School Funding

New Hampshire has been here before.

Last week, a superior court judge ruled that the state is not meeting its constitutional obligation to fund an “adequate education” — one in a long line of decisions on school funding stretching back to at least the 1990s, when the N.H. Supreme Court issued its landmark Claremont I and II opinions.

The latest suit, brought by the ConVal Regional School District and joined by the Winchester, Monadnock and Mascenic districts, alleged the state is short-changing the districts and leaving overburdened local taxpayers to make up the difference.

Most observers expect the state to appeal to the N.H. Supreme Court. A spokeswoman for the N.H. Attorney General’s Office said Wednesday the state had yet to determine its next steps.

In the interim, educators and lawmakers are working to determine theirs.

A flawed formula

In Claremont I and II, the Supreme Court held that the N.H. Constitution requires the state to provide and fund an “adequate education.” And because it’s a state responsibility, the state government cannot rely on taxes that vary wildly from town to town.

After several subsequent rulings, lawmakers eventually formed the committee that came up with New Hampshire’s current education-funding formula in 2008.

The committee arrived at a baseline amount for annual state “adequacy” funding — $3,636 per student in the most recent school year. (School districts receive additional state funding based on factors such as how many students qualify for free and reduced lunch.)

It was that baseline adequacy number that ConVal and the other districts challenged in their 2019 lawsuit.

They argued that the committee’s numbers vastly underestimated costs like teachers, facilities and transportation. The formula also neglected some items required by state regulations, such as nurses and superintendents, according to the lawsuit.

As a result, the plaintiffs argued, state education aid does not even come close to what school districts in New Hampshire actually spend — more than $17,500 per pupil on average in 2017-18, not including capital expenses and debt payments, according to state Department of Education numbers.

Cheshire County Superior Court Judge David W. Ruoff largely agreed, finding the formula flawed in key ways. It understates the number of teachers districts must hire, he wrote in his June 5 decision, and lowballs transportation and facilities costs for no clear reason.

“The court said basically, ‘No, the formula’s not OK, it’s really badly flawed,’ ” said John Tobin, one of the lawyers on the original Claremont lawsuit. “And so the court declared the number, the bottom line of the formula, unconstitutional.”

Ruoff’s order essentially kicks the issue back to the Legislature to come up with a new formula.

“Which is what courts traditionally do in these sorts of circumstance,” Tobin said. “They declare the broad constitutional principles, but then they say it’s up to the Legislature to fill in the blanks.”

Ball’s in the General Court

But while Ruoff didn’t prescribe a specific fix, legal experts pointed to parts of his ruling that could guide the next legislative effort.

Supreme Court precedents lay out several tasks for the legislative and executive branches, said William L. Chapman, a partner with Orr & Reno in Concord who represented a group of plaintiffs in a school-funding challenge in the mid-2000s. That includes defining an adequate education, figuring out what it costs and then actually funding it.

“I think he’s saying, start with [the definition] and ask yourself whether, in its current form, it’s specific enough to lay out the elements of an adequate education,” Chapman said. “If it’s not, then fill in the gaps, and then once you’ve done that … go figure out what it’s gonna cost to fund each of those elements, whether it’s teacher salaries, whether it’s educational aids and software.”

John M. Lewis, a former superior court judge who has followed the state’s education-funding lawsuits, said Ruoff indicates lawmakers could start by looking at what school districts actually spend.

In the ConVal suit, lawyers for the state resisted that approach, saying actual school-district spending includes local choices that may go above and beyond the constitutional minimum. Ruoff, in his order, acknowledged that the Legislature is not required to fully fund school districts’ actual costs and declined to say whether “actual costs” would be the proper way to cost out a new adequacy formula. But, he noted, the state cannot cite local choice as a way to squirm out of its funding obligations.

“The principle of local control is not fulfilled when the State’s funding results in local school districts being coerced into using their locally raised funds to fulfill obligations of the State” to pay for an adequate education, he wrote.

Courts have consistently said it’s not their role to make policy. But they have also warned that the judiciary could take a more active role if the Legislature does not step up. Some observers said Ruoff’s order contains a similar warning.

“[T]he Court stops short of picking its own number as the appropriate cost for an adequate education — at this point,” Ruoff wrote. “… However, as the Supreme Court has repeatedly warned in school funding cases: constitutional rights must be enforced or they cease to exist.”

In theory, according to legal experts, a court could appoint a “special master” to hear evidence and figure out a formula. The Supreme Court raised that possibility in a 2006 opinion.

But that’s no one’s first choice. Lawyers interviewed for this story said they would much rather see politicians and other stakeholders work out a durable solution.

“I was pleased to see that the judge had given the Legislature a bit of an ultimatum,” said N.H. Sen. Jeanne Dietsch, a Peterborough Democrat and vice chairwoman of the Senate’s education committee.

Some short-term solutions?

As Ruoff’s decision came down last week, lawmakers were in the midst of the state budgeting process, with the current legislative session nearing its end on June 30.

Proposals in both chambers include significant changes to education funding, such as increases in adequacy aid and the addition of “fiscal capacity disparity aid” to target funds to poorer communities. The Senate bill would also restore stabilization grants — which the Legislature instituted in 2011 to ease the burden of a decrease in aid after extra funding for property-poor communities was eliminated — to their 2016 levels.

But at least among Democrats, many legislators seem to agree that there’s more work to be done. And as reactions to Ruoff’s order have unfolded, some have highlighted that the proposals include dollars for a new, dedicated commission to more closely examine the issue of funding an adequate education.

In response to a question at a news conference in Keene Tuesday, Sen. Jay Kahn, chairman of the Senate education committee, acknowledged that the proposed funding increases still probably fall short of the constitutional mandate. But they offer some relief to local school districts as legislators work toward more comprehensive changes, he said.

“So over the next two years, that commission will do its work, and be able to present recommendations to the next Legislature on how to advance school funding over a long-term basis,” Kahn, a Keene Democrat, said. “... One thing that’s clear is that this decision by the superior court says that is the responsibility of the Legislature to develop that budget solution.”

It’s not a responsibility the Legislature takes lightly, said House Majority Leader Douglas Ley of Jaffrey, who noted lawmakers have heard constituents’ concerns. Ley is also president of the New Hampshire chapter of the American Federation of Teachers, a union.

“We’ve been aware of it, and that’s why the House has attempted to — even before the decision — begin to try to find ways to address these problems,” he said.

One of those measures was sponsored by Hillsboro Democrat Rep. Marjorie Porter, whose district includes Antrim. House Bill 678 would have raised the base adequacy amount funded by the state to $9,929 per pupil excluding transportation. That figure came directly from ConVal’s research, she said.

But the proposal never made it out of the House education committee.

Looking ahead, Porter said that, though she doesn’t feel the proposed budgets meet the requirements of the court, she hopes the commission built into the House and Senate proposals is approved and moves forward quickly.

Should the base adequacy amount ConVal argued for be enacted, it would result in a $1.6 billion budget increase, according to the order — a hefty sum, Porter noted.

“But how we’re going to get that figure and if that’s the figure that we need to use moving forward, I just don’t know,” Porter said. “And I think that’s what we need the experts to help us with.”

Rep. Steven Smith, R-Charlestown, said he supported a proposal that would have replaced stabilization grants with other targeted aid to the communities most in need. He said the bill, which died in the House finance committee this year, would have especially helped communities like his, which had the highest education tax rate in the state last year.

“The essence of the court ruling was not a number, but that the formula’s flawed and the state needs to fix that,” Smith said.

But he warned against thinking the state should pay all education costs, arguing that would crush local control.

A spokesman for the governor’s office did not respond to a question this week about how Chris Sununu, a Republican, would address Ruoff’s concerns about the funding formula. In a statement after the ruling last week, Sununu’s office said the governor has supported targeted aid to property-poor towns and believes “critical funding decisions are best left to local elected leaders,” not judges.

The Republican minority leaders of the House and Senate did not respond to emailed requests for comment this week.

To comply with Ruoff’s ruling, legal observers said, legislators will likely have to overhaul the basic adequacy formula. Simply layering other forms of funding on top of the existing formula will probably fall short, they said.

“The Supreme Court has said that adequacy is what the state’s responsibility is, and so adequacy has to be sufficiently funded,” said Andru Volinsky, one of the lawyers on the Claremont lawsuit and now a Democratic executive councilor whose district includes much of the Monadnock Region.

While the long-term implications of Ruoff’s decision remain unclear, districts and educators are tracking the process, said Barrett Christina, executive director of the N.H. School Boards Association. Since the ruling, school boards have been inquiring about possible next steps.

It’s too soon to provide a concrete answer to that question, Christina said, but the association plans to be involved in the proposed commission and any other legislative measures it may spur.

“If anything else, the recent opinion from superior court raises the issue that we really need to look at the 2008 funding formula a little bit more closely and ascertain, what are the requirements that the Legislature is placing on the school districts? What are the costs of those?” Christina said. “And then what would corresponding state funding be?”

For Wayne Woolridge, superintendent of the Hinsdale School District, the conversations sparked by this latest lawsuit are all too familiar.

At the time of the first Claremont decision in 1997, he was working at Keene High School, where he served as assistant principal and principal before going on to become superintendent of N.H. School Administrative Unit 29.

“A lot of it comes back to the original opinion in 1997,” he said. “Things haven’t really changed.”

Still, Woolridge said the Legislature’s proposed budgets — and the included commission — are a sign of progress toward addressing the underlying issue of unequal funding from district to district.

“I think when the committee of conference finalizes a budget, it certainly will be much better for public education in New Hampshire than what we had. So I’m happy that we’re making some progress; we’re moving in the right direction,” he said. “But underpinning all of this is a ‘reasonable amount’ … and the ability to raise that money shouldn’t be dependent on where you live in New Hampshire.”