor availability could trigger:
- Sudden revenue losses
- Emergency budget cuts
- Deferral of essential services such as reading and math intervention, special education supports, or counseling
When the state withholds funding or levies fines, it is students, not administrators, who pay the price.
As written, HB 121 encourages state takeovers of local school district taking control away from local voters on how local taxpayer money is spent. The bill establishes a probation process and allows the Department of Education to appoint an administrator to oversee the district when financial standards are not met. Earlier proposals included even broader authority, like overriding contracts, and while some of that was narrowed, the current version still grants significant state control in cases of fiscal distress.
This approach was modeled in response to the Claremont fiscal emergency, itself a rural district facing challenges after discovering a $5 million deficit. But using that one crisis as justification for broad statewide intervention adds to the risk that many rural communities, those with small tax bases and limited financial staff, could fall into probation despite acting responsibly.
Local voters in small towns take immense pride in their schools. HB 121 undermines that tradition of community decision‑making and democratically elected school governance.
Rural students would face the sharpest losses in educational opportunities. Rural districts already operate on the thinnest margins. They tend to have:
- Fewer electives and advanced courses
- Limited arts, music, and extracurricular options
- Distance barriers that make partnerships and shared services harder
When funds must be diverted to:
- Pay for increased audit costs
- Cover fines
- Absorb withheld state aid
- Implement corrective actions under state oversight
…the cuts fall directly on student programs.
For many rural students, losing a single teacher, course, or extracurricular activity has an outsized impact—often eliminating their only chance to take an AP class, participate in chorus or robotics, or enroll in CTE programs. HB 121 can deepen educational inequities between wealthy communities and those already disadvantaged by geography and tax base.
Local property taxpayers in rural towns will bear the financial burden of HB 121, on top of the heavy burden they already carry because the state does not meet its constitutional obligation to fund public schools. When the state imposes penalties or withholds aid, the only way rural districts can balance their budgets is to raise local property taxes or make cuts. With small commercial tax bases and many residents living on fixed incomes, rural towns simply do not have the capacity to absorb these unexpected cost increases without serious consequences for families and the community.
This bill effectively shifts costs from the state onto the backs of local taxpayers—precisely those with the fewest resources to spare.
HB 121 does not improve the financial stability of New Hampshire’s schools. Instead, it creates new financial risks, punitive consequences, and state‑driven interventions that disproportionately harm small and rural districts and the students they serve.
We all share the goal of preventing financial mismanagement. But HB 121 punishes the very communities that are already doing everything they can with limited resources, and it undermines the educational opportunities rural students depend on.
For these reasons, we urge you to find HB 121 Inexpedient to Legislate.
Sincerely,
Debrah Howes
President, AFT-New Hampshire