With Claremont schools struggling to survive a $5 million budget meltdown, Senate Democrats voted against a GOP proposal that would extend the district a financial lifeline but require new accountability measures and expanded school-choice options in return.
On Tuesday, both Democrats on the Senate Education Committee voted against a GOP proposal to create a School District Adequacy Revolving Loan Fund—allowing school districts to borrow against their state Education Adequacy payments.
Sens. Suzanne Prentiss (D-Lebanon) and Debra Altschiller (D-Stratham) wanted a simple bill that extended the loans with few restrictions and a subsidized interest rate.
Republicans rejected that approach, arguing that Claremont is suffering a $5 million fiscal crisis due to incompetence and a lack of oversight.
“When we first learned of the gross financial mismanagement that has put the Claremont School District in such peril, my top priority has been to ensure that all Claremont students would be able to finish the school year at the school of their choice,” said committee chair Sen. Ruth Ward (R-Stoddard).
The amended version of the bill passed by the committee was a negotiated compromise between House and Senate Republicans.
“The changes we adopted today create the opportunity for Claremont to access state adequacy funds early, helping to alleviate the district’s severe cash-flow challenges, while ensuring accountability and without any risk to New Hampshire taxpayers.”
Under the plan, any school district in financial distress will be able to seek loans from the state worth up to 75 percent of the district’s anticipated adequacy aid grants. For Claremont, this means access to needed cash as it works to restore its financial stability.
But Grant Bosse, Senate deputy chief of staff, said the loans come with strings attached. Districts receiving advances will be expected to hand over their records for review and submit to audits by the Office of the Legislative Budget Assistant.
“If you want the state to provide you with the funds against your adequacy [grants], you’re going to have to provide your numbers,” Bosse said.
According to a statement from Senate Republicans, “Voters in applying school districts would have the chance to adopt Tax Caps under RSA 32:5 and separate SAU budgets under RSA 194 C:9.”
Altschiller and Prentiss were particularly outraged by the requirement that students in troubled school districts would be eligible for the Education Freedom Account program outside the current statewide enrollment cap. The current cap is 10,000 EFA students.
“I don’t know why we have to put this in here,” Prentiss complained.
Bosse said lawmakers want to ensure parents have choices if they suddenly find their schools at risk of closing due to administrative mismanagement.
Prentiss also objected to the interest rate the district will pay on the loans. The proposal pegs the rate to the federal prime rate, currently 3.88 percent. She noted that other state revolving loan programs charge only 2 percent.
But Sen. Dan Innis (R-Bradford) said charging the federal prime rate is reasonable—high enough to force districts to think carefully before seeking loans but far from punitive.
“You have a school district that was fiscally irresponsible; we don’t want to encourage this on a regular basis,” Innis said.
Additionally, no district will be able to access the loan fund for three academic years in a row.
The most important math, however, is political: Republicans hold a supermajority in the state Senate and—more importantly—a 40-plus majority in the House. Democrats do not have the votes to pass a no-strings-attached bailout, and House Republicans have no interest in one. Rank-and-file Republicans have made clear that if they are going to support these subsidies, districts must make changes as well.
House Majority Leader Jason Osborne (R-Auburn) told NHJournal that if the Senate sent his chamber a subsidized loan program with no reforms, his caucus wouldn’t pass it.
“Democrats want a bailout for free. They don’t want any accountability,” Osborne said. “At the end of the day, it will be Republicans saving the day and Democrats trying to stop it.”
Sen. Daryl Abbas (R-Salem) argued that a plan that cannot pass the House is no plan at all. He urged colleagues to support the compromise.
“This will help Claremont,” Abbas said.
The Senate will take up the bill when it convenes Jan. 7, 2026.
