How the courts have shaped education funding, and what comes next

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In the 1990’s, the Claremont School District challenged the way the state of New Hampshire pays for public school in what are known as the Claremont lawsuits.These lawsuits have played a major role in guiding school funding policy in New Hampshire for more than twenty years.  

Through the lawsuits, the New Hampshire Supreme Court ruled that the state is responsible for providing equal access to an adequate education regardless of where the student lives, and is responsible for paying for it. Later, the Court ruled that the legislature must explicitly define a “constitutionally adequate education” in its opinion on the Londonderry lawsuit.

Now, the school funding formula is back in Court: ConVal, Winchester, and Monadnock School Districts have come together and sued the State, claiming that the amount that the state pays for an adequate education doesn’t actually cover the cost of it. They cite the Claremont lawsuits, but how do those twenty-year old Supreme Court opinions shape the policies around school funding?

Timeline of landmark court rulings regarding education funding, and the 2019 suit currently in Superior Court. Click to expand.

Claremont I: The State’s Duty to Provide an “Adequate Education”

In 1992, five towns sued the state. In their original petition, they claimed that the state failed to spread educational opportunities equitably among its students and adequately fund education, which violated the New Hampshire Constitution. They also argued that the funding system, which at the time had the state paying 8% of funding costs, was too reliant on property taxes and resulted in “unreasonable, disproportionate, and burdensome” property tax rates in the state’s property-poor communities.

Justices on the Supreme Court only considered one of the arguments: whether the state had an obligation to provide and pay for public education. They ruled that the state is, in fact, required to do both per Part II, Article 83 of the State Constitution:

Knowledge and learning, generally diffused through a community, being essential to the preservation of a free government; and spreading the opportunities and advantages of education through the various parts of the country, being highly conducive to promote this end; it shall be the duty of the legislators and magistrates, in all future periods of this government, to cherish the interest of literature and the sciences, and all seminaries and public schools, to encourage private and public institutions, rewards, and immunities for the promotion of agriculture, arts, sciences, commerce, trades, manufactures, and natural history of the country;

The Court wrote:

“We hold that part II, article 83 [of the New Hampshire Constitution] imposes a duty on the State to provide a constitutionally adequate education to every educable child in the public schools in New Hampshire and to guarantee adequate funding. Accordingly, we reverse and remand for further proceedings consistent with this opinion…

We do not construe the terms “shall be the duty … to cherish” in our constitution as merely a Statement of aspiration. The language commands, in no uncertain terms, that the State provide an education to all its citizens and that it support all public schools.”

There was no direct legislative action in response to the Claremont I decision. The Court only looked at one question: whether the state has an obligation to pay for public education. The Supreme Court later addressed the funding inequities of the way New Hampshire pays for its public schools, ruling that all children in the state must have equal opportunities to an adequate education regardless of where they live in an opinion known as Claremont II.

Claremont II: Equal Access to an Adequate Education

In 1997, the towns in the original lawsuit appealed a second time and challenged the constitutionality of the funding system, arguing that it was too reliant on property taxes.

In the early 1990’s and until the formula was changed in 1999 as a result of the Claremont decisions, New Hampshire funded a specific percentage (an average of 8% at the time of the ruling) of a district’s costs for education. This resulted in a wide variation of property tax rates among the state’s property-rich and property-poor towns.

In 1995, Pittsfield’s total property tax rate was $25.26 per thousand, almost 400 percent higher than property-rich Moultonborough’s rate of $5.56. “We need to look no further to hold that the school tax is disproportionate in violation of our State Constitution,” the Court ruled:

There is nothing fair or just about taxing a home or other real estate in one town at four times the rate that similar property is taxed in another town to fulfill the same purpose of meeting the State’s educational duty. Compelling taxpayers from property-poor districts to pay higher tax rates and thereby contribute disproportionate sums to fund education is unreasonable.

Children who live in poor and rich districts have the same right to a constitutionally adequate public education. Regardless of whether existing State educational standards meet the test for constitutional adequacy, the record demonstrates that a number of plaintiff communities are unable to meet existing standards despite assessing disproportionate and unreasonable taxes.

The Court relied on per-student spending as a measure of the quality of education. Because property-poor districts like Pittsfield had to have higher tax rates to raise the same amount of money as a property-rich town like Moultonborough, there were substantial differences in how much a town could spend per student. The Court ruled that these differences in per-student spending resulted in differences in educational opportunities, and that the state has an obligation to fund all public schools. It also ruled that the state must fund public education with taxes that are equal in rate, leading to the statewide education property tax.  

Following the Supreme Court decision, the legislature replaced the existing method for funding public schools with a formula that provided a district with a grant based on the number of students it served (which has been changed several times in the last 20 years). It also established the statewide education property tax that we have today.

Londonderry: Defining “Adequate”

In 2005, Londonderry joined Merrimack and nineteen other towns to challenge the constitutionality of a proposed bill that would have established targeted school funding and would have eliminated “donor towns.” Londonderry argued that the proposed bill failed to define and determine the cost of an adequate education and that eliminating donor towns resulted in an “unreasonable and disproportionate” tax burden on property-poor communities.

