City settles lawsuit over education aid
NASHUA – Abandoning its claim to nearly $3 million, the city has accepted $125,000 in settling its lawsuit against the state over education funding.
The board of aldermen released information about the settlement following a special nonpublic meeting Tuesday night. The closed session immediately preceded the board’s regular meeting.
The amount of the settlement is slightly more than half of what the city paid for attorney fees in the case. The city paid the law firm of Sullivan & Gregg about $60,000, according to Mike Gilbar, the city’s chief financial officer.
“The City hereby acknowledges that the purpose of this settlement is to buy peace from any and all future litigation . . .” according to a statement drafted jointly by attorneys for the city and state.
“It is expressly understood that the payment of the amount of ($125,000) is not in any way an admission of liability on the part of the State . . .” the statement said.
Information released by aldermen also notes there will be “no costs, no interest, no attorneys’ fees, nor further action for the same cause.”
At issue was an education-funding bill – House Bill 616 – that took effect in 2005. Under its provisions, the city received $2 million less in state education funding than it did the previous year.
Two weeks before the bill took effect, the city filed a petition in Hillsborough County Superior Court seeking a declaratory judgment to recover the money it stood to lose. That petition was denied, and on appeal, the state Supreme Court remanded the case back to Superior Court, ordering the court to consider the city’s claim for money it would have received had HB 616 not been enacted.
The city then filed a petition this past April 11 seeking relief.
Among other points, the city argued that under HB 616 “there is no longer any connection between the state’s funding of education and the cost of a constitutionally mandated adequate education.”
The city also argued that “despite its best efforts” Nashua in fiscal years 2005 and 2006 suffered a real financial loss “at the hands of reckless state officials.”
Nashua’s suit also claimed the state used the wrong figures when factoring in property values, by relying on 2002 figures instead of those from 2003. The outdated figures cost the city nearly $3 million in aid, attorneys argued.
In testimony, former Mayor Bernie Streeter said the cost of education had “increased immeasurably” during his tenure.
Streeter said lower state education aid directly increased the local tax rate by 1.5 percent. He accused legislators of “playing pretty fast and loose” with the various education funding formulas.
“This is coming directly out of the pockets of people who own property in Nashua,” he said.
The city’s current mayor, Donnalee Lozeau, said the money came from the same taxpayers whether it’s channeled back to education through the city or through the state. The same is true of federal money the city receives, she said.
“It still comes from the same pockets,” Lozeau said.
“This was one of the things that started before my watch,” she said of the lawsuit.
A former state representative and deputy House speaker, Lozeau said she thought it was a bad idea to sue the state in the first place.
“I don’t think you build a partnership with the state by suing them,” she said.
As for the amount of the settlement, Lozeau said that the $125,000 was a figure that “seemed to make sense.”