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Advocates of a state income tax to fund public schools suffered a setback Tuesday when New Hampshire’s Supreme Court ruled the current Statewide Education Property Tax, or SWEPT, is constitutional.

The case, Rand v State of New Hampshire, was the first of two education funding lawsuits launched in hopes of upending the current property-tax-based system. Still looming is the ConVal ruling and its potential $500 million per year price tag.

In a 3-1 decision, the Supreme Court overruled Superior Court Judge David Ruoff, who had declared that the way money is collected is unequal across the state and unfair. He also ruled against the state’s current education spending formula in the ConVal case.

Though the cases aren’t connected, opponents of the ConVal lawsuit were heartened by Tuesday’s ruling, seeing it as a hopeful sign of how the court may be leaning.

New Hampshire’s constitution requires that taxes be applied at the same rate for every community, and Chief Justice Gordon MacDonald wrote in the majority opinion, the current SWEPT law does just that.

“The State Constitution requires that taxes, as ‘impose[d] and lev[ied],’ must be ‘proportional and reasonable.’ N.H. CONST. pt. II, art. 5. The plaintiffs do not dispute that under the SWEPT, as administered, taxpayers are actually assessed at a uniform rate. That concludes the constitutional inquiry,” MacDonald wrote.

The majority ruling states that since every community that collects SWEPT is also allowed under the law to keep excess revenue, there is nothing unconstitutional in the fact that some wealthy communities use the extra revenue to lower local taxes.

The Rand plaintiffs wanted SWEPT suspended since some wealthy towns with high property values collect more SWEPT than needed for education. Under the law, the SWEPT rate is set by the state, but the municipalities collect the revenue and then send it to their local school districts. The law allows towns that collect more SWEPT than required to use the excess revenue to lower local tax rates. The Rand plaintiffs argued that this allowed wealthy communities to effectively have lower tax rates than poorer communities.

Dissenting Associate Justice James Bassett argued that the fact some wealthy communities use SWEPT to lower the local SWEPT tax burden, means those wealthy communities are effectively getting taxed at a lower rate than poor communities, a violation of the constitution.

“To the contrary, when excess SWEPT funds are not sent to the State, but instead are retained by communities, the taxpayers’ effective SWEPT rate in those communities is reduced and Part II, Article 5 is violated,” Bassett wrote.

All four justices agreed that the state’s practice of setting lower SWEPT rates in a few poorer communities does violate the constitution.

(The fifth Supreme Court Justice, Anna Barbara Hantz Marconi, is on leave after being indicted for two felonies and five misdemeanors relating to her attempts to interfere with a criminal investigation into her husband, Geno Marconi.)

Marc Decoteau with the Education Funding Coalition Communities advocacy group applauded the decision, saying it keeps a fair system in place and allows people to decide how to operate their local schools and governments.

“This decision by the court says each community and each taxpayer is being taxed through the SWEPT in the same way. But there is a fairness component to this decision as well. Education expenses are decided by the voters who will pay the property taxes for use within their community, and this decision ensures that their hard-earned tax dollars will be spent in their community while providing for direct accountability,” Decoteau said.

At the opposite end of the debate, NH School Funding Fairness Project Executive Director Zack Sheehan said Tuesday’s decision leaves a fundamentally unfair system in place.

“Allowing some taxpayers in this state to continue to get special treatment and avoid paying their fair share of taxes to support the education of all students in the state is beyond disappointing. For far too long, the State has allowed this two-tiered system to operate, and this order will allow it to continue at the expense of funding for schools in the districts that need it the most,” Sheehan said.

Now, Gov. Kelly Ayotte and the legislature are waiting to see if the Supreme Court will uphold Ruoff’s ConVal decision. In that case, initiated by the Contoocook Valley School District, Ruoff found that the state’s per-pupil adequacy grant of around $4,000 is too low. As a result, he said, it violates the Supreme Court’s Claremont decision.

Ruoff ruled that the per-pupil grants need to be raised to about $7,200. If that’s upheld, taxpayers would need to find an extra $500 million each year to fund public schools.

The New Hampshire Supreme Court could soon decide whether judges, or elected officials, should determine how much the state kicks in for local schools. If it decides the power belongs with the courts, the result could be a more than $500 million increase in state taxpayers’ share of funding for education.

Justices heard oral arguments Tuesday in the ConVal education funding appeal as New Hampshire Solicitor General Anthony Galdieri argued Superior Court Judge David Ruoff’s decision is unconstitutional.

