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NH Supreme Court Stays ConVal Education Spending Ruling

New Hampshire taxpayers don’t have to pay a $537 million education spending bill just yet, as the New Hampshire Supreme Court stayed the decision in the ConVal lawsuit.

In a unanimous decision issued Wednesday, the Supreme Court put a hold on Rockingham Superior Court Judge David Ruoff’s November order that the state’s per-pupil spending must go up to at least $7,300. Ruoff had denied a motion to stay his decision pending appeal earlier this year.

Gov. Chris Sununu praised the stay decision, saying Ruoff’s ruling went too far.

“Today, the Supreme Court rightfully paused an attempt by one judge to usurp the power and preferences of both the legislative and executive branches,” Sununu said. “Grateful for the Supreme Court’s action to stay a decision that was so clearly overreaching.”

According to Senate President Jeb Bradley (R-Wolfeboro), implementing Ruoff’s order would wreck state finances, hurt lower-income communities, and eventually force an income or sales tax on Granite Staters.

“This decision could mean a $500 million spending increase for New Hampshire taxpayers and could cause reduced education funding for all the original towns that brought the Claremont education funding lawsuit by limiting the legislature’s ability to target special education aid to local school districts that need it the most,” Bradley said in a statement. “I remain optimistic that the Supreme Court will recognize that such huge financial decisions rest with representatives and senators that the people of New Hampshire have chosen.”

Lawmakers are looking for an affordable funding solution, and according to House Speaker Sherman Packard (R-Londonderry), the Supreme Court’s stay will give both houses time to keep working.

“We’re hopeful the Supreme Court has a different take on the matter than the lower court that will be less costly to taxpayers. The stay will allow the legislature more time to further analyze the situation,” Packard said.

The Peterborough-based Contoocook Valley Regional School District filed the lawsuit in 2019, arguing that the state’s education grant of $3,600 per pupil was far below the true cost and, therefore, unconstitutional. ConVal and the dozens of school districts that joined the lawsuit wanted closer to $10,000 per pupil.

Ruoff originally refused to set a dollar amount when he ruled the state violated the constitutional right to an adequate education, leaving that up to lawmakers. But a subsequent appeal to the state Supreme Court resulted in a 2021 order that forced Ruoff to come up with a figure.

Since the ConVal lawsuit was filed, lawmakers and Sununu have bumped up the grants to $4,100 per pupil, an amount Ruoff still found unconstitutionally low. Ruoff’s decision acknowledged it is up to the legislature to determine the funding but that it can be no less than the amount he set.

“What is the base cost to provide the opportunity for an adequate education 239 years after that fundamental right was ratified in our constitution? The short answer is that the legislature should have the final word, but the base adequacy cost can be no less than $7,356.01 per pupil per year, and the true cost is likely much higher than that. At a minimum, this is an increase of $537,550,970.95 in base adequacy aid to New Hampshire Schools,” Ruoff wrote.

The legal tussle over New Hampshire’s state spending for education “adequacy” is unrelated to another hot-button political issue: Taxpayers are already burdened with increasing education costs even as the number of students is declining.

The total cost of education in New Hampshire, including the portion paid through local property taxes, averages more than $20,000 per pupil. That’s up from about $11,000 total per pupil spending in 2000. Over the same time, the state’s student population has fallen by more than 20 percent. According to the Department of Education, student enrollment numbers in the Granite State have 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.

NH Taxpayers Now Spending $20k per Pupil on K-12 Education

Granite State taxpayers have broken the $20,000 barrier on school spending, even as K-12 academic performance remains flat and school enrollment declines.

“Last week, the New Hampshire Department of Education released its newest cost per pupil data for the 2022-2023 school year,” the department said in a press release. “The new statewide average operating cost per pupil of $20,323 is a 4.8 percent increase from last year’s average cost per pupil of $19,400. Total expenditures for the 2022-2023 school year were more than $3.8 billion in New Hampshire.”

To put the $20,323 in perspective, tuition to attend Bishop Guertin High School, a highly-ranked private Catholic school in Nashua, is $16,400. Mount Royal Academy is the highest-ranked Catholic school in the state. High school tuition is $10,700.

New Hampshire also spends far more per pupil than most of the nation. Across the U.S., the average cost per pupil is shy of $14,295, putting New Hampshire in the top 10 nationally for education spending. And as state Education Commissioner Frank Edelblut told NHJournal, taxpayer spending on public schools has been soaring for more than a decade.

