Distant Dome: Two Weeks of Education Funding Legal Wrangling Ahead

The latest round for education funding lawsuits enters the judicial ring this week in Rockingham County Superior Court and will be argued over the next two weeks.

The second half of the Rand suit goes before judge David Ruoff and — much like the ConVal suit — hinges on whether the state is providing ample money to provide an adequate education for its students, which is essentially the same question before the courts three decades ago with the Claremont suit.

Under the two Claremont rulings, the state is required to provide an adequate education to its students, define what constitutes an adequate education, pay for it with constitutional taxes and ensure school districts are providing it.

That sounds pretty simple, but you have to dig a little deeper to understand why the issue has not been settled in the intervening 30 years.

As ConVal argued, the state believes currently that $4,100 per student is the cost of an adequate education, and the state largely pays that cost with the Statewide Education Property Tax, portions of existing taxes and Sweepstakes revenues.

According to the latest figures from the Department of Education the statewide average for educating a single student is $20,322, or $24,756 when all expenditures are included such as transportation, capital expenses and interest, out-of-district tuitions, etc.

In the ConVal ruling, which is on appeal with the other half of the Rand suit to the Supreme Court, Ruoff set the state’s obligation for the cost of an adequate education at $7,356 and said it is probably closer to $9,900 per student.

In any event the lower figure is almost double what the state pays and would cost the state an additional $500 million.

In the Rand case, the plaintiffs also want the court to determine if the additional money school districts receive for higher costs for educating special education students, or from low-income households or do not speak fluent English, for example is enough to cover those costs as well.

In their suit, the plaintiffs claim the state funding is inadequate to cover those “differentiated aid” costs as well.

When the funding formula was originally developed in the late 1990s, many of the lawmakers sitting on the committee were from the state’s largest cities like Manchester, Rochester and Nashua and weighted the formula to help their communities and that has not changed much since as communities like Manchester, Nashua, Rochester and Somersworth receive a greater percentage of state aid than most other communities.

They are larger and have larger populations of children in poverty, with disabilities and children whose native language is not English, but other communities like Claremont, Berlin, Newport, Pittsfield, Franklin and Milan have problems raising money for education as well without the same percentage of state aid.

But that is not the crux of the Rand suit, which is by failing to pay all of its constitutionally obligated cost of an adequate education, city and town taxpayers have to make up the difference with local property taxes.

As most people know by now, there are property wealthy communities like Moultonborough, Tuftonboro, Wolfeboro, New Castle, Rye, Portsmouth, Hampton, Sunapee, New London, Newbury, etc. that collect more than they need through the Statewide Education Property Tax to pay for the state’s contribution of $4,100 per student and have money left over.

Ostensively all those communities and all the other communities in New Hampshire pay the same tax rate for the Statewide Education Property Tax.

But when the statewide tax receipts in a community do not cover the $4,100 per student threshold, local property taxes have to make up the difference, and those property tax rates vary from community to community.

If the communities have to pay for an adequate education, then the state is using local property taxes to satisfy its obligation, which would mean they are really state taxes.

And the constitution requires that all state taxes be proportional and reasonable and that is the problem, because widely varying tax rates do not meet the constitutional requirement.

And the other aspect of the lawsuit is that the cost of an adequate education is much higher than $4,100 and if that is true, and Ruoff has ruled once that it is, than the state has an even greater obligation, meaning most every community is using local property taxes to pay the state’s share of an adequate education.

The state aid to education totals $817.84 million for the current school year, while the total spent on public education from kindergarten to 12th grade is estimated to be about $3.8 billion for all education related costs, not just adequate education.

The federal government sends hundreds of millions of dollars to the state but there is no simple total of federal funds going to public education in New Hampshire to be found on the Department of Education’s website.

But if the state paid even half the cost of the total amount spent on public education, its obligation, given federal funds, is considerably more than what it currently pays and may be nearly double that amount.

The stakes are extremely high for the state at a time when state revenues are declining, exacerbated by years of rate cuts and repeals.

The state has steadfastly refused to approve any new money source for education outside the statewide property tax which was moving the same dollar from the local side of the property tax ledger to the state’s side although making it more proportional across the state.

However, that did little to reduce property taxes in property poor communities or increase the educational opportunities for students in the property poor districts.

The state has argued since the two Claremont decisions were written 30 years ago that the definition of an adequate education and how to fund it is up to the legislative and executive branches, which it is, except when fundamental rights are being violated.

Recently, the Attorney General’s Office spent a great deal of time arguing what the plaintiffs seek would violate the constitutional separation of powers provision.

The question is where do you draw the line?

Does the legislature in failing to address the inequities for property taxpayers and students exercising its rights to control the purse and set policies, or is it contempt of court?

Or does the court have the final say when fundamental constitutional rights are violated?

Before pondering those questions there are two weeks of arguments by the plaintiffs and the state. The state told the court last spring the plaintiffs have failed to “meet their heavy burden of demonstrating that the current funding formula is in clear and substantial conflict with the [sic] Part II, Article 83,” in seeking a summary judgement and asked not to go forward with this week’s hearings.

The court rejected that request quickly and there will be two more weeks to parse the fundamental issue of whether the state’s children have a fundamental right to an adequate education and how the state would pay for it to be on center stage in the public arena once again.

Garry Rayno may be reached at garry.rayno@yahoo.com .

Distant Dome by veteran journalist Garry Rayno explores a broader perspective on the State House and state happenings for InDepthNH.org. Over his three-decade career, Rayno covered the NH State House for the New Hampshire Union Leader and Foster’s Daily Democrat. During his career, his coverage spanned the news spectrum, from local planning, school and select boards, to national issues such as electric industry deregulation and Presidential primaries. Rayno lives with his wife Carolyn in New London.