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Kerry Bedard says in a lawsuit filed this week that she was fired as Lionheart Classical Academy’s first executive director after she warned the board about an unsustainable $10 million lease.

Bedard’s whistleblower lawsuit, filed in Hillsborough Superior Court, claims donor Ophir Sternberg pressured the board to fire her when she started questioning why the non-profit charter school was paying him a king’s ransom to lease the 30-year-old Peterborough warehouse.

“Kerry’s diligence and commitment to the success of Lionheart’s students would ultimately lead to her termination at the Board’s hands when Kerry committed the cardinal sin of questioning a disturbing financial arrangement between Lionheart and a ‘donor,’ Defendant Sternberg,” Bedard’s attorney, Craig McMahon, writes in the complaint.

Bedard’s been silent since her firing last summer. But the lawsuit airs her version of a tumultuous period for the school. According to the filing, Sternberg insinuated himself into the school with the promise of a $1 million donation. For that promise, he got naming rights, a lucrative lease contract, and key allies on the school board. 

In exchange, Lionheart Academy got a building that cost more than $2 million to turn into a functional school, on top of its costly lease, according to the lawsuit. As for the donation of $1 million, Sternberg’s promise was bigger than his delivery, the lawsuit states.

Bedard, who has a background in finance, politics, and leading nonprofits, was picked to be the executive director of the start-up Monadnock Classical Academy in 2021 by the original founders. She worked for months without pay to get the school off the ground, the lawsuit says, even writing the original charter.

But before it opened in 2022, the school’s name was changed to Lionheart as part of an agreement with Sternberg. A Miami-based entrepreneur, Sternberg, made a deal with Board Chair Barry Tanner to name the school after his business, Lionheart Capital. In exchange, Sternberg was offering to give $100,000 a year for 10 years.

According to Bedard’s lawsuit, that wasn’t the only agreement Tanner made with Sternberg. Tanner signed a 10-year lease on the 10 Sharon Road property Sternberg owns to use as the school. Tanner did not include Bedard or any of the other board members in the negotiations, the lawsuit states. 

Sternberg bought the mostly empty warehouse for $900,000 in 2020 and now had a lease with Tanner that would pay him $10 million in total by the end of the deal in 2031, according to the lawsuit. As for the $1 million donation, Tanner and Sternberg made another deal. Sternberg did donate $100,000 for the first year, but then got Tanner to agree to take the rest in the form of corporate shares that turned out to be worthless.

“Instead, in December of 2022, with Tanner’s acquiescence (and, with Tanner as Chair, board approval) Sternberg ‘donated’ shares of one of his companies, which could not be sold for approximately a year after the donation and required Sternberg’s approval to sell at all,” the lawsuit states. “By the time the shares could be sold, in November 2023 (and during an interim in which Lionheart had paid Sternberg and his companies hundreds of thousands of dollars in rent and other charges), the shares were effectively worthless.”

Bedard’s lawsuit states she tried to get Tanner and the rest of the board to do something about the lease and the exorbitant costs for the school. Bedard believes the costs are unsustainable for the school. But Tanner was more interested in defending Sternberg, the lawsuit states. 

“[Bedard] was utterly baffled by the Board’s resistance to doing anything of substance to address these issues. Indeed, then-Board Chair Tanner insisted, on multiple occasions, that there was ‘nothing to do’ about the issue, that the school had ‘no leverage’ and that the building’s owner ‘owes [Lionheart] nothing,’” the lawsuit states.

Bedard persisted in trying to warn the board about the unaffordable lease contract and the worthless shares, the lawsuit states. She presented a financial analysis to the board in early 2024 and made the case that Sternberg should be asked to donate the building instead of the shares, the lawsuit states.

Tanner left the board last year after pushing Bedard out. According to the lawsuit, Sternberg pressured Tanner and other board members to fire Bedard as a condition for him to make good on his donation pledge. 

What Bedard did not know at the time was that Tanner had a business relationship with Sternberg. Several months after they closed the lease deal for the school, Sternberg and Tanner joined up in an unsuccessful attempt to buy the Hancock Inn. Tanner never disclosed that relationship, and denied it for years, the lawsuit states.

“Tanner knew that his previous business partnership with Sternberg was inappropriate, which is why in the fall of 2024, he denied any such relationship in correspondence with the New Hampshire Board of Education,” the lawsuit states.

As a board member, Tanner should have signed a conflict-of-interest form disclosing his business partnership with Sternberg. After Sternberg confirmed the Hancock Inn partnership to NHJournal, public pressure forced the board to look for Tanner’s disclosure.

“[T]he Board announced in September of 2024 that it had lost those [conflict of interest] forms, including Tanner’s. Whoops!” the lawsuit states.

At the same September 2024 meeting, the board announced a new $5 million endowment from an anonymous donor. According to Bedard’s lawsuit, that donor is Tanner, and the endowment comes with strings.

“Tanner is the source of this donation, and that the donation is a strategic attempt by Tanner to buy back some credibility lost when he sold Lionheart’s name for some worthless stock and a $10,000,000 lease,” the lawsuit states. “On information and belief, this donation comes with strings attached, including a ‘hold harmless’ clause, requiring Lionheart to indemnify Tanner against any losses attributable to Tanner’s involvement with Lionheart, and a ‘clawback’ clause, allowing Tanner to take his donation back if his identity as the donor was revealed. Kerry thinks that if someone is going to try to buy their credibility back, he should do it publicly, with his name attached.”

The lawsuit is on file and public record, but according to the docket, Sternberg, Tanner, and the other named defendants have yet to be served. 

Miami real estate mogul Ophir Sternberg cares so much about education that he founded Lionheart Classical Academy in Peterborough, N.H., according to his company biography.

“Sternberg’s dedication to education led him to found The Lionheart Classical Academy, a chartered public school in New Hampshire. He is passionate about providing quality education to young learners. Sternberg’s notable titles and accomplishments, including his commitment to philanthropy through the Lionheart Academy, exemplify his entrepreneurial spirit and dedication to making a positive impact in his community,” the biography states.

But that’s not quite accurate. Sternberg did not found the school alone, and he is not among the handful of dedicated Monadnock area residents who worked together for months to launch the charter school. 