“The statewide average for New Hampshire’s cost per pupil has increased by nearly 87 percent since 2000 when it cost less than $11,000 per student. During this same time frame, public school enrollment has dropped by about 20 percent statewide,” Edelblut said.

According to Edelblut, student enrollment numbers in the Granite State have 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.

Despite the massive increase in spending, Granite State students are struggling on achievement tests like the SAT. House Education Committee vice chair Rep. Glenn Cordelli (R-Tuftonboro) said it’s time to pay attention to the poor return on investment.

“It’s pretty evident that over probably a couple of decades, spending is going up, and achievement scores are pretty much flat,” Cordelli said.

New Hampshire’s 2023 SAT scores dropped off slightly again. The junior class scored 35 percent proficient in math compared to 37 percent in 2022 and 42 percent in 2021. Students also lost ground on reading proficiency in 2023, with 60 percent proficiency compared to 61 percent proficiency in 2022 and 63 percent proficiency in 2021.

Edelblut said the increasing cost per pupil is partly due to increasing costs, and partly due to the steady drop in the number of students. 

“While we have and will continue to work to expand resources for all students, it is clear that we are in a challenging environment of escalating costs and decreasing student enrollment,” Edelblut said. 

Some school districts manage to come in under the new average, with Manchester at $16,636, Nashua spending $18,107, and Bedford at $17,418. Concord is spending $22,190 per pupil, and New Hampshire’s highest cost per pupil is New Castle at $41,754, a little more than the $41,650 tuition at The Derryfield School, an exclusive private day school in Manchester.

The record spending for public school students comes as the legislature is being pressed to find a way to change the way public education is funded. New Hampshire relies largely on local property taxes to fund public education, with the state sending an adequacy grant to districts that average $4,100 per pupil.

The district responsible for New Hampshire’s current school funding scheme thanks to lawsuits in the 1980s and 1990s, Claremont, is spending almost $22,000 per pupil. The Contoocook Valley Regional School District, behind a lawsuit that could change New Hampshire’s funding system again, is spending more than $25,000 per pupil.

The recent decision in the ConVal lawsuit has the state under court order to increase the adequacy aid grant to at least $7,300. Cordelli said that increase puts New Hampshire on the path to an income tax. The ConVal decision is stayed as the state appeals to the New Hampshire Supreme Court, giving the legislature time to find another funding plan.

Parents and homeowners frustrated with high property taxes and poor achievement are going to demand changes, Cordelli said.

“At some point, the public is going to become aware, and something is going to happen,” Cordelli said.

Parents are already finding lower cost, and sometimes better quality, opportunities outside the public school system. Kate Baker Demers, executive director of Children’s Scholarship Fund New Hampshire, said the average Education Freedom Account grant in New Hampshire is $5,255, about a quarter of the new cost per pupil for public school students.

“So, if a parent taxpayer is concerned about the high spending and cost, they could choose an EFA and save the state $14,745 per child. Which is, what, the amount that other states spend in total?” Baker Demers said.

This school year, EFA enrollment went up 20 percent to 4,211 students in New Hampshire. Of that total, 1,577 are new to the program. Taxpayers are now paying a little more than $22 million for EFA grants.

Judge Sets $7,300 Per Pupil State Funding Minimum in ConVal Ruling

Just days after a New Hampshire Department of Education report showing public school enrollment plunging amid spending hikes, a judge has ordered the state to pay even more.

Rockingham Superior Court Judge David Ruoff released his long-awaiting ruling in the ConVal education funding lawsuit on Monday, declaring the state must pay a per-pupil minimum state adequacy grant of $7,356. The net cost to state taxpayers would be nearly $538 million per year. And, Ruoff said, that’s likely just the beginning.

“What is the base cost to provide the opportunity for an adequate education 239 years after that fundamental right was ratified in our Constitution? The short answer is that the Legislature should have the final word, but the base adequacy cost can be no less than $7356.01 per pupil per year, and the true cost is likely much higher than that. At a minimum, this is an increase of $537,550,970.95 in base adequacy aid to New Hampshire Schools,” Ruoff wrote.

Ruoff wasn’t done. In a separate ruling in the Rand vs. State of New Hampshire case, Ruoff ruled that property-rich communities can no longer keep excess Statewide Education Property Taxes revenue in reserve. That practice allowed these communities to set a negative SWEPT tax rate.

Ruoff initially tried to avoid setting a number in the ConVal case. He ruled for ConVal in 2019, finding that the state’s education funding system results in an inadequate amount per pupil, and is therefore unconstitutional. However, he originally ruled that it is up to the legislature to determine the number, not a judge.

