By DAMIEN FISHER, InDepthNH.org
The plaintiffs in the latest school funding lawsuit are asking a judge to stop the state from setting the rate for the coming Statewide Education Property Tax, arguing that tax is currently being unconstitutionally collected.
The lawsuit, filed by several state residents who are also commercial and residential property owners, claims that New Hampshire is violating the Supreme Court’s 1997 Claremont II decision.
That decision found, in part, that the use of local property taxes with varying rates to pay for the state’s obligation to provide its students with an adequate education is unconstitutional.
According to attorneys Andru Volinsky, John Tobin and Natalie Laflamme, the state continues to ignore the New Hampshire Supreme Court by using varying rates for the Statewide Property Tax, which in effect continues to punish poor communities with lower property values.
“Ever since (Claremont II,) the State has tried numerous mechanisms to avoid implementing an equitable tax system that would have the effect of imposing a fairer tax burden on wealthier towns, requiring the courts to intervene and protect the constitutional rights of New Hampshire citizens.
“Now, the State is primed to once again impose a tax using the same mechanisms previously held unconstitutional that will result in some taxpayers paying up to seven times as much for education funding as their wealthier counterparts,” the attorneys write in a new filing filed in Grafton County Superior Court.
The plaintiffs are seeking an injunction to prevent the state from setting a tax rate, asking the court to keep the Statewide Education Property Tax, or SWEPT, rate at $0.
SWEPT accounts for 30 percent of education funding in New Hampshire. However, as many as 34 wealthier communities in New Hampshire are keeping a portion of the money raised through the SWEPT, according to the lawsuit.
SWEPT started in 1999 as a response to the Claremont decisions, which found that the state has a constitutional obligation to fund an adequate education. The money raised, more than $360 million estimated in the coming year, is used to fund state adequacy grants.
According to the plaintiffs, wealthy communities raise more funds per pupil through SWEPT than the state’s low standard for what it asserts is the cost of a state-funded adequate education. Further, since 2011, the state has allowed these wealthy towns to keep the surplus, which flies in the face of the Claremont decisions, according to the motion.
“The SWEPT tax as currently administered is not uniform in rate as the State allows towns with surplus SWEPT funds to either set a negative local education tax rate to offset the State’s official equalized SWEPT tax rate or retain the excess,” the motion states. “Both of these mechanisms have been previously deemed unconstitutional by New Hampshire courts.”
This is the second lawsuit pending that challenges the state’s education funding scheme. In 2019, The Contoocook Valley Regional School District, based in Peterborough, sued the state claiming that New Hampshire’s adequacy grants of $3,636 per pupil per year isn’t nearly enough to cover the costs of an education.
Judge David Ruoff ruled in the ConVal case that the state needs to come up with a grant amount that meets the Claremont decision standards but declined to set a different figure for the grant. Last year, the state Supreme Court ruled Ruoff must hold a trial in order to determine a constitutionally acceptable adequacy grant amount. That trial in the case is set for next year in the Rockingham Superior Court.