Instead, Sternberg is the landlord, the owner of the Sharon Road commercial property Lionheart rents for $38,000 a month. He also has the naming rights for Lionheart, named after his investment firm Lionheart Holdings, a currently publicly traded company. He won the name in exchange for a $1 million pledge that has not gone as planned, so far.

The charter school is pushing back on concerns of financial problems expressed by founder Fred Ward and parent Kevin Brace. The school’s board recently announced a $5 million endowment from an anonymous donor. Additionally, the board says it anticipates an audit report showing it is already on good financial footing, and operating at a surplus of more than $1,000 per student. The board is also denying claims it has met outside posted meetings. 

Sternberg’s connection to the school and former Board Chair Barry Tanner are among the issues made public recently. The entrepreneur began contacting the press this week to tell his side of the story in response to inquiries. Sternberg told NHJournal on Wednesday he cares deeply about the school and its mission.

“They are serving a real need for the community,” Sternberg said. “I hear great things about the school and the education the students are receiving there.”

Asked about the “founder” claim, Sternberg said Tanner and other people in the founding set consider him a “founding partner.”

“I was called the founding partner for my contribution to help get the school going,” Sternberg said. 

On Saturday, Sternberg provided NHJournal screenshots from several emails in which Tanner thanked Sternberg for his generosity.

“And Ophir, I want to personally thank you for partnering with us, supporting LCA with incredible generosity and friendship,” Tanner wrote in one email about the lease.

Sternberg also said Saturday he would change his company biography to reflect he did not found Lionheart Academy alone.

While Tanner is no longer on the board, he’s the one who negotiated the lease and the naming agreement pledge with Sternberg in 2021. Tanner and Sternberg also attempted to go into business together.

Sternberg acknowledged he and Tanner tried to buy the Hancock Inn in a partnership when the historic bed and breakfast went on the market a couple of years ago. The venture was never disclosed to the Lionheart community, but Sternberg said it had nothing to do with the lease and naming agreement. The Hancock Inn did not come up for sale until a few months after the Lionheart deals were done, he said.

Tanner declined to talk about his one-time potential business partnership with Sternberg when contacted last week. It’s since been learned Lionheart Academy’s board lost all copies of the signed conflict of interest statements board members like Tanner would have signed.

As for the $1 million pledge, Sternberg said the original agreement was for 10 annual payments of $100,000, with the first payment made in 2021. But, the following year, Sternberg and the board agreed to change the donation from cash payments to stock in one of his businesses. The stock, valued at $1 million, would not be accessible by the school for a year. By the time the school could sell the stock last year, it was virtually worthless.

“Publicly traded stock is always speculative,” Sternberg said.

If the company’s fortunes fared better, Lionheart Academy could have ended up with more than $1 million through the stock gift. Sternberg is adamant he will cover the donation balance, though he hasn’t made any more payments yet. The plan for the stock donation always carried his backstop guarantee to pay any difference if the stock was valued at less than $1 million.

The plan right now, Sternberg said, is to renegotiate the Sharon Road lease in order to give the school its donation through lower payments. 

Lionheart paid no base rent for most of the first year it leased the building in 2021, only paying $6,600 a month in maintenance expenses and taxes. But starting in the fall of 2022, the school made monthly base payments of $24,000 on top of maintenance and taxes. The base payment has been rising every year as the school expands and it is currently set to go to more than $29,000 a month on Oct. 1, with close to $9,000 more a month in maintenance and taxes. 

Lionheart isn’t the only tenant in the Sharon Road property. While the school will pay a total of $15.08 per square foot starting next month, Sternberg acknowledged the other tenant pays about $8 per square foot. 

“They’ve been there for many, many years before I got the building,” Sternberg said. 

Sternberg lives in Miami, but he spends summers in Peterborough, where he has a second “equestrian” home. Sternberg bought the Sharon Road property a few years ago and has no plans to sell, nor does he intend to give the property to the school where he’s a founding partner. He expressed surprise when asked if he would give the building to the school.

“I put the space up for a lease, and I agreed to make it as long-term as they would want,” Sternberg said.

The rent schedule attached to the lease Sternberg and Tanner signed runs through 2036, when Lionheart will be paying more than $60,000 a month. 

But among the concerns Ward has raised is the issue Lionheart Academy is now locked into perpetual fundraising, largely in order to pay large sums of money to founding partner Sternberg.

“I don’t really understand the controversy,” Sternberg said. “There are a few naysayers trying to create some controversy.”

Facing accusations of mismanagement and a potential conflict of interest, representatives for the Lionheart Classical Academy met with the state Board of Education behind closed doors on Monday.

Lionheart’s board of trustees representatives asked Board Chair Drew Cline for the non-public meeting to protect the reputations of the people discussed. The minutes for the hour-plus non-public meeting were immediately sealed, but it is likely the topic of discussion was the two letters sent to the BOE laying out concerns about the future of the charter school located in Peterborough.

Founder and major donor Fred Ward alerted the BOE last week about an alleged conflict of interest connected to the Sharon Road building the school leases for more than $24,000 a month.

According to Ward’s letter, written by attorney Richard Lehmann, former Lionheart Trustee Barry Tanner failed to disclose his business relationship with landlord Ophir Sternberg when he negotiated the lease and the naming rights.

Lionheart Academy takes its name from Sternberg’s Lionheart Capital. The $1 million donation Sternberg agreed to make in exchange for the naming rights has largely evaporated, according to Ward.

Lionheart parent Kevin Brace sent a letter to the BOE Monday morning with his worries, including the fact the trustees seem to have lost their conflict of interest statements.

“At the Sept. 12, 2024 LCA Board of Trustees Meeting, the board announced that it had lost the Conflict of Interest forms that the board signed at the May 2024 Board of Trustees meeting. It should be noted that Barry Tanner was the Chairman at the time of that meeting, and his disclosure is now missing. It should be noted that I requested these forms under Right to Know and the board never notified me that the documents were missing. In light of the allegations in Dr. Fred Ward’s correspondence to The New Hampshire State Board of Education, the fact that these documents are now missing is extremely alarming,” Brace wrote.

It is standard practice for boards to have members sign a statement acknowledging they understand the conflict of interest policy, or law, that applies to their institution.