Ruoff ruled in 2021 the real cost of the constitutionally mandated adequate education is at least $7,300 per pupil, while Galdieri and the state say it’s $3,900. Galdieri said Tuesday that Ruoff erred by including line items like school buses, building maintenance, and facility costs into his calculation. The legislature only funds direct costs, such as teacher salaries and learning materials, through the education adequacy grant system.

“The (Supreme Court) already decided the legislature only has to pay for what’s been defined,” Galdieri said. 

But Michael Tierney, ConVal’s attorney, said the legislature’s funding definitions exclude costs like heating oil, cleaning supplies, and even positions like principals and superintendents from the formula. 

“The state’s funding is woefully inadequate and unconstitutional,” Tierney said.

Galdioeri also objects to Ruoff overstepping the legislature by setting a number at all, arguing that violates the separation of powers. Tierney counters judges set damage amounts in court cases all the time.

In addition, Ruoff’s number crunching didn’t come out of the blue. He was ordered to come up with a number by the Supreme Court.

The Peterborough-based Contoocook Valley Regional School District filed its lawsuit in 2018, and was soon joined by dozens of other school districts, saying the state’s then $3,600 per pupil was well below the real cost of an education. The districts wanted at least $10,000 per pupil.

The state has since increased the per pupil amount up to $4,100

The Supreme Court ruled in the 1990s Claremont decisions that all New Hampshire children have a right to an adequate education and that the state must fund it. Galdieri said the base adequacy grants system is not constitutionally mandated, but simply the way the legislature decided to meet the constitutional obligation to fund an adequate education.

But the legislature’s solution focused solely on funding basics like teachers and materials, leaving individual communities to pay for the buildings, school busses, maintenance, and other school costs on their own.

While the parties dispute where the funding should come from, there is no debate over the fact that New Hampshire taxpayers spend more for K-12 education than nearly every other state. Average per pupil spending in the Granite State has passed the $20,000 mark, and no district spends less than Ruoff’s $7,300 per pupil minimum.

Ruoff originally ruled in favor of the districts, but he did not set a number saying that is the job of the legislature. The state appealed that decision and the Supreme Court sent the case back to Ruoff, this time telling him to hold evidentiary hearings and come up with the real cost. 

Ruoff’s order has been stayed pending the outcome of the current appeal. If it were to go into effect it would suddenly require an additional $500 million in taxpayer money for education. Progressives have argued this spending would require that the state would have to give up its vaunted “New Hampshire Advantage” and embrace either a broad-based income or sales tax.

But Republican leaders like incoming Gov. Kelly Ayotte and new state Senate President Sharon Carson say tax hikes are not on the table. Carson was asked by WMUR if the courts should decide how much is “adequate,” she replied, “absolutely not.”

“That’s not their job. That’s our job. That’s the legislature’s job. The responsibility has been given to the legislature by the people of the state, not to the courts,” Carson said.

As the New Hampshire Supreme Court considers the $500 million ConVal education funding decision, GOP lawmakers have come up with a solution for the endless legal drama: Get rid of the Claremont decisions.

In an amicus brief filed with the court this week, a group of 31 House and Senate Republicans justify ending Claremont by linking it to the logic behind the Roe v. Wade decision that created a woman’s right to an abortion. 

The U.S. Supreme Court overturned Roe with the recent Dobbs decision, restoring the right of voters to set the abortion laws in their own states. Like Roe, they argue, Claremont was a bad decision that took authority away from local communities and created endless legal battles.

“In Dobbs, the U.S. Supreme Court acknowledged the morass into which it had ventured in 1973 and overruled Roe and Casey, returning the controversial policy issue of abortion to the policy-making branches of the 50 state  governments,” the brief states.

The landmark state Supreme Court Claremont decisions from the 80s and 90s found that all New Hampshire children have a right to an “adequate education” and that the state has a financial obligation to fund that education. 

State Sen. Tim Lang (R-Sanbornton) said the Claremont rulings have done more harm than good, taking away local control from communities and creating the legal environment for the costly ConVal decision.

“The decision has run its course and its not taking into account the entire state of New Hampshire,” Lang said.

But Noah Telerski, with the liberal NH School Funding Fairness Project, said the brief is an example of blame shifting by the GOP lawmakers.