After the state appealed, the New Hampshire Supreme Court ordered Ruoff to hold a trial and determine what the cost per pupil ought to be. 

Ruoff’s order still faces a possible challenge from the state. Gov. Chris Sununu called Ruoff’s decision an overreach.

“New Hampshire currently spends among the most per capita on public education than nearly any other state. Today’s decision is deeply concerning and an overreach into a decades-long precedent appropriately placed in the hands of our elected representatives in Concord,” Sununu said.

New Hampshire Department of Education Commissioner Frank Edelblut’s office declined to comment. Michael Garrity, communications director for New Hampshire Attorney General John Formella, said Ruoff’s decisions are being reviewed.

“We have received the court’s order. We will review it and consider potential next steps,” Garrity said.

But the Josiah Bartlett Center for Public Policy, a pro-education-reform think tank, immediately blasted the premise of the judge’s ruling, noting that education spending in New Hampshire has exploded, even as the number of students in the k-12 fallen drastically.

“NH public schools are not ‘underfunded’ and have not experienced a decline in funding this century. On the contrary, as school district enrollment fell by 30,000, spending, adjusted for inflation, rose by nearly $1 billion,” the Barlett Center posted on X.

As for the judge’s arbitrary price of an “adequate” education, the center responded:

“Trying to figure out the true cost of an adequate education by measuring what monopoly school districts spend is like trying to figure out the true cost of package delivery by measuring Post Office prices before the arrival of FedEx and UPS. Markets, not judges, set prices.”

But Democrats, who’ve been pushing for more state spending for decades, were delighted.

State Sen. Democratic Caucus Leader Donna Soucy (D-Manchester) is ready to start charging. Ruoff’s decision will be the template she and other Democratic lawmakers will use going forward as they look to increase school spending to at least the $7,300 minimum,

“Our caucus will closely review the court decisions released today, and we will examine legislative action to ensure that a constitutional formula is enacted,” she said.

Zack Sheehan, the executive director of the left-leaning New Hampshire School Funding Fairness Project, called the decisions big wins for students and property taxpayers. He said that the legislature’s refusal to fund education at the state level has pushed the bill down to local property taxes and burned homeowners.

“These are exciting rulings, but for their impact to be felt, the legislature has to get to work and bring our school funding statutes into line with this and all past school funding rulings,” Sheehan said. “The changes promised in the Claremont decisions have been denied to Granite Staters for too long already, so I want to see the state accept this ruling and not continue wasting time by appealing it to the New Hampshire Supreme Court.”

In actuality, New Hampshire hit a state-spending record on k-12 education in the current budget, while few communities cut their property taxes.

In deciding that $7,300 is the minimum adequate education amount, Ruoff used numbers provided by public school districts and the Department of Education. There was no data from public charter schools or private schools, Cline said. He added that it is like deciding what the price of a hamburger ought to be based on just the McDonald’s Big Mac while ignoring Burger King and Wendy’s.

“Markets, not judges, determine prices. That’s the fundamental flaw in this whole game. New Hampshire needs a market for educational services,” Cline said.

The ConVal and Rand lawsuits are the ideological, if not legal, sequels to the Claremont lawsuits of the 1980s and 1990s. In Claremont, the New Hampshire Supreme Court ruled all New Hampshire children have a constitutional right to an adequate education, and the state is on the hook to make sure that happens. The Supreme Court, however, left the funding details up to lawmakers.

The Peterborough-based Contoocook Valley Regional School District filed the lawsuit in 2018, arguing the state’s then-adequate education grant of $3,600 per pupil was far below the true cost and, therefore, was unconstitutional. ConVal and the dozens of school districts that joined the lawsuit wanted closer to $10,000 per pupil.

Since the ConVal suit was filed, lawmakers and Sununu bumped up the grants to $4,100 per pupil, an amount Ruoff still found unconstitutionally low. The total cost of education in New Hampshire, including the portion paid through local property taxes, averages just shy of $20,000 per pupil. 

The Rand lawsuit saw parents in property-poor towns challenging the way they claimed wealthier communities were able to game the SWEPT system, increasing the propeller of education funding inequality.

SWEPT accounts for 30 percent of education funding in New Hampshire. Under the law, as many as 30 wealthy Granite State communities keep a portion of the money raised through the SWEPT, while some poorer towns are paying more, according to the lawsuit.