Contacted by NHJournal, Tanner declined to discuss his business with Sternberg. According to Ward, Tanner and Sternberg sought to buy the historic Hancock Inn together around the 2021 time frame when the lease and naming deals were negotiated.

Brace, a former corrections officer with a background as a civilian police commissioner, started going to board meetings this summer after Executive Director Kerry Bedard was fired. He said he was shocked to find out what had been happening.

“As the parent of a child attending Lionheart, I could not sit back and watch an out-of-control board who allowed a landlord to overcharge for rent, accepted junk stock, and refuse to follow state law,” Brace told NHJournal.

Brace’s letter to the BOE raises several questions about the management of the board, including the concern the board is meeting illegally outside of posted meetings. Charter schools are legally public, and the boards are required to follow the same open meeting and public records laws as public school boards.

“On July 26th 2024, LCA Board of Trustees Chairwoman [Kimberly Lavallee] admitted to Commissioner [Frank] Edelblut, [Right to Know] Ombudsman Thomas Kehr, and I in an email that the LCA Board of Trustees had a meeting and took action that was never noticed to the public,” Brace wrote.

Brace also claims board members use a messaging app to conduct board business.

“I was notified by a parent that some LCA Board members were on an app called ‘Band,’ and that they were acting in their official capacity as board members. I requested a copy of those conversations, and the board did not turn them over to me,” Brace wrote.

One of the major concerns Ward raised in his letter, Lionheart’s financial stability, seems to be addressed thanks to a generous, anonymous donor. Hours after Ward sent his letter to the BOE last week, Lionheart announced it was getting a $5 million endowment from an unnamed individual. 

But Brace is worried the current board is not up to the task of managing a gift of that size.

“Given the LCA Board of Trustees track record of handling large donations, I believe the State Board of Education should examine this donation,” Brace wrote.

Sternberg agreed to give Lionheart $1 million in cash through regular $100,000 installments in exchange for the naming rights, according to Ward. However, after one payment was made, Sternberg’s donation was changed to a gift of stock in his investment company, according to Ward’s letter. The school was locked out from accessing that stock for about a year. By the time it was available to cash out, Lionheart’s stock was worthless, Ward states.

Both Ward and Brace are worried the school is stuck with a lease agreement that requires them to pay for upgrades to the building without a written stipulation they can buy the property at any point. Braces blames poor board oversight for this predicament.

“They were supposed to be working for the school, not the landlord,” Brace said.

It’s not clear yet if the BOE will take any action on the Ward and Brace letters. Brace told NHJournal he simply wants to make sure the school can continue educating students like his daughter.

“All I am asking for is for the State BOE to provide some much-needed oversight. I do not want the school to fail. It’s hard for me as a parent to trust that this current board is really doing the right thing, especially given their recent history of turning a blind eye and telling everyone that things are great,” Brace said.

Lionheart Academy is pushing back on founder Fred Ward’s concerns that the school is in financial trouble, touting a new audit and an anonymous $5 million pledge. 

Ward, who has given $700,000 to the Peterborough school, had attorney Richard Lehmann send a letter Thursday to New Hampshire Board of Education Chair Drew Cline outlining what he sees as red flags. A day after Ward’s letter was sent, however, Lionheart attorney Robert Best sent Cline a response calling Ward’s claim “outrageous.”

“Dr. Ward’s allegations are ill-informed, inaccurate, and frankly, defamatory. The school is shocked and saddened that a founder of the school would work in such a manner to attempt to damage the school,” Best wrote.

According to Best’s letter, the school expects a clean bill of health from the pending audit by the accounting firm of Nathan Wechsler. The school is doing so well, in fact, it anticipates paying off its operating line of credit in the coming months, Best wrote.

Lionheart’s Kimberly Lavallee did not respond to NHJournal’s request for comment on Thursday after Ward’s letter was sent to Cline. Hours after being contacted by NHJournal, the school also announced a pledge for a $5 million endowment from an anonymous donor. 

Best’s letter does not give many details on the $5 million gift. Instead, he focuses on the the school’s self-reported strong financial position. The school spends less per student than other charter schools audited by Nathan Wechsler, Best wrote, and Lionheart does a better job than other Nathan Wechsler charter school clients of attracting donations and grants.

Speaking to NHJournal last week, Ward said the school ran a significant operating deficit since it opened in 2021. His frustrations over the board’s lack of transparency and concern about the school’s future moved him to act, he said.

According to statements Nathan Wechsler accountants made during a board meeting after Ward’s letter was sent, Lionheart spent $7,862 per pupil in its 2024 fiscal year, and received $9,000 per pupil from the state, a surplus of $1,138 per child.

Best wrote the school is heading into 2025 with better than expected finances. 

“Lionheart’s FY25 financial position is ahead of budgeted expectations as of September, 2024,” Best wrote. “Lionheart exceeded its budgeted expectations on a number of revenue streams in FY 2025.”

But the new influx of donated dollars doesn’t address one of the main concerns regarding the school: the lease Lionheart has for its Sharon Road building. According to Ward, former Lionheart Board Chair Barry Tanner negotiated the $24,000-a-month lease with building owner Ophir Sternberg without disclosing he has a potential business relationship with Sternberg.

Sternberg, a Miami-based entrepreneur who resigned as chairman from the nearly bankrupt BurgerFi chain this summer, did not respond to a request for comment. Tanner declined to comment on his relationship with Sternberg.

Sternberg also negotiated naming rights for the school with Tanner. Sternberg owns Lionheart Capital and agreed to a $1 million donation in exchange for the naming rights. However, after making one $100,000 payment on that pledge, Sternberg changed the arrangement.

According to Ward, Sternberg gave the school stock in Lionheart Capital rather than cash. The stocks were locked as part of the agreement, and by the time the school could access the account last year, they were worthless, Ward contends. 

Best’s letter does not address the Sternberg/Tanner relationship, nor does he yet refute the concerns about Sternberg’s $1 million donation. Instead, Best promises a more detailed response soon.

“Lionheart also disagrees with and finds his allegations of poor board oversight or conflict of interest to be equally outrageous. We look forward to providing a more thorough response to those elements of his letter in the coming days,” Best wrote.

