In sweeping order, court holds NH school funding model is unconstitutionally low


New Hampshire Bulletin

Published: 11-21-2023 2:58 AM

New Hampshire is sending too little state money to its public schools and is violating the state’s constitution, a superior court judge ruled Monday, in a groundbreaking decision that could significantly change education funding and require the state to spend an additional $3,256 per student each year.

In a pair of rulings on two separate lawsuits, Judge David Ruoff of Rockingham County Superior Court found that the state is not meeting its obligations to provide students an adequate education. In one ruling, Ruoff found that the current $4,100 base adequacy rate — the minimum amount of money the state sends to public schools for each student — is not enough to meet the state’s constitutional requirement to provide an adequate education.

The state instead should send no less than $7,356 to each student in order to meet its adequacy requirements, Ruoff ruled.

In a second ruling, Ruoff found that the statewide education property tax (SWEPT) is unconstitutional. That tax is collected by towns — not the state — at a set rate in order to provide funding for each town’s school district. But Ruoff held that the state’s 2011 decision to allow wealthier towns to retain any excess SWEPT they collect is unconstitutional and that the money should be distributed to poorer towns. Ruoff’s order Monday enjoined the state from allowing towns to retain that excess SWEPT in the upcoming tax season this winter and spring.

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The decisions, which would upend the way New Hampshire funds its schools, are likely to be appealed by the state to the Supreme Court. In the two Claremont decisions of 1993 and 1997, the Supreme Court held that the state had a constitutional requirement to provide an adequate education, and held the state was not meeting that requirement.

The plaintiffs in both lawsuits this year had argued that the state was still not meeting that requirement 30 years later. In one lawsuit, Contoocook Valley School District et al v. State of New Hampshire, school districts said the state’s funding formula does not provide enough for schools to provide an adequate education without resorting to local property taxes. In another, Steven Rand et al v. State of New Hampshire, property taxpayers argued that the deficiency of state funding has created disparities in how much residents in some towns are taxed versus others, in violation of the Claremont rulings.

The state — which was joined in the Rand lawsuit by “the Coalition,” a group of cities and towns that oppose the efforts to redistribute SWEPT revenues — argued that the plaintiffs had not proven that the state’s funding model does not provide adequate funding, and argued that the SWEPT does not create an uneven taxation structure.

The New Hampshire Department of Justice was not immediately available Monday to respond to the rulings or outline the state’s next steps. Because the decisions were issued simultaneously, Ruoff gave the state an additional 30 days to file a motion to reconsider.