The New Hampshire Supreme Court focused on one aspect of the claim: whether or not lawmakers had adequately defined what an “adequate education” means. At the time, New Hampshire had general Statements for what an adequate education includes, including: “skill in reading, writing, and speaking English,” “skill in mathematics with familiarity of methods of science to enable them to analyze information,” and “sound wellness and environmental practices to enable them to enhance their own well-being.”

The Court found that the definition allowed too much interpretation. If a case came before a judge over inadequate education, would a judge have to determine if the level of “knowledge” a district provides is enough? Without a clear definition of adequacy, how would a district or parent know when the state’s obligation for education ends, and local decisions begin?

They tasked the legislature and Governor with explicitly defining an adequate education:

The right to a constitutionally adequate education is meaningless without standards that are enforceable and reviewable… Furthermore, without a substantive definition of constitutional adequacy, it will remain impossible for school districts, parents, and courts, not to mention the legislative and executive branches themselves, to know where the State’s obligations to fund the cost of a constitutionally adequate education begin and end…

Any definition of constitutional adequacy crafted by the political branches must be sufficiently clear to permit common understanding and allow for an objective determination of costs. Whatever the State identifies as comprising constitutional adequacy it must pay for. None of that financial obligation can be shifted to local school districts, regardless of their relative wealth or need.

Following the lawsuit, lawmakers defined an adequate education in RSA 193-E:2-a. They set out content areas and tasked the State Board of Education and Department of Education with determining and updating the minimum academic standards and tasked districts with determining the curriculum to meet those standards. Currently, the state uses the Common Core State Standards, Next Generation Science Standards, and other locally-developed standards.

Lawmakers Respond: The Current Adequacy Formula

In both Claremont cases, the Court tasked the Legislature and Governor with figuring out how to equitably fund education. Following the two rulings, lawmakers created a statewide education property tax as an equitable way to fund education through property taxes. Every year, the tax must generate $363 million, which is applied as a uniform tax rate across every town in New Hampshire (in 2019, it was $2.06 per thousand).

That money is then used to pay for adequate education grants, which is the way that the state pays for its public schools. Currently, each district receives a set amount per student (in 2019/2020, it will be $3,708 per student), which a bipartisan committee of lawmakers determined to be the cost of an opportunity for an adequate education in 2008. Learn more about how our state funds education with our education funding series.

Since the ruling, the state has also used different funding streams to target aid to vulnerable communities. Equalization aid, fiscal capacity disparity aid, and other programs have provided the state’s property-poor communities with additional funding. Differentiated aid, which provides additional money for students who qualify for Free or Reduced Lunch, special education services, and English Language Learning programs, gives more money for targeted instruction and interventions.

A 2017 study by the New Hampshire Center for Public Policy Studies (written by Executive Director Steve Norton and Economist Greg Bird, who now serves as Reaching Higher’s Senior Data Analyst) found that despite the Supreme Court rulings, there is still a wide gap in how much districts spend per student and in property tax rates in the state.

“There is still more than a two-fold variation between those communities that spend the most on educating students and those that spend the least. Variation in rates for local property taxes is even greater,” according to the report.

ConVal: Is Adequate Funding Adequate?

On March 13, 2019, the Contoocook Valley School District (known as ConVal, composed of Antrim, Bennington, Dublin, Francestown, Greenfield, Hancock, Peterborough, Sharon, and Temple) filed a lawsuit in Cheshire County Superior Court, arguing that the state does not provide sufficient funds to every New Hampshire community to meet minimum state requirements. They cite the New Hampshire Supreme Court opinion in Claremont II:

“The New Hampshire Constitution imposes solely upon the State the obligation to provide sufficient funds for each school district”

In the petition, ConVal argues that the state does not provide any funding for school nurses, superintendent services, and food services, which the state mandates school districts to have. ConVal also argues that the formula does not provide sufficient funding for transportation, facilities operation/maintenance, and teacher benefits, which the state also mandates school districts. And, the state’s teacher to student ratio assumptions of 1:25 in grades K-2 and 1:30 in grades 3-12 vary considerably from actual classroom experiences, according to the petition. Data from the New Hampshire Department of Education reveals that the average teacher to student ratio is between 1:10 to 1:13.

ConVal contends that the state, in order to meet its constitutional obligations, should be providing their district with $10,843 per student, or $22.1 million per year in state funding. The state currently pays the district $7.4 million.

The chart below depicts the number of public school students and state education funding dollars for each town in the ConVal School District. Because of differences in property tax wealth in the districts, Antrim is able to raise substantially more per student than Temple. Antrim and Bennington receive over 50% more per student from the state than Dublin, despite being in the same school district and close in proximity.   

Student enrollment and state aid by town. Click to expand.

In chart 2, property wealth in the town is compared to its economic well-being. The chart highlights the differences in property wealth, poverty, and property tax rates among the towns in the same district. Although only about 5 miles in distance away from Bennington and in the same school district, Hancock has almost three times the property wealth per student and half the proportion of students living in poverty.

Property wealth and economic well-being by town. Click to expand.

Since announcing the lawsuit in late March, Winchester and Monadnock (Fitzwilliam, Gilsum, Richmond, Roxbury, Swanzey and Troy) School Districts have joined ConVal. The Cheshire County Superior Court has scheduled a hearing date for Friday, March 29 at 9 AM. If the lower court does not rule in the districts’ favor, they can appeal to the New Hampshire Supreme Court.

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