Motion Made in SWEPT Suit

By Dylan Marsh
EAGLE TIMES STAFF
NEWPORT — Plaintiffs in a lawsuit against the state of New Hampshire in regard to equitable school funding have made a motion for a preliminary injunction to stop the state from implementing the StateWide Education Property Tax next year.

The injunction comes amidst two separate legal cases against the state of New Hampshire in an effort to have the state legally acknowledge the unconstitutionally inequitable funding of schools across the state. According to a representative with NHSFFP, the plaintiffs believe that this will succeed on merit due to the state not disputing that some towns do have a negative local education tax rate to offset SWEPT, or that towns are allowed to keep the excess revenues received from SWEPT. Two practices that the New Hampshire Supreme Court has ruled against in the past.

New Hampshire began implementing SWEPT in 1999 as one of a number of ways to attempt to help fund schools across the state. This comes after the landmark 1997 case Claremont School District V Governor of New Hampshire, in which the New Hampshire Supreme Court found that the school funding model was unconstitutional, and called upon state legislature to define a constitutionally adequate education, determine the cost of that education, and then pay for it using equal an amount of taxes for each public school across the state.

When SWEPT began in the state it called on property owning taxpayers to pay into the fund based on their property value. That money would be collected to bolster the Education Trust Fund, and then disbursed to communities to fund their schools equally. In 2005, a determination was made that set the total amount of money that SWEPT would collect to $363 million annually.

According to the New Hampshire School Fairness Funding Project, as well as lawyers associated with the case, the state no longer receives that funding. After some of the state’s property-wealthy towns demanded they no longer be “donor towns”, it was decided that the money be collected and distributed within the individual municipalities. Instead, the money is collected locally and then used to offset property tax in property wealthy communities. However, in towns such as Newport and Claremont, it only serves to add to the total property tax collected to fund schools.

“It doesn’t make sense to go forward and use an unfair system. So we are hoping to knock out the SWEPT piece and negative tax rates with the injunction,” said John Tobin, one of the attorneys representing the plaintiffs in the case.

After the Claremont lawsuit received their favorable ruling, it fell on legislators to determine these costs and how to pay for it. One of many issues with the current funding structure is that legislators haven’t been proactive in determining the costs of education and how to pay for it equally. “The legislature controls the state budget coffers and the courts, historically, are hesitant to tell the legislature exactly how to fix it,” said NHSFFP Project Manager, Zack Sheehan. Tobin also spoke to the ineffectiveness of legislators to enact change that will benefit every community across the state saying, “The state has never put a cost to education in any meaningful way.”

John Lunn, Executive Director with NCTV and one of the plaintiffs in the case, spoke of how the tax impact inequitable school funding is detrimental to the less wealthy towns, while also acknowledging the eventual impact it will have state wide. “We can’t afford to employ people at the schools at the same rate. So we can’t give them a good standard of living and that leaks over into the town and how much we are able to pay our municipal employees. It’s because of this a business is going to think twice about opening in towns like Newport, where their property taxes are high and the schools aren’t being fairly funded. Our recent reevaluation dropped the business tax rate and raised the residential tax rate because businesses don’t want to come here,” said Lunn. He would go on to later say, “What the leaders in wealthy towns don’t realize is that while we get strangled we are going to take them down with us because the wealthy towns can’t exist in a bubble.”

While this motion runs concurrently with the other two lawsuits against the state it is separate. Attorneys from Concord, including Tobin, are representing plaintiffs in what has been deemed the “Rand” case, while another similar lawsuit coined “ConVal” are working toward the same ends. According to Tobin, the ConVal suit focuses on low state aid and the consequences of an unfair system, while Rand has those same interests with a specific emphasis on unfair property tax rates as a result of the current structure.

The Department of Revenue has announced the upcoming SWEPT rate at $1.44 per $1,000 of assessed property value. Meanwhile, as recently as 2019-2020, the School Funding Commission brought in school experts and they said the current system hurts taxpayers and students, according to Tobin.

Lunn, Tobin, and others associated with the lawsuit all agree that, while the lawsuit pushes the issue to the forefront of the legal conversation, the only way to make meaningful change is with your vote. “The court will have a weak ability to enforce the ruling, they may not make a strong demand, so much of it comes down to the legislature. The voter really has to pay attention, some don’t realize the way local government affects them,” Lunn said.

“We have an election in four weeks, people should be asking their candidates, how are you going to address this? Do you think the current system is fair? We have an opportunity to get this into the public discussion,” Tobin followed. Tobin also pointed out that with this lawsuit or the restructuring of school funding in New Hampshire, they are not asking anyone to pay more for education but rather effect a way for each school in New Hampshire to receive equal funding rather than wealthy towns keeping more than they require to fund their schools.

The Rand lawsuit is filed with the Grafton County Superior Court and is scheduled for trial next August. After those trial courts make their decision, it will then be appealed to the New Hampshire Supreme Court and may be a couple of years before a resolution is found, according to Tobin.