“Instead of owning up to their failure to adequately fund education in compliance with the Claremont rulings, these legislators are instead arguing that Claremont should be thrown out,” Telerski said in a statement. “They are trying to blame the court for their own failure to comply with the court’s rulings over the past 30 years. And this begs the question, what do they think the state’s role in funding education should be?”

Lang, along with House Speaker Sherman Packard (R-Londonderry) and 29 other GOP lawmakers, signed on to the amicus brief, promoted partially by the fact the New Hampshire Department of Justice isn’t trying to overturn Claremont. The DOJ, in representing the state in the ConVal appeal, makes the error of not challenging Claremont, the brief states.

The DOJ is focusing on getting the ConVal decision overturned, but that leaves open the possibility for more lawsuits over school fusing down the line, the brief states.

“If this Court were to reverse the lower court order, it would soon  enough be called upon to pass on the constitutionality of another school funding law, and another, and another, until the Court would be forced to confront the decision the amici are urging it to confront now,” the brief states. 

In the ConVal ruling, Rockingham Superior Court Judge David Ruoff sided with the Contoocook Valley Regional School District which argued the state’s per pupil adequacy grant of $4,100 was too low to provide the constitutionally guaranteed adequate education. Ruoff determined the grants should be a minimum of $7,300 per pupil for every pupil, representing an immediate $530 million spending increase.

Some lawmakers were horrified by the notion of a single judge arbitrarily creating a taxpayer-funded mandate, entirely outside the legislative process.

The $4,100 adequacy grants are average for most districts, but the legislature increases those grants for the poorest communities under the current system, Lanf said. Ruoff’s solution takes away the legislature’s ability to target school aid to poor communities like Claremont, he said.

“Towns like Claremont, towns like Berlin, would be devastated,” Lang said.

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. 

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.

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. 

Senate Republicans stand between the New Hampshire Advantage and dangerous judicial overreach in the ConVal decision that could force an income tax on Granite Staters, said Senate President Jeb Bradley (R-Wolfeboro).

Speaking before the Senate’s first session of the year at a Wednesday press conference in the Legislative Office Building, Bardley said the ConVal education funding decision essentially forces $536 million in new spending.

“There is no way, in my opinion, to do that without an income tax, or a sales tax or, possibly, both,” Bradley said. “That totally undermines the New Hampshire Advantage, and we just can’t go that route.”

Rockingham Superior Court Judge David Ruoff sided with the Contoocook Valley School District in its lawsuit against the state, ruling New Hampshire’s education funding system does not pay enough in adequacy grants and is, therefore, in violation of the state constitution. The Claremont state Supreme Court decisions from the 1990s found students have a right to an adequate education. That put the onus on lawmakers to define how much an adequate education costs and to come up with a fair way to fund it.

Ruoff’s decision, released in November, found the current adequacy grant of about $4,100 per pupil is too low and ought to be at least $7,300 per pupil. Ruoff left the final amount and funding mechanism up to the legislature. But Bradley said Ruoff’s decision puts New Hampshire on the road to an income tax. 

Worse, according to Bradley, it would force New Hampshire to revert to a donor town-type funding system where property taxes paid by homeowners in wealthier communities would be transferred to school systems in less-affluent cities or towns. That won’t happen while the GOP maintains control of the Senate, Bradley pledged.

“Between the 14 of us, an income tax, a sales tax, and donor towns are off the table,” Bradley said.

Some Democrats have already floated the idea of blocking the phase-out of the state’s tax on interest and dividends tax. Republicans say it’s just one step toward the longstanding goal of Granite State progressives to impose an income tax in the name of equity and social justice.

Gov. Chris Sununu is appealing Ruoff’s order to the New Hampshire Supreme Court. Bradley said it remains to be seen if the ConVal decision survives the appeal. 

Protecting New Hampshire’s strong economy and free way of life from a tax regime is one of the Senate GOP’s top priorities for the coming session, Bradley said.

“It’s vitally important that we protect hardworking men and women from higher taxes, allow small businesses to thrive, and maintain our economic status,” Bradley said.

Public safety is the second pillar of the Senate GOP’s agenda, he said, and that starts with bail reform. The House and Senate have competing proposals to fix the 2018 bail reform law. While it was supposed to end cash bail for non-violent offenders, it’s now blamed for returning violent criminals to the streets.

“Our bail system, with the best intentions several years ago, was reformed, and those reforms did not protect the public,” Bradley said.

Despite differences in the proposals, Bradley said he is optimistic a deal can be struck between the two chambers to fix the bail system one way or another. 

