John Mark Turner, a lawyer representing property-rich towns known as the Coalition Communities, urged the New Hampshire Supreme Court to uphold a 2011 state law that allows them to keep excess money from a Statewide Property Tax than it needs to support an adequate education.
John Mark Turner, a lawyer representing property-rich towns known as the Coalition Communities, urged the New Hampshire Supreme Court to uphold a 2011 state law that allows them to keep excess money from a Statewide Property Tax than it needs to support an adequate education.
Lawyers for the state and education funding reform advocates squared off this week before the New Hampshire Supreme Court over the Statewide Education Property Tax, which allows property-rich towns to keep their own taxes low rather than remit extra tax money to support other towns.
The Attorney General’s Office and Coalition Communities, the group representing property-rich towns, appealed a decision by Rockingham County Judge David Ruoff that found the tax, known as SWEPT, was unconstitutional because property-rich towns get to keep excess proceeds from the tax and use it for other purposes.
The Department of Education reported last year that $26.3 million of excess SWEPT revenue was retained by 27 municipalities around the state.
Ruoff also ruled SWEPT should be applied to $171.3 million of taxable property located in unincorporated places.
The Legislature adopted SWEPT in 1999 after the Supreme Court decided the state failed to provide enough aid to support an adequate education for all public school students.
In 2011, the Republican-led Legislature changed the tax to allow these property-rich “donor towns” to keep the excess after fulfilling their obligation under the SWEPT formula.
John Mark Turner, a lawyer representing the Coalition Communities, said all property-rich communities are spending the SWEPT dollars on education expenses.
“They are spending the money on the schools on the direction of taxpayers,” Turner told the court. “The court has long held the Legislature has wide latitude to decide how to spend taxpayer funds.”
But Natalie Laflamme, a lawyer representing property-poor districts that sued over the law, said some affidavits from local officials revealed the SWEPT money was used for other purposes.
“We know that they are treating it as general town funds that are fungible,” Laflamme said.
Judge Ruoff ordered the state Department of Revenue Administration to require these property-rich towns to turn over the excess SWEPT funding to the Education Trust Fund for use by all school districts.
Solicitor General Anthony Galdieri told the Supreme Court that, if it agrees with the Ruoff ruling, it should send this issue back to the Legislature for it to fix the statute rather than force the richer towns to turn over the funds.
“The remedy in this case is far too overbroad and violates separation of powers and is problematic,” Galdieri said.
Associate Justice Patrick Donovan questioned the need to do that.
“How can we be confident the Legislature’s going to fix it?” Donovan asked. “It’s had 30-plus years now, and it hasn’t fixed it.”
After the oral arguments, Coalition Chair Mark Decoteau said the property-poor districts are asking the justices to violate local control when it comes to taxing and spending decisions.
“Education expenses are decided by the voters who will pay the property taxes for use within their community. If the ‘donor/receiver’ town system is reinstated, it will take away local control and send taxes from one community to another without any accountability to the taxpayers who raised the funds,” Decoteau said in a statement.
“Forcing this redistribution of property taxes from one community to another will increase tax rates in the ‘donor’ communities without the consent or oversight of those taxpayers.”
Zack Sheehan, executive director of the N.H. School Funding Fairness Project, said it’s unfair for the wealthy to enjoy this “loophole” under the current SWEPT.
“We cannot continue to allow these loopholes to provide a break to a small group of property owners and siphon funds away from the state when those funds could be sent to the districts that need them the most,” Sheehan said in a statement.
Education reform advocates are closely watching a second suit from the ConVal School District and other communities in which Ruoff ruled that the per-student education aid amount was too low and should be significantly raised.
Ruoff’s decision in that case, if upheld by the high court, could require an increase of $500 million a year in education aid.
The state has appealed that ConVal decision as well.
Lawyers for both sides asked the Supreme Court to act on the SWEPT lawsuit first because it would give guidance to local officials as they prepare to adopt next year’s school budgets.
Three judges heard the oral arguments. Chief Justice Gordon MacDonald said a fourth judge, James Bassett, was absent but will take part in the decision.
The fifth judge, Anna Barbara Hantz Marconi, is on administrative leave and agreed to have her law license temporarily suspended while she fights charges she interfered in a criminal investigation of her husband.
University of Massachusetts Amherst is warning international students and staff who are traveling over the winter break to plan to return to the United States before President-elect Donald Trump is inaugurated on Jan. 20, 2025.
Nathan Smith has already sent three kids to college. But he’s never seen anything like the volume of recruiting materials pouring in since his fourth child reached her senior year in high school this fall.
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