In significant wins for public school children, the judge in two New Hampshire school funding lawsuits ruled the State is violating its constitutional obligation to adequately fund public schools, and that the state’s administration of a tax to fund public schools violates a separate constitutional requirement for uniform taxation.
1. Rand v. State
The New Hampshire Constitution requires the State to determine the cost of a constitutionally adequate education, provide sufficient funding to districts to meet that obligation, and ensure that any taxes used to fund adequacy are equal in valuation and uniform in rate. The plaintiffs in Rand v. State, New Hampshire taxpayers, filed a lawsuit in June 2022, alleging that the State has failed to meet these obligations.
Currently, base adequacy, which is the amount the State claims is the cost of educating a student with no additional needs, is $4,100 per pupil. Additional adjustments are made for children who qualify for free and reduced-price lunch, English Learners, and students with disabilities. The adjustments are called “differentiated aid.” The State allocates on average $4,500 per pupil, including differentiated aid. But the actual average per-pupil amount in New Hampshire exceeds $19,000.
To meet its adequacy funding obligation, the State relies heavily on the statewide education property tax or SWEPT. Although SWEPT purports to be a statewide property tax, it is collected and administered at the local level. Each year the State sets a nominally uniform rate for the SWEPT.
But in practice the tax is not uniform. Because property values differ dramatically by municipality, towns with high property values often collect more in SWEPT than the State’s claimed adequacy cost. Prior to 2011, the State collected the excess and placed it in the Education Trust Fund, which is used to pay for constitutional adequacy for communities for which SWEPT does not raise enough revenue. Since 2011, however, the State has allowed municipalities to retain the excess SWEPT money and spend it on additional local educational expenses beyond adequacy. This effectively reduces their SWEPT rate. For municipalities that do not have schools, the state offsets the SWEPT tax by setting negative rates for other property taxes, reducing their contribution to statewide education to zero.
The Rand plaintiffs argued that these practices mean the SWEPT is not uniform, in violation of the State Constitution. The judge agreed, granting partial summary judgment for the plaintiffs on November 20, 2023.
Plaintiffs will now proceed to trial on their remaining claims.
The plaintiffs in the case are represented by New Hampshire attorneys Natalie LaFlamme, John Tobin, and Andru Volinsky; pro bono attorneys from the law firm White & Case; and Education Law Center. The case is pending in Rockingham Superior Court.
2. ConVal v. State
On the same day he issued his order on the Rand plaintiffs’ motion for partial summary judgment, Judge Ruoff issued a decision in Contoocook Valley School District v. State (ConVal), ruling, after a three-week trial in May, that the State’s base adequacy amount violated the New Hampshire Constitution. Judge Ruoff ruled that base adequacy must be at least $7,356.01 per pupil, which he admitted is a conservative calculation. The judge ended his opinion noting that he trusts the Legislature will set an amount “meaningfully higher than” his threshold.
The plaintiffs in this case, school districts and taxpayers, are represented by Michael Tierney and Elizabeth Ewing of Wadleigh, Starr & Peters, P.L.L.C.
“It is clear from Judge Ruoff’s decisions that New Hampshire has shirked its constitutional duty to adequately support public school children, imposing a disproportionate burden on property poor municipalities,” said Wendy Lecker, Education Law Center Senior Attorney for School Finance and Resource Equity. “Now, the State can no longer ignore its constitutional obligation.”
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