By GARRY RAYNO, InDepthNH.org
BRENTWOOD — The Rockingham Superior Court judge hearing the latest challenge to the state’s education funding system told attorneys Wednesday he believes the case is ripe for a summary judgment.
The question is whether Judge David Ruoff rules on the question of the constitutionality of the state’s administration of the Statewide Education Property Tax or on another education case claiming the state is not meeting its constitutional obligation to pay for an adequate education for the state’s children.
He noted while the two cases are somewhat related, he believes there are no disputes among the parties in Rand Vs. The State Of New Hampshire about the evidence related to the statewide property tax.
“The statute says what it says. There is no factual dispute about the evidence here, how it is calculated, how it is applied, how it is collected, … there is only a legal conclusion to draw,” Ruoff said at the end of an hour-and-a-half hearing. “I believe it is ripe for a summary judgement one way or the other.”
The three sides — the plaintiffs, the state and the intervenors for property wealthy towns and cities — did not dispute his conclusion, although the Senior Assistant Attorney General Sam Garland said his only concern was if the judge ruled for the plaintiff and ordered the political branches to take a specific action.
Ruoff also said if either losing side were going to appeal his decision, he could send it to the Supreme Court without a decision, but that was not met with agreement as the plaintiffs said they seek a decision, while the attorney general’s office said it would make sense just to send the issue to the Supreme Court.
Ruoff said he has yet to make a decision on the ConVal case and is not sure which would come first, that decision or his ruling on the summary judgment motion made by the plaintiffs and then the state.
The trial for the case is scheduled for September.
Before Ruoff’s discussion with the attorneys, the Plaintiffs, who include commercial and residential property owners in Plymouth, Concord, Hopkinton and Newport, defended their claim the state’s administration of the Statewide Education Property Tax (SWEPT) is unconstitutional because it creates different effective rates across the state violating the proportional and reasonable taxation clause in the state constitution.
The legislature in 2011 passed a law allowing towns and cities that collect more in statewide property tax revenue to pay the state’s adequate education obligations to retain the excess money for educational purposes, and allows a number of unincorporated places to set their local education tax at a negative number to avoid paying the SWEPT.
When the SWEPT was first enacted by the legislature to address the Supreme Court’s Claremont lawsuit decisions, the excess money was sent to the state to be redistributed to communities that struggled to pay for public education.
The plaintiffs contend the 2011 change effectively reduces the property tax rates of the wealthy communities and unincorporated places, while increasing the rate for property poor and the other communities who would have benefited from the additional money if the rate was truly uniform.
The plaintiffs’ Attorney Michael Jaoude of White and Case told the court the Supreme Court ruled an education is a fundamental right that the state must pay for as all citizens benefit from it and must equally share the burden of providing it.
“No resident should have a greater burden for funding that constitutional right than another,” he said.
But the state has fallen to the pressure from wealthy communities and has repeatedly tried to devise ways around the court’s ruling which has already declared such schemes unconstitutional in opinion on former Gov. Jeanne Shaheen’s ABC plan and in the case brought by Londonderry about equal distribution.
But Ruoff noted the state’s and intervenors’ argument that the question is a matter of timing. In the ABC plan, the abatement went to taxpayers before they paid the tax, while now the SWEPT is assessed at a uniform rate, and then the legislature has decided to let those with excess revenue spend the excess money on education.
But Jaoude said what you have to look at is the effective rate, whether it was in the abatement scheme or by allowing communities to retain the money or not collect it, the effective tax rate would be the same no matter what the timing.
He said in some communities property taxpayers are paying only 51 cents per thousand and in others they are paying $1 per thousand although it is supposed to be uniform.
The 2011 bill was designed to eliminate donor towns and protect those towns from contributing financially to the education of other towns’ children, Jaoude maintained.
Ruoff noted that the plaintiffs appeared to be saying the Claremont decisions created a special exemption for proportionality for taxes strictly for funding education.
Jaoude said in all its ruling the court relies on education being a fundamental right paid for with proportional tax rates, while a disproportionate rate under SWEPT does not fall under that arrangement.
And he noted allowing towns to retain the excess money or not pay through negative tax rates is money not going into the Education Trust Fund which the statute required it to do.
Garland argued the plaintiffs’ argument focuses on how the tax is administered in a small number of communities in order to say the tax is unconstitutional on its face.
But Ruoff reminded Garland only one person has to pay a disproportionate tax for it to be unconstitutional.
But Garland said the plaintiffs have now shown the statute itself is unconstitutional, and not that tax setting, tax collection and tax distribution are all separate questions.
Nobody is claiming the act of setting the rate of the SWEPT is unconstitutional or that the money needs to be distributed proportionally because it is not, he said, noting money is often distributed disproportionally to different communities or individuals by the state.
There is no constitutional provision taxpayers have to benefit equal to the amount of the taxes they paid, Garland argued.
He noted the plaintiffs rely greatly on one sentence in a non-binding advisory opinion by the Supreme Court for the basis of the argument.
“We’re not talking about abating taxes,” he said, but Jaoude said later that a similar sentence appears in the court’s Londonderry decision as well.
Garland also noted the plaintiffs have not proposed a remedy and said if Ruoff does rule in their favor he should not propose a fix that would be very disruptive to communities in the middle of their tax year.
The intervenors’ Attorney John-Mark Turner agreed, saying any sort of remedy should probably hand it back to the political branches for action particularly if it comes in context with the ConVal case.
That case had discussions that would set the cost of an adequate education at about $10,000 per student. The current adequacy cost is about $4,100 per student in the budget passed last month by lawmakers, which overhauled the education distribution system and parts of the formula, while adding about $175 million more over the next two years.
Ruoff told the attorneys any decision in either the ConVal case or the SWEPT case would probably be about 60 days away.
Garry Rayno may be reached at garry.rayno@yahoo.com.