“I think the House has made a good faith effort,” Bradley said. “Nobody gets everything they want around here.”

The Senate is also looking to block sanctuary cities in New Hampshire, strengthen protections at the Northern Border, and pass mandatory minimum sentences for fentanyl traffickers, said Sen. Sharon Carson (R-Londonderry). 

The GOP agenda includes a parental transparency proposal that guarantees guardians access to school information about their children, a hotly-contested issue as some school districts insist teachers and administrators have the right to keep secrets – or even lie to – parents about their children’s behavior.

The senators will also push for local property tax relief, improvements to health care and mental health care, clean drinking water, investments in affordable housing, and a constitutional amendment to enshrine New Hampshire’s First in the Nation presidential primary into law. 

While the senators presented a united front for their agenda, there is a major fault line when it comes to marijuana legalization. Sununu reversed course last year by calling for the legislature to legalize recreational marijuana. Bradley admits the issue divides his caucus, but there will be a legalization effort this year he hopes everyone can agree to.

“There is the opportunity to get that done, but we’ll see what happens,” Bradley said.

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.

Could the next 60 days see an end to New Hampshire’s school funding system as we know it?

Rockingham Superior Court Judge David Ruoff told lawyers Wednesday he is set to rule sometime in the next 60 days on either the final decision in the Contoocook Valley Regional School District adequacy grant lawsuit or the summary judgment for the Grafton County lawsuit seeking to cancel the Statewide Education Property Tax or SWEPT.

“Time is of the essence here for everyone involved,” Ruoff said.

New Hampshire lawmakers, education leaders, and local school boards have been tussling for decades over how to fund a constitutionally-mandated adequate education. Despite hundreds of millions in new funds going to education this year alone, there is still no agreement on how to pay for public schools.

Ruoff is now the one man in the state who could change everything thanks to the lawsuits which landed before him in court. 

The original judge on the Grafton County case, Grafton Superior Court Judge Lawrence MacLeod, recused himself last year, citing a potential conflict of interest. MacLeod is a property owner in one of the property-rich towns pushing to keep the current SWEPT system in place.

MacLeod’s recusal sent the case to Ruoff. Ruoff is also under orders from the New Hampshire Supreme Court to decide in the ConVal case exactly how much the state should pay per pupil.

In both cases, the school districts claim the way the state is currently funding education, using an unevenly enforced SWEPT to pay for adequacy grants that do not cover all necessary expenses, is unconstitutional.

Ruoff initially ruled in ConVal’s favor, agreeing the state is not paying enough per pupil, but he left setting a particular amount to legislators. On appeal, the Supreme Court ruled Ruoff needed to hold a trial and set a specific dollar amount.

New Hampshire upped its per pupil adequacy grant this year to $4,100. But the plaintiffs in the ConVal case are looking for just short of $10,000 per pupil. Ruoff listened to weeks of testimony this year; his highly anticipated ruling is pending.

With approximately 160,000 students in the state’s K-12 public schools, a $10,000 adequacy payment would cost state taxpayers $1.6 billion yearly.

Meanwhile, lawyers representing the state and the Grafton County plaintiffs argued in court Wednesday over an injunction to set the SWEPT rate at 0, as the plaintiff wants. Ruoff indicated he would issue a judgment in the case without need for a trial since neither side disputes the facts about how schools are funded.

SWEPT accounts for 30 percent of education funding in New Hampshire. Under a law change in 2011, a loophole was created. Now as many as 30 wealthier communities in New Hampshire are keeping a portion of the money raised through SWEPT, essentially getting to set a negative property tax rate, while poorer communities end up with higher SWEPT rates to make up for their low property values.

Michael Jaoude, an attorney for the plaintiffs, said the uneven SWEPT burden violates the Claremont decision from the 1990s, which ruled there is a constitutional right to adequate education and that the cost needs to be shared equally.

“No resident should have a greater burden of funding that constitutional right than another,” Jaoude said.

SWEPT started in 1999 as a response to the Claremont decision, which found the state has a constitutional obligation to fund adequate education. The money raised, more than $360 million estimated in the coming year, is used to fund state adequacy grants. 

Senior Assistant Attorney General Sam Garland said ruling for the Grafton County plaintiffs would have disastrous impacts on local town and school budgets. Garland said the plaintiffs have not shown that the SWEPT system is unconstitutional, and their arguments don’t hold up.

