By GARRY RAYNO, InDepthNH.org
CONCORD — The state wants a Rockingham County Superior Court judge to consider its decision on the Statewide Education Property Tax final so it may be appealed to the state Supreme Court.
The state filed the motion Tuesday along with a motion to halt the implementation of the order finding the state’s administration of the tax unconstitutional and ordering the Department of Revenue Administration to collect the revenue property wealthy communities are now allowed to retain and to stop setting negative local education property tax rates for small communities or unincorporated places with few or no students.
By declaring the court’s Nov. 20 decision on the SWEPT’s constitutionality final, the state can then appeal it to the state Supreme Court under court rules.
One of the attorneys bringing the suit, Rand vs. the State of New Hampshire, Andru Volinsky, said they have agreed to the state’s motion for a final decision provided the state agrees to expedite the appeal and waiver the production of a transcript, but oppose the motion to stop the order and go to trial on the remaining issues in the Rand case from going forward.
The suit also claims the state has failed to provide funding for an adequate education and relies on local property taxes to pay the difference, which would require the tax rates be equal in all communities under the constitution’s proportional and reasonable clause.
The plaintiffs also raise issues with the differentiated aid that is included in the state’s current education funding formula.
In his ruling, Superior Court Judge David Ruoff found the state’s method of administering the statewide education property tax to be unconstitutional as it allows for differing rates when property wealthy communities are allowed to retain excess money raised to meet state adequacy costs, and for the Department of Revenue Administration to set negative tax rates for some districts with no or few students.
Ruoff cited Chief Justice Doe who wrote more than 100 years ago “A state law selecting a person or class or municipal collection of persons for favors and privileges withheld from others in the same situation . . . is at war with a principle which this court is not authorized to surrender.” . . . In the field of taxation, the principle of uniformity and equality of rights is of paramount importance and has been embodied in the ‘proportional and reasonable’ language of Part II, Article 5 of our State Constitution since June 2, 1784.”
Under the decision, the property wealthier communities may no longer retain the excess revenue but must send it to the Department of Revenue Administration beginning with the budget year that begins this fall.
But the state argues in its request to stay the order, the DRA has no legislative granted authority to collect the additional revenue from the property wealthy communities, nor a mechanism to hold it or account for those who did not pay the tax. And likewise would be unable to determine what the impact would be on the communities with negative local education tax rates.
“The DRA lacks express statutory authority to carry out these activities; thus, if a municipality does not remit excess SWEPT voluntarily or chooses not to collect delinquent SWEPT payments, the DRA has no statutory authority to compel municipalities to do these things,” the state writes in its motion.
For the reasons listed the state says a stay in the order is justified.
In its motions, the state does not say whether it will agree to an expedited appeal or the waiver of the transcript requirement.
Ruoff will have to decide if the stay is justified.
Earlier this month, the state asked the court to stay its other Nov. 20 order finding the state has failed to provide the funding for an adequate education as required under the constitution and setting the bar no lower than $7,356 per pupil, up from $4,100. In his order, in Conval School District vs. the State of New Hampshire, Ruoff acknowledged the figure should probably be much higher at around $9,929 per pupil, and that the final decision will be the legislature’s to make.
The new adequacy figure would require the state to increase state aid to public education by $532.6 million. The legislature increased state aid this biennium by $169 million.
The state asked Ruoff to stay his order until an appeal is decided and a full legislative cycle of one year before it would go into effect.
That would mean the ruling would not take effect July 1, 2026, although there is nothing to stop the legislature from acting as early as the upcoming session.
The state also contends, as it did during the superior court trial, that the legislature has sole authority to pass laws, and consequently the decision violates the separation of powers provision of the state constitution.
The state asked Ruoff to reconsider his order on the Conval case.
Garry Rayno may be reached at garry.rayno@yahoo.com.