Lionheart is one of many new charter schools in New Hampshire that got start-up money from a $46 million federal grant to the state. Lionheart received $1.5 million in 2019 through the grant.

Lionheart uses a classical education curriculum developed by Hillsdale College, a non-denominational Christian school. Kristina Vourax, communications director for Hillsdale’s K-12 Education Office, reached out to NHJournal last week to put some distance between the college and Lionheart. 

“Lionheart is not part of our Member School network, nor do we work with its board or headmaster. In addition, the Hillsdale K-12 Education Office did not assist Lionheart in its founding effort,” Vourax stated in an email. “Lionheart has signed a curriculum license agreement with Hillsdale College to use our K-12 classical curriculum scope and sequence.”

Lionheart Classical Academy (LCA) in Peterborough was supposed to be the refuge for parents and families in the Monadnock region who wanted an escape from a secularized public education where unaccountable bureaucrats rule.

But now, the K-7 charter school is in danger of financial collapse after questionable board deals that were hidden from the public, according to Lionheart founder Fred Ward.

“We have two problems, and they are at war with each other,” Ward said. “We want that school to work. But the thing we’re pissed off at is that, the way they are going, they are going to go bust.”

Lionheart Classical Academy

Lionheart was one of the many tuition-free charter schools that got start-up funding from the state in 2021. A $46 million federal grant for New Hampshire to expand charter schools resulted in $1.5 million for Lionheart. The school officially opened in 2022 with grades K-5, with plans to eventually expand to a K-12 school.

Ward and Lionheart parent Kevin Brace are now calling on the state Board of Education to intervene. Ward’s attorney, Richard Lehmann, sent a letter to BOE Chair Drew Cline on Thursday laying out the alleged history of conflicts of interest, insider dealing, and a board of trustees that kept parents in the dark with illegal, non-public meetings.

“I was just shocked at the incompetence of the board,” Brace said. 

The school takes its name from the investment firm owned by donor and landlord Ophir Sternberg. Sternberg got former board chair Barry Tanner to agree to name the school after his Miami-based Lionheart Capital. Sternberg also owns the Sharon Road building Lionheart leases. The lease agreement obtained by NHJournal shows the base payments started at more than $24,000 a month in 2023, and going up three percent a year as the school uses more space in the building.

But, when the naming rights and lease agreements came together, Tanner hid the fact he was in a business relationship with Sternberg, according to the letter. 

“Dr. Ward and/or others have been told that Tanner and Sternberg together made an offer to acquire the Hancock Inn, in Hancock, New Hampshire when that property was listed for sale in the summer of 2021,” Lehmann wrote.

Tanner made his academy agreements with Sternberg without any transparency or board oversight, according to Lehmann. Reached Thursday, Tanner declined to comment on the letter, saying he has not seen it. He also declined to comment about his alleged business relationship with Sternberg. Tanner said he’s no longer on the board, but said he is still somewhat involved in the school.

“I’m just a fan, I guess you could say,” Tanner said.

Tanner still makes financial donations to the school, but declined to say how much he’s given. Ward, who like Tanner was part of the original founders group, has given $700,000 of his own money to Lionheart.

Sternberg did not respond to a request for comment.

But the lease isn’t the only red flag Ward and Brace see. Sternberg agreed to make a $1 million donation to Lionheart when he was first approached by Tanner. The initial donation was to be paid in $100,000 a month increments. But Sternberg changed the arrangement in 2022 to instead give the school stock in his company worth $1 million.

Sternberg’s stock donation, however, was locked up until the fall of 2023 and the school could not sell, according to the agreement. By the time Lionheart Academy could access the stock, it was worthless, Lehmann wrote. 

“Even though LCA effectively gave away its naming rights for no consideration, the Board appears to have done nothing to address the situation and protect LCA’s interests,” Lehmann wrote.

Brace said he only recently learned about the worthless stock because the board tried to keep the problem quiet for months. Brace has been sending his youngest daughter to Lionheart since it opened and has been an avid Lionheart booster and school volunteer. But he became concerned when Tanner and the rest of the board fired Executive Director Kerry Bedard this summer without explanation.

“I always thought the school was in good hands,” Brace said.

Brace started going to board meetings and was shocked by what he witnessed. The board members refused to answer questions, did not make records of past meetings available in violation of state law, and ignored charter rules about members.

Under the charter, the board is supposed to have two to three members from the professional or educational community, two to three members from the founder or major donors group, and one to two parents. Currently, they have one professional, two donors, and five parents on the board. 

Board Chair Kimberly Lavallee did not respond to a request for comment.

More troubling is the fact the current board has been meeting in secret, communicating about school business through a messaging app, Brace said. Charter schools receive public funding and their boards are subject to the same Right to Know laws as public schools. Other Lionheart parents just now learning about the problems are upset, Brace said.

“They are just appalled at the way the board has conducted itself. We put so much faith and trust in this school,” Brace said.

Ward is worried the financial situation will sink the school he helped create. Lionheart spends about $10,000 per pupil while getting about $9,000 per pupil from the state. Charter schools do not receive any direct funding from local property taxpayers the way public schools do. With about 250 students right now, that means the school is running a deficit of at least $250,000 a year, Ward said.

On top of that, the school’s growth plan is to add a new class every year. Next school year, it will go from a K-7 school to a K-8 school. That will add at least 40 students, increase the operating deficit, and further squeeze the classes. The school library already doubles as a classroom for two separate classes, Ward said.

“The money is running out, the space is running out, and the numbers don’t work,” Ward said.

The current board isn’t saying how it plans to close the financial gap, according to Ward. In the past, it relied on large donors like him. But Ward’s stopped giving and won’t start again until he gets some answers. And he’s telling others to do the same.

“I can’t recommend other people donate until the school cleans up its act,” Ward said.

Ward points to the Sharon Road lease as one of his prime concerns. Lionheart’s lease with Sternberg requires the school to pay for all of its expansion improvements as well as upgrades to the building’s HVAC and plumbing. And all of that expense is on top of the $24,000 a month in rent. However, after making all of the improvements, the school has no written agreement that it will be able to purchase the building outright at any point. 

“The money is going to improve Ophir Sternberg’s building. I’m not going to take money out of my pocket and put it in Sternberg’s pocket,” Ward said.

