Will latest school lawsuit force a broad-based tax?
Will latest school lawsuit force a broad-based tax?
Fourteen communities, including Concord, Merrimack and Londonderry, that lose school aid for the next school year have filed a suit in Supreme Court in an effort to force the state to pay for an adequate education for every child.
While lead attorney Bill Chapman said the plaintiff communities would let lawmakers decide the right dollar amount per student, because that’s the job of the Legislature, Londonderry School Board Chairman Steve Young suggested a minimally adequate education should cost $6,000 for each of the state’s more than 200,000 public school students. The Legislature has earmarked $472 million for school districts, about $2,360 per student.
Asked if he supports a broad-based tax to come up with the balance, Young called such a proposal the “third rail” of school funding. He did list some options that he thought would be able to amass the kind of money sought by the plaintiff communities — a sales tax, an income tax, a tax on vacation homes and expanded gambling.
“I’m not going to be the one to tell lawmakers which one to choose,” Young said. “I don’t know the solution. It’s up to the Legislature. But towns voted on their school budgets in March. In July, we found out our state revenue was less.”
The Londonderry official also said that municipalities getting more money than they expected won’t be able to spend their windfall without scheduling a special school meeting to change their budgets.
Eugene Van Loan, a Manchester lawyer, has written extensively about the Claremont cases. He thinks the Supreme Court rulings were wrong in 1993, 1997 and ever since. But if the court stands by its past reasoning, he thought the new law, House Bill 616, would fail. That’s because it claims to fund an equitable, and not an adequate, education.
“Does it make any difference what the Legislature calls it?” Van Loan asked. “Or is the test whether it does what the court asks for?”
According to Van Loan, the high court issued an advisory opinion shooting down a similar plan four years ago. That plan made sure every town could fund its own schools, but the state paid only part of the tab.
“I hope the court takes this opportunity to revisit the Claremont cases,” Van Loan said. “There are few constitutional scholars who believe the court accurately determined the meaning of the constitution. It’s bad public policy to strike down a perfectly sensible law that helps the needy and not those who need no help.”
According to Chapman, Attorney General Kelly Ayotte wants to remove the case to Superior Court, a move that would delay a high court ruling by many months.
“It’s our position we’re presenting an issue of law,” Chapman said. “The case does not need to be developed through testimony or a lot of exhibits. If the court takes our case, there is a reasonable likelihood they could declare the law unconstitutional by mid or late fall. That would give the legislature all of the 2006 session to come up with a law that meets the constitutional principles the court has set out.”
A history of rulings
Ayotte in the spring gave lawmakers a summary of the Supreme Court decisions on school funding to help them draft a new formula. The court ruled in its Claremont I opinion of 1993 that the state’s constitutional duty to cherish education means “in no uncertain terms, that the state provide an education to all its citizens and that it support all public schools.”
Claremont II, issued in 1997, let lawmakers decide the cost of an adequate education, but required paying for it with “taxes that are equal in rate and proportional in valuation.”
The same opinion required fairness to needy towns, because “imposing dissimilar and unreasonable tax burdens on the school districts creates serious impediments to the state’s constitutional charge to provide an adequate education for its public school students.”
In 1998, the court said former Gov. Jeanne Shaheen’s ABC plan was unconstitutional. It included a statewide property tax with abatements for donor towns to phase in the burden for towns hit hardest. HB 616 arguably does the same thing, letting towns like Londonderry keep 85 percent of their previous grants. That aid would be less without this interim aid. Some towns would get everything right away.
In 1999, the court found it unlawful to phase in a $6.60-per-$1,000 statewide property tax over five years. The judges required taxing all property in a similar class at the same rate. In 2000, the court said the state has to do better than support education in poor towns. It has to “underwrite the cost of an adequate education for each educable child.”
In 2002, the court said the statewide property tax has to rely on true equalized values among towns, not just within a town. That’s when the Department of Revenue Administration began making towns revalue their tax bases at least every five years. The judges also required the Legislature to be specific in defining an adequate education.
State Sen. John Gallus, R-Berlin, agreed that the new law funds less than an adequate education. In his opinion, the towns losing money are returning the money they received at poor towns’ expense a few years ago.
“We’re picking figures out of the air and trying to make them doable,” Gallus agreed. “You could say the state is responsible for 100 percent, but it’s still the same taxpayers paying. We tried to be fair, and we assured that adequacy happens for every school district.”
The statewide average pupil cost is $8,741.59, with Waterville Valley spending the most, $21,328.30. Weare spends the least, $5,634.45. Fifty-four percent of 10-graders at John Stark Regional in Weare scored less than proficient in reading last May. The same figure was 64 percent in math. That’s an improvement over 2004, when 63 percent rated less than proficient in English and 71 percent in math. Milton spends $5,792.11 and gets even worse results: 79 percent less than proficient in math and 74 percent in English.
Londonderry school superintendent Nate Greenberg said his coalition has raised $153,000 for legal fees.
“Claremont II says no towns should have a greater burden than others,” Greenberg said. “The new law targets aid without deciding what an adequate education should cost. We feel the court will find that unjust and unconstitutional. We don’t believe equitably insufficient equals adequate.”
Rep. Joy Tilton, D-Northfield, said she reluctantly backed HB 616 after casting an early protest vote. She wanted to get rid of the statewide property tax entirely.
“We had to have something in place,” Tilton said. “After much soul-searching, the governor thought this bill was the best we could do. This way the people who need help the most will get it.”
Rep. Ed Gionet, R-Lincoln, was glad his town, one of the poorest by income, is no longer a donor town. (Three donor towns remain under HB 616: Jackson; Hebron; and New Castle.) He gives the lawsuit little chance of success.
“Nothing is perfect the first time around,” Gionet said. “But if we have to raise a lot more money, I have a retained bill to permit a casino in the White Mountains.”
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This article appears in the September 2 2005 issue of New Hampshire Business Review