“We don’t think they’ve made that showing, and we don’t think they can make that showing as a matter of law,” Garland said.

Garland said even if the 2011 law creating the SWEPT exemptions might be unconstitutional, the tax itself is not, and Ruoff should allow the rate to be set.

Ruoff indicated the whole SWEPT issue might be moot depending on his eventual ruling in the ConVal case.

As the legal battle over school funding plays out in the ConVal lawsuit trial in the Rockingham Superior Court this week, new data show the massive increase in school spending is tied to the nearly 60 percent increase in the number of district administrators.

School superintendents are among the highest-paid public employees in the state, with salaries more than double that of the average teacher. That is certainly the case in the Contoocook Valley Regional School District, which is currently in court demanding more state funding.

According to data compiled by the New Hampshire Department of Education, Superintendent Kimberly Rizzo Saunders’s salary is more than $171,000 a year. That makes her one of the highest-paid superintendents in the state.

A study released this week by the Josiah Bartlett Center for Public Policy showed taxpayer spending on New Hampshire school districts rose by $1.5 billion over the last 30 years even as the number of students fell by 14 percent. Even adjusting for inflation, taxpayers poured in an additional $937 million to educate fewer kids.

“This massive spending increase–40 percent when adjusted for inflation–occurred as public school enrollment was cratering. From 2001-2019, New Hampshire district public school enrollments fell by more than 29,946 students or 14 percent,” the report stated.

It was particularly true for administrative costs. According to the report, that 14 percent drop in enrollment was accompanied by a 15 percent increase in district administrative staffing.

“Adjusted for inflation, per-pupil spending increased 83 percent for support services, 82 percent for general administration, [and] 74 percent for school administration.”

The trend appears to be at work in ConVal schools. For example, in 2001, the Contoocook Valley Regional School District had 3,227 enrolled students. By 2019, it had fallen to 2,176, or 32.5 percent.

At the same time, school spending — mostly paid for by property taxpayers — rose from $37.3 million a year to more than $47 million, an increase of 26 percent.

The numbers don’t lie, said Ben Scafidi, the author of the report and a professor of Economics at Kennesaw State University and director of the school’s Education Economics Center. “Taxpayers are spending more money on fewer students,” he said.

The problem isn’t teacher pay, which has risen modestly. Instead, one of the biggest cost drivers in public schools has been the number of district-level administrators and staff, up 57 percent, Scafidi said. They are employees who do not teach and who generally do not interact with students.

“Most of the spending increase went outside the classroom,” Scafidi told WFEA radio’s Drew Cline Wednesday. Cline is also the president of the Josiah Bartlett Center.

While the number of students dropped 14 percent, the number of school principals overseeing their education dropped by just two percent.

“It’s very out of whack with the decrease in students,” Scafidi said.

In the same period, schools were beefing up spending and losing students, and the rest of New Hampshire’s government was growing at a much smaller pace, Scafidi said. He said that public colleges and universities saw an 8 percent increase in the number of students and responded with a more than 7 percent increase in staff. All other state agencies grew by about 1.2 percent, with more than 300 employees, even though the state population went up 8 percent.

New Hampshire is now spending thousands more per pupil than other states; he said, around $3,900 more. The average state spending per pupil is close to $19,000. This hasn’t stopped districts like ConVal from fighting the state for more per-pupil spending.

The state sends nearly $4,000 per pupil to each school district as part of the adequate education grants. ConVal’s lawsuit claims the real cost of the constitutionally mandated adequate education is much higher, and it wants the state to send $10,000 per pupil.

In addition to Rizzo Sanders’ $171,000 a year — which puts her in the top bracket of school superintendents — the assistant ConVal superintendent earns more than $141,000. That’s more than many superintendents in nearby districts, where the pay ranges from about $100,000 to $150,000.

Not that ConVal is at the top of the heap for administrative salaries.

Hanover’s superintendent brings in $178,000, and Nashu pays its superintendent $172,500. Oyster River’s superintendent is the top earner, taking home more than $192,000.

Part of the blame for the increase in the number of outside-the-classroom administrators falls on state and federal governments issuing rules and mandates for local schools.

“Public schools get funding from the federal government, the state government, and local property taxes,” Sacfidi said. “You have many layers of government telling schools what to do, and each layer of government has its preferences, and they impose them on public schools.”

According to Sacfidi, the result is more taxpayer money going to schools that teach fewer students, and more of that money goes to employees who do not step inside the classrooms as part of their jobs.