Ward and Brace want the state to step in and investigate LCA’s finances and its board. They also want the school put on probationary status until the whole picture becomes clear.

“In the face of the apparent conflict of interest, the disadvantageous lease provisions, the failure to address the failure of consideration in the naming transaction, and the failure to ensure that public funds are expended solely to benefit LCA’s public purpose, the need for immediate investigation and potential corrective action by this Board is clear.” Lehmann wrote.

Lehmann’s letter to Cline comes as Lionheart is scheduled to go before the state BOE next week. The school’s board of trustees is seeking approval to change the Lionheart charter to allow more parents on the board, effectively so the board is no longer in violation of its own rules.

Cline did not respond to a request for comment.

Lionheart offers a classical education based on the curriculum plan from Hillsdale College. The conservative, non-denominational Christian college operates the Barney Charter School Initiative to help start up charter schools across the country, or to assist independent charter schools like Lionheart. Lionheart is not a Christian school.

New Hampshire could see economic growth grind to a halt, tax rates explode, and the state government take control of local schools if the state Supreme Court upholds the rulings in the Rand and ConVal education funding cases.

That’s the scenario laid out by free-market think tank American Institute for Economic Research in its amicus brief filed in court this week.

The state is appealing the Superior Court rulings in the Rand and ConVal lawsuits which, if enforced, upend the current school funding system by bringing back so-called donor towns and adding more than $500 million of taxpayer money to the state adequacy grant system.

AIER Senior Research Fellow Jason Sorens told NHJournal school funding isn’t about left or right politics, but about avoiding negative consequences like ballooning taxes, anti-business and growth measures, and the loss of local control. 

“Should we encourage towns to have low property values? Should we punish towns for choosing to allow apartments or commercial development?” Sorens said.

Last year, Rockingham Superior Court Judge David Ruoff ruled in the Rand v. New Hampshire lawsuit the state’s Statewide Education Property Tax system is unjust since it allows communities with high property values to keep excess SWEPT funds, essentially paying an unequal tax rate than communities with lower property values.

Then in the ConVal v. New Hampshire case, Ruoff ruled in favor of the coalition of school districts led by the Contoocook Valley School District that argued the state is violating the constitution by failing to fund an adequate education. Ruoff ruled the state’s per-pupil adequacy grants need to go up from $4,100 per pupil to at least $7,300.

Sorens and AIER President William Ruger said they want New Hampshire to keep its current system and find other ways to fix education without restrictive government action or more taxes.

“School finance equalization has been a big driver of new taxes and unnecessary government growth across the country,” Ruger said. “AIER’s economic analysis shows that it has mostly been based on misconceptions about the alleged ‘inequity’ of locally funded education. With this case, we hope the Court will set a new precedent, based on sound economic reasoning, that vindicates local control of school funding and decentralized competition among governments.”

The old donor town system of transferring tax dollars from property-rich towns to property-poor communities will return if Rand is upheld, Sorens said. That system brings economic stagnation and real inequality.

Asked if he would describe the donor town system as a “progressive property tax,” Sorens said it’s worse.

“It’s punishing whole towns for having high property valuations, not individuals,” Sorens said.

Advocates for a state school system funded by handouts from so-called “wealthy” towns need to check their math, Sorens said. He pointed out the proposed plan would see people in Lebanon subsidizing education in communities like Brookline, despite the latter having one of the highest median incomes in the state. Meanwhile, Lebanon has one of the highest child poverty rates, Sorens said.

“It redistributes income from poor people to rich people,” Sorens said.

The Rand decision ignores the fact towns that encourage business, commercial enterprise, and housing tend to have higher property valuations. If donor towns come back, New Hampshire will see municipalities in an arms race to kill business, discourage building more housing, and drive out innovation with restrictive zoning laws, Sorens said.

“It incentivizes towns not to grow their property tax base,” Sorens said.

With ConVal, Sorens said nearly every school district in the state can already afford to fund an adequate education without the state adequacy grant. Instead, New Hampshire should give parents more options like more charter schools, more Education Freedom Accounts, and open enrollment for all public schools, Sorens said.

Vermont’s misguided attempt to fund its education system should serve as a warning to New Hampshire, according to Sorens. The 1997 Act 60 plan to pool all education property taxes in Vermont and send that funding to each district has resulted in a restrictive government that punishes communities for spending more on education money than poorer communities. Vermont has also taken away control of the education system from local boards and forces consolidation into large, regional districts.

“The state gets deeply involved in local budgeting and administration,” Sorens said. “We doubt many New Hampshire residents would be happy with their towns being forced to join these big regional school districts.”

Sorens may be familiar to Granite Staters as the man behind the Free State Project. He is credited with coming up with the plan to have libertarians move to New Hampshire in 2001 in order to enact a libertarian agenda. 

Inescapable realities about New Hampshire: Live Free or Die is the best state motto; we have better maple syrup than Vermont; and we may never stop fighting about the right way to pay for public education.

Everything about school funding is up for grabs this year, with new proposals coming out of the State House, a lawsuit heading to the state Supreme Court, and an open gubernatorial race putting free-market reforms in the spotlight.

“This is a great opportunity for us to have these conversations,” said Sarah Scott with Americans for Prosperity.

Scott and AFP hosted a forum last week at Throwback Brewery in North Hampton with state Reps. Glenn Cordelli (R-Tuftonboro) and Dan Maguire (R-Epsom) to educate people about the realities of the biggest tax bill in the state.

The problem is front and center for legislators this session, who are working on different proposals to address education spending without raising taxes. But whether they do that is up in the air.

Cordelli, vice chair of the House Education Committee, said there’s no guarantee conservative lawmakers can get meaningful changes since House membership is split so evenly. Republicans control the House with a slight majority, which can evaporate depending on the time of day. If the weather is bad, or several members are sick, or votes happen after lunch, the majority can flip.

“Every day, it’s a gamble which party is in charge depending on who gets to the State House,” Coredelli said.

But the local level is where taxpayers bear the largest education funding burden, Scott said. “Most towns spend between two-thirds and three-quarters of their taxes on education.”

And they could end up paying more, thanks to the recent court decision in the ConVal funding lawsuit. Judge David Ruoff ordered the state’s adequacy grant of $4,100 per pupil raised to at least $7,300. The ConVal ruling is causing more problems than it will solve, Maguire said.

