Latest news with #StatewideEducationPropertyTax
Yahoo
2 days ago
- Business
- Yahoo
NH high court upholds education property tax scheme as constitutional
The New Hampshire Supreme Court rejected a challenge to the state's education aid law, upholding a plan that lets property-rich towns keep excess money raised under a statewide property tax that supports public schools. The high court's 3-1 decision overturned the 2023 ruling of Rockingham County Superior Court Judge David Ruoff, who had said that letting richer towns keep some of that tax violated Part II, Article 5 that holds all taxes must be 'proportional and reasonable.' In the majority opinion, Supreme Court Chief Justice Gordon MacDonald wrote that the statewide property tax passes legal muster because it's imposed at the same rate on all cities and towns. 'We hold that the SWEPT (Statewide Education Property Tax) scheme is constitutional under Part II, Article 5 because it is 'administered in a manner that is equal in valuation and uniform in rate throughout the state,'" MacDonald said. Joining MacDonald in the majority decision were Associate Justices Patrick Donovan and Melissa Countway. Associate Justice James Bassett was the lone dissenter. He maintained that the SWEPT clearly gave a financial benefit to property-rich towns not available to other communities. 'The impact of the SWEPT scheme on taxpayers in excess SWEPT communities is anything but 'theoretical' or 'indirect': the effective SWEPT rate reduction those taxpayers enjoy is real and direct. The impact of the SWEPT scheme on taxpayers in other communities that do not generate excess SWEPT is also real and direct: those taxpayers enjoy no comparable reduction in their effective SWEPT rate,' Bassett said. In its lawsuit, the plaintiffs noted that the property-rich Lakes Region town of Moultonborough has an effective SWEPT tax rate of $0.44 per $1,000 of property value while the poorer town of Plymouth has an effective rate of $1.56. 'This disparity in effective tax rates violates Part II, Article 5 and 'is precisely the kind of taxation and fiscal mischief from which the framers of our state Constitution took strong steps to protect our citizens,'' Bassett wrote. An ongoing fight When lawmakers first created SWEPT in the 1990s, it compelled rich towns to send to the state all it had collected under the tax. This plan sparked a movement by these 'donor' towns that banded together as the Coalition Communities. For many years they lobbied the Legislature to change the statute so that they didn't have to send more than $20 million to the state for distribution to other communities as part of state aid to education. In the Tea Party-dominated election of 2010, voters gave Republicans a 3-1, veto-proof majority in both chambers of the State House. The Legislature in 2011, over the objection of then-Democratic Gov. John Lynch, got rid of donor towns, passing a law that let them keep their excess amounts. Zach Sheehan, executive director of the NH School Funding Fairness Project, said the decision allows a 'two-tiered' system of public schools to exist. 'For far too long the state has allowed this two-tiered system to operate, and this order will allow it to continue at the expense of funding for schools in the districts that need it the most,' Sheehan said in a statement. He urged lawmakers to remedy the matter by changing the SWEPT law. 'This is a major step backwards for our state, but it doesn't have to be forever,' Sheehan said. 'Just because this SWEPT loophole is allowed does not mean that the Legislature cannot act to close it. ' The Supreme Court still has another education funding case, and another appealed ruling by Ruoff, on its plate. The Ruoff ruling under appeal is the case in which the ConVal regional school district and nearly 20 others sued the state, alleging that the level of state aid to public schools wasn't enough to meet the requirement that the state support the cost of an adequate education for all students. In that matter, Ruoff concluded that the state's definition of an adequate education cost was 'woefully' short and ordered the Legislature to increase state spending to public schools by more than $500 million a year. klandrigan@
Yahoo
2 days ago
- Business
- Yahoo
Supreme Court rules SWEPT tax constitutional, settling one school funding issue
Supreme Court Justices Patrick Donovan, Gordon MacDonald, and Melissa Countway hear oral arguments in Rand v. State of New Hampshire, on Nov. 13, 2024. (Photo by Ethan DeWitt/New Hampshire Bulletin) New Hampshire's Statewide Education Property Tax is equal and uniform and does not violate the New Hampshire Constitution, the state Supreme Court ruled Tuesday, in a blow to state taxpayers who had sued the state and alleged unfairness. In a 3-1 decision, the court held that the tax, known as the SWEPT, is administered fairly and evenly by the Department of Revenue Administration, even though wealthier towns might collect more than they need for their schools and keep the excess. 'Accordingly, regarding the 'excess SWEPT' issue, we hold that the SWEPT scheme is constitutional under Part II, Article 5 because it is 'administered in a manner that is equal in valuation and uniform in rate throughout the State,'' wrote Chief Justice Gordon MacDonald in the majority opinion. The SWEPT is a mandatory process in which towns collect property taxes to pay for their schools. Under law, the state sets a goal each year for New Hampshire cities and towns to collect a combined $363 million, and each year the Department of Revenue Administration sets a tax rate per $1,000 of property value that towns must collect. But that statewide tax rate typically results in towns with higher property values collecting far more from the SWEPT than towns with lower property values, and sometimes more than is needed to fund their schools. When the tax was enacted in 1999, those wealthier towns were required to relinquish any excess SWEPT revenues to the state to be redistributed to needier towns through the state's adequacy formula. But in 2011, then-Gov. John Lynch signed a law to allow those towns to keep the excess, after pushback by some communities that considered themselves 'donor towns.' Plaintiffs in the lawsuit, Rand v. State, had argued that because the current system allows wealthy towns to collect more in property taxes than they need, and because those towns can use the excess to lower the overall percentage of property taxes paid, the tax is neither equal nor uniform in practice. Residents of towns with lower property values pay much higher local property tax rates as a percentage than those in wealthier towns, plaintiffs said. Lawyers for the plaintiffs — who included Natalie LaFlamme as well as John Tobin and Andru Volinsky, two attorneys on the winning side of the landmark Claremont school funding decisions in the 1990s — had brought a motion for 'declaratory judgment' to the Supreme Court. That motion was intended to allow the Supreme Court to rule quickly on the constitutionality of the SWEPT tax before the rest of the case receives a hearing in superior court, in order to lay questions about the SWEPT tax to rest. The court did put the question to rest Tuesday, but not in the plaintiffs' favor. MacDonald held that the SWEPT is administered evenly because the Department of Revenue Administration applies the same flat tax rate each year to all cities and towns, wealthy or poor. Whether those towns keep the excess revenue or not, and whether some towns raise enough to pay for schools or not, does not affect whether the underlying tax is unequal and does not make it unconstitutional, MacDonald wrote. In doing so, MacDonald dismissed evidence from an expert indicating the difference in effective property taxes between towns. 'The plaintiffs do not dispute that under the SWEPT, as administered, taxpayers are actually assessed at a uniform rate. That concludes the constitutional inquiry,' MacDonald wrote. 'The 'effective rates' in the expert's data reflect, at most, an indirect effect of municipalities retaining excess SWEPT revenue, as the statutory scheme permits. Theoretical indirect effects of the scheme on municipalities are not relevant to the analysis under Part II, Article 5.' Associate Justices Melissa Countway and Patrick Donovan concurred with MacDonald. But Senