Court finds school funding formula unconstitutional, orders at least $500 million more for public schools

In a historic ruling, Rockingham County Superior Court Judge David Ruoff ruled in favor of school districts on Monday when he ruled that the school funding formula is inequitable and inadequate and ordered the legislature to revise it. He also ruled the statewide education property tax unconstitutional, stating that by allowing communities to retain more state tax than they are allocated, it violates the state Constitution.

In his ruling in the ConVal vs. New Hampshire case, Judge Ruoff wrote:

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. Thus, the current allocation of $4100 per pupil is unconstitutional.

Using the stated figure, combined with the most current enrollment data from the NH Department of Education, Reaching Higher NH estimates that the ruling could increase school funding to public schools by about $1.25 billion over the next two years. This includes funding to district public schools only and does not include state funding to public charter schools. 

Reaching Higher NH issued an analysis of the ruling for the 2023-2024 school year and the 2024-2025 school year:

Judge Ruoff stated that it is the legislature’s responsibility to determine the final, per-student dollar amount that the state must pay, but that it should be no less than $7,356.01. The legislature is set to reconvene for the 2024 session on January 3, 2024. 

Reaching Higher NH will be releasing more analysis on this ruling in the coming weeks. Sign up for our NH Education Network newsletter and follow us on Facebook and Twitter to stay up to date with the latest information. 

Larger districts would receive a historic funding increase

Public schools in New Hampshire have been persistently underfunded and have had to rely on local property taxes to operate their schools. The ruling would be a watershed moment for the state’s largest — and often most underfunded — school districts. 

If the legislature adopted Judge Ruoff’s ruling, Manchester would receive an additional $38 million in state funding for the 2023-2024 school year. Other districts that would receive a substantial increase include Nashua ($31.5 million), Bedford ($13 million), and Rochester and Concord ($12 million each). 

The final state grants for property-wealthy school districts like Waterville Valley, Tuftonboro, and Rye would not change because their excess state property tax (SWEPT) is more than the funding increase. 

Judge also rules in favor of taxpayers

Judge Ruoff also issued a ruling in the Rand v. New Hampshire lawsuit, stating that the statewide education property tax (SWEPT) is unconstitutional. Under current law, the state applies a uniform rate to every town in the state, and if towns generate more in tax revenue than their state allocation, they are permitted to keep the excess to offset their local property tax rate. 

Ruoff ordered that the state can no longer allow towns to “keep” the excess and instead must send it to the state. 

In 2023, there are 44 towns in New Hampshire that collect excess SWEPT. 

Next steps: Additional time for reconsideration

Judge Ruoff is giving the state an additional 30 days to file a motion to reconsider the rulings. That means that the state has more time to appeal the finding. 

Read the full rulings here:

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