“ConVal is the logical conclusion of 30 years of bad rulings,” Maguire said, who sits on the House Finance Committee. “At some point, we have to get off this track of unreality.”

The Supreme Court’s Claremont decision from the 1990s paved the way for adequacy grants and the statewide property tax. Currently, the state sends about one billion dollars a year to local schools in the form of adequacy grants and other aid programs. 

Under the current system, what each town gets per pupil varies. The base grant of $4,100 goes up for students determined to have greater need, and for students in communities that are considered property poor. However, Maguire said if Ruoff’s ruling stands, all of the extra funding for students and communities in need would go away. 

Ruoff’s ConVal ruling would seem to add at least $500 million to education spending on top of what is already being paid. But Maguire said it would result in all of the funding being replaced by a flat $7,300 per pupil grant, leaving poor communities scrambling again. 

Lawmakers are searching for a fix while the state appeals Ruoff’s ruling to the state Supreme Court. But state spending on education represents less than a third of total spending. The rest comes from homeowners through local property taxes, and those taxpayers are already shelling out more for less.

Department of Education data released this month show the new statewide average operating cost per student has reached a record-setting $20,323 for the 2022-2023 school year. That’s a 4.8 percent increase over last year’s $19,400 and close to a 90 percent increase on 2000’s $11,000 per pupil cost.

This year’s new average — well above the national $14,295 — puts the Granite State on track to spend $3.8 billion in total on education for the 2022-2023 school year.

Over the same period, student enrollment numbers in the Granite State cratered. The student population dropped from 207,684 in 2002 to 165,095 in 2023. That’s a decrease of 42,589 public school students, or about a 20.5 percent decline during the past 21 years. 

Coredelli sees an opportunity to deliver education in charter schools and the Education Freedom Account system with better results and lower costs.

“At the end of the day, the free market is the only way to make changes to education,” Cordelli said.

About 7,000 students are enrolled in New Hampshire’s charter schools. Those tuition-free public schools receive state funding of up to $9,000 per pupil and no local tax revenue. Instead, the schools are operated as non-profits and raise donations to cover expenses beyond the state grants.

The EFA program awards grants of around $5,000 per pupil to qualifying families, who are then able to put that money toward any education choice: public, private, or home school. EFA enrollment went up 20 percent this year to 4,211 while costing taxpayers about $22 million in total. 

Gov. Chris Sununu is quickly making education reform a priority during his two-year term. Just take a look at his Thursday budget speech.

“This budget and this administration recognizes local control in public education as the touchstone of policymaking, and that state government’s role in shaping education policy should be focused strictly on benefitting students and their families,” he said. “A major goal of this budget is to expand educational opportunity and choice for kids and their families.”

In his 2018-2019 biennium budget, Sununu focused on four areas of education reform that he wants to accomplish: full-day kindergarten, charter schools, higher education, and school building aid.

FULL-DAY KINDERGARTEN

Sununu’s proposal includes $9 million a year for full-day kindergarten. He said the funds, which would be awarded in addition to education adequacy grants, would target communities that need it most.

After his speech, Democrats sought clarity on how it would be determined which communities received funding.

“We also do not know from his presentation which communities will get full-day kindergarten and which ones won’t…” said New Hampshire Democratic Party Chairman Ray Buckley in a statement.

Sununu said the formula would be based on a community’s property wealth, the number of students on subsidized lunch programs, and the number of English as a second language students.

“So I am proud today to be the first governor to deliver a real full-day kindergarten program for communities across the state,” he said.

Some Democrats, including gubernatorial nominee Colin van Ostern, were in favor of requiring all school districts to offer full-day kindergarten. Sununu’s budget leaves the decision up to individual cities and towns, but if they opt for full-day kindergarten, they’ll receive more funds.

Regardless if a school district offers half-day or full-day kindergarten, they only receive 50 percent of the state’s per-pupil grant compared to students in other grades. Sununu’s proposal would give the neediest communities an opportunity for additional funds to make full-day kindergarten a possibility.

CHARTER SCHOOLS

In his speech, Sununu called for increasing charter school funding by $15 million.

“And in addition to fully funding the adequacy formula, funding for charter school is stabilized and enhanced in this budget by linking funding to the state’s average per-pupil expenditure,” he said. “This will increase funding for our charter schools by $15 million, helping eliminate uncertainty and volatility for administrators, teachers and parents.”

This is probably one of the more contentious proposals in his budget, and it will be interesting to see if that amount changes as it moves through the budget process in the Legislature.

All of New Hampshire’s 25 charter schools, except for one, rely mostly on state and federal funding, and all but one are not supported by local property taxes. In the Granite State, per-pupil expenditures for charter schools are about $6,500, which is lower than traditional public schools, which averages about $14,900 for the 2015-2016 academic year.

Sununu is a fervent school choice advocate and he’s hoping the Legislature passes charter school-friendly bills during the legislative session. Democrats claim charter schools take away state money that could go to improve traditional public schools, and they lack equal proportions of disabled or special needs students, who are then forced into the traditional public school system.

Senate Majority Leader Jeff Woodburn told NH1 News that diverting public school funding to charter schools “is the wrong direction. It doesn’t make our state stronger or our kids better.”

HIGHER EDUCATION

It’s often a criticism of the Granite State that the population is aging and young people are leaving . The million dollar question is how does the state plan on encouraging them to stay?

Higher education advocates see increased funding to the state’s community college and university system as a key investment into the future workforce of New Hampshire.

Sununu said he agrees, but university officials and higher education activists remain skeptical.

“Our higher ed system is a critical part of ensuring New Hampshire students have an opportunity to learn beyond their high school years and enter the New Hampshire workforce with real-world skills,” Sununu said in his speech. “My budget approaches post-secondary education strictly in terms of students and outcomes. The university and community college system of New Hampshire are key to these efforts, and we’ll continue to make investments in our partnership.”

He proposes a “significant increase” to the operating budget of the community college system, to the tune of $10 million for capital infrastructure investments.

However, it’s not immediately clear where those funds are coming from. A few months ago, New Hampshire’s Community College system asked lawmakers for about $49 million for 2018 and $52.5 million for 2019, an increase from about $44 million in the current budget.

In Sununu’s budget, it appears that the community college system’s proposed budget is the same amount of funding as in the current budget. He could pull the funds from infrastructure funds, but it wasn’t exactly clear where he would do that.

University System of New Hampshire (USNH) officials were not thrilled that they didn’t see an increase in their budget either. Sununu’s proposal would provide $81 million a year to the university system — the same level as the current budget. USNH asked for $88.5 million in 2018 and $93.5 million in 2019.

Without an increase in funding, it’s likely tuition will once again increase for the next academic school year at USNH colleges by no more than 2.5 percent for in-state students. The actual figure will be known later this spring after trustees set the rate.

In a statement, USNH “expressed deep disappointment” that the governor’s budget did not provide additional funding, which would have allowed the system to freeze or lower tuition for in-state students.

“Keeping our public, four-year colleges and universities affordable is not only critical for hard-working New Hampshire families, but also for the many businesses that depend on highly skilled talent to grow, thrive and succeed,” USNH Chancellor Todd Leach said in a statement.

Full time in-state tuition at UNH is $14,410 for the 2016-17 academic year. Room and board varies depending on the type of housing and meal plan, but costs range between $10,000 to $14,000 a year.

USNH receives the lowest state funding per capita of any university system in the county and tuition costs for New Hampshire students are some of the highest in the nation, which leads to students also having some of the highest student loan debt in the country after graduation.

Rep. Wayne Burton, D-Durham, and a former college administrator, criticized Sununu’s “cold shouldering of USNH.

“I’m deeply disappointed that Gov. Sununu, though professing the need for an educated workforce, shortchanged the principle player in that effort, our state university system,” Burton told the Fosters Daily Democrat.

Instead of increasing funds to the university system, Sununu proposed a new $5 million-a-year scholarship fund to assist high school students to attend colleges, universities or workforce training programs in the Granite State.

“We have to understand that not every student travels the same workforce path, and we need to build a system that provides flexibility to work within their lifestyle,” he said. “This scholarship program is designed, not to help 10, or 20, or even a 100 students, but at least 1,000 students each year, and we’ll open workforce gateways like never before.”

He said the Governor’s Scholarship Fund would be administered by a proposed commission and would be based, partially, on need.

SCHOOL BUILDING AID

The state is expected to end the current two-year budget with an $80 million surplus, and most of that money will be going to one-time expenses to fix roads and bridges, and provide school building aid through the “Infrastructure Revitalization Fund.”

“For the first time in a long time we’re going to give a boost to school building aid by granting dollars directly to communities to rebuild our classroom infrastructure,” Sununu said. “Specifically, schools with health and safety issues in towns that might not be able to otherwise address things like asbestos, lead paint, or other critical safety issues and these are where our school building aid will be targeted and funded.”

It’s unclear exactly how much of the $80 million surplus would be available at the end of the current fiscal year, and how it would it be allocated to cities and towns, but Republicans applauded the proposal during the governor’s speech.

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Some local headlines of the Betsy DeVos confirmation hearing showed Sen. Maggie Hassan making her mark early in her first term.

“Hassan emerges as fierce critic of Trump’s Cabinet nominees,” reads an article from the Associated Press. Hassan’s questioning of President Donald Trump’s nominee for secretary of education earned her 15 minutes in the national spotlight after she hammered DeVos on the Individuals with Disabilities Education Act and school vouchers.

But a look at Hassan’s record shows she has taken advantage of school choice, despite questioning DeVos about it.

Hassan sits on the Senate Committee on Health, Education, Labor & Pensions (HELP) and voted against DeVos’s nomination on Tuesday in a committee vote. The freshman senator, whose son has cerebral palsy, is an expert on public education for students with disabilities. Her son, Ben, went to public high school.

But DeVos has received a significant amount of criticism from Senate Democrats and the media due to her lack of experience in the public school system and for being in favor of school choice and school vouchers. The National Education Association (NEA) and the American Federation of Teachers (AFT) are also against her nomination.

However, six of the 10 Senate Democrats on the HELP committee attended private or parochial schools, or have children and grandchildren attending them, according to information obtained by The Daily Caller News Foundation Investigative Group.

Sens. Robert Casey Jr. of Pennsylvania, Sheldon Whitehouse of Rhode Island, and Michael Bennet of Colorado sit on the committee and have never attended public school, according to the investigation.

For Hassan, her husband Tom, served as the principal of the elite Phillips Exeter Academy, where their daughter, Margaret, attended, as well. Tom was censured last year for failing to disclose sexual misconduct charges against a faculty member.

Hassan received approximately $10,000 from the NEA during her Senate campaign and the union also spent $1.5 million against her opponent, incumbent Republican Sen. Kelly Ayotte. AFT also spent $4,400 against Ayotte.

“It’s just bizarre to see people who have exercised those school options suggesting that it’s somehow problematic or malicious to extend those options to all families,” said Frederick Hess, executive editor of Education Next, to the Daily Caller.

Hassan’s record on school choice is also revealing. While she was a supporter of public charter schools as governor, she did veto a bill that would enable small school districts to pay tuition, at public or private schools, for students of any grade level if it is not available within their resident district.

On a recent interview with NPR, Hassan reiterated her support for charter schools, but she took issue with DeVos position of a voucher system.

“I am a proud supporter of public charter schools here in New Hampshire, as well,” she said. “But there is a real difference between public charter schools, which can be established working with local communities and educators to fill a particular need in the public school system and provide more alternatives and more choice for learning styles and families – than a voucher system, which diverts money from the public school system, generally and often doesn’t cover the full cost of the private school that the student is attending.”

During DeVos’s confirmation hearing, Hassan also questioned her on her role in her family’s foundation, the Edgar and Elsa Prince Foundation. While it’s being debated if DeVos was accurate with statements during the hearing about having a role or not, she is also being charged that she and her family have donated extensively to groups which promote the idea that lesbian, gay, bisexual, and transgender (LGBT) students must undergo “conversion therapy.”

The claim comes from Rep. Mark Pocan, D-Wis., who cites their large donations to the Focus on the Family group as evidence. Politifact found his claim to be “Mostly False” saying they found indications that the group supports conversion therapy, but there was no evidence that they believe that LGBT students must undergo it.

A recent report by The New York Times, highlights another side of DeVos not seen in public. She has supported her gay friends and advocated for LGBT rights as far back as the 1990s. This shows her coming out in support significantly earlier than a lot of Democrats who are questioning her on these beliefs.

“At that time, two colleagues recalled, she made accommodations for a transgender woman to use the women’s restroom at a Michigan Republican Party call center,” the article states. She also used her political connections to help persuade other Michigan Republicans to sign a brief urging the Supreme Court to legalize same-sex marriage in 2015, though she did not sign it herself.”

“This aspect of Ms. DeVos’s personal story is not only at odds with the public image of her and her family as prominent financiers of conservative causes, but it also stands out in a nascent administration with a number of members who have a history of opposing gay rights,” the report continued.

Hassan has been a champion for LGBT rights in New Hampshire, dating back to her time in the state Legislature. In June 2016, she issued an executive order that banned discrimination in state government based on gender identity.  

However, her colleague, Sen. Jeanne Shaheen, hasn’t always been supportive of LGBT rights. Shaheen has announced that she will vote “no” on DeVos’s nomination.

As governor, Shaheen initially opposed same-sex marriage. After Vermont signed into law a “civil union” bill in 2000, Shaheen said she didn’t support it.

“I believe that marital unions should exist between men and women,” she said at the time.

However, she came out in favor of marriage for same-sex couples in 2009 and became a sponsor of the Respect for Marriage Act in the U.S. Senate. She also voted in favor of the repeal of the “Don’t Ask, Don’t Tell” policy in the military and supported government recognition of same-sex spouses of military members and other government personnel.

Although Hassan and Shaheen didn’t mention DeVos’s stance on LGBT student rights when they said they wouldn’t vote in favor of her nomination, it is interesting to note the differences in time of support between them of LGBT causes.

Shaheen agrees with Hassan, saying that DeVos is “unqualified” to be the next secretary of education. The full Senate is expected to vote on DeVos’s nomination on Thursday.

During the seven-hour hearing for Frank Edelblut’s nomination as the state education commissioner, there were several comparisons of the former state representative to Betsy DeVos, President Donald Trump’s pick for secretary of education.

Edelblut is to NH as DeVos is to US. We can do so much better on both levels. #nhpolitics

— Gerald W.R. Ward (@wardports) January 31, 2017

Both DeVos and Edelblut have little experience with the public school system. They are both strong supporters of school choice.

While Edelblut is a product of public schools himself, he and his wife homeschooled their seven children. Edelblut did receive his bachelor’s degree in business at a public institution, the University of Rhode Island, and eventually received a master’s in theological studies at the Holy Cross Greek Orthodox School of Theology.

Since 2009, Edelblut has served on the board of the Patrick Henry College Foundation, which is partnered with the evangelical Christian college in Virginia. This affiliation became a contentious point during his hearing between Edelblut and Democratic Executive Councilor Andru Volinsky of Concord. According to the college website, affiliates of the school must attest to a “Statement of Biblical Worldview” and follow “God’s Creative Works,” which is the belief that God created humanity and started with Adam and Eve as the basis for human ancestry.

“You will be the chief educator to whom all of the science teachers in our state will report,” Volinsky said. “Do you subscribe to this such that the science teachers need to worry about whether you will require creationism to be taught alongside evolution?”

Edelblut said he believes “there are other understandings of human origins.”

“And finally, as the commissioner of education, I will not have jurisdiction or responsibility for the development of curricula,” he said. “That I believe remains in the domain of the science teachers and the local school boards.”

And that’s where advocates for Edelblut believe that his lack of public education experience could be one of his biggest strengths.

With Gov. Chris Sununu’s nomination of his former Republican gubernatorial primary rival (Edelblut came in a close second, only losing by about 800 votes), it signals a departure from previous state education commissioners, who all had some sort of public education experience. It was a point Volinsky wanted to make, by reading the resumes of every education commissioner for the past 40 years.

But Sununu doesn’t want another career educator in the driver’s seat. He wants Edelblut, a businessman, to be in charge of this billion dollar industry. Many opponents don’t like that he’s against Common Core and is pro-charter schools. And they say he’s looking to “destroy public education.”

“Nothing could be further from the truth,” he said. “I want to see public education work well for all students. My job will be to implement the policies of the state board of education.”

The state board of education sets policy, curriculum, and standards for the public schools in the state. While the state education commissioner plays a role in the process, it’s ultimately not up to him to make those decisions.

Edelblut said he supported outgoing education commissioner Virginia Barry’s focus on “personalized learning.”

“Home education is personalized learning,” he said. “It recognizes that each individual student is unique, that they develop differently and at different paces.”

The same sentiments could be found in DeVos’s confirmation hearing earlier this month.

“Parents no longer believe that a one-size-fits-all model of learning meets the needs of every child,” she told the Senate Committee on Health, Education, Labor and Pensions. “And they know other options exist, whether magnet, virtual, charter, home, faith-based or any other combination.”

DeVos attended a private high school in Michigan and also received a bachelor’s in business from Calvin College. Her four children all went to private school and although she has never worked in a school, she is very philanthropic toward school systems that she personally supports. She backs school choice and school vouchers, allowing students to attend private schools with taxpayer support.

DeVos has been one of the most contentious cabinet nominees for Trump. But it can be argued that Trump and Sununu are looking at education in a similar manner. Trump sees DeVos as a strong advocate for school choice and able to use the budget for the education department to make education better for all students.

Both DeVos and Edelblut don’t necessarily have that much power when it comes to changing policy in the positions they will likely hold. They help set the agenda, but ultimately, any changes go through Congress and the states, and in New Hampshire, that means through the state board of education and the Legislature.

It’s no surprise that Trump and Sununu are facing a lot pushback on their respective nominees for education. After all, Sununu was one of Trump’s supporters during the presidential race, his support never wavering. But many supporters of the two politicians appreciate the comparison of Edelblut and DeVos. They both symbolize change and a departure from the Democratic “status-quo,” they have felt for the past eight years in D.C. and 12 years in the Granite State.

The people of New Hampshire should expect more similarities between the federal government and New Hampshire (or with Sununu and Trump) to pop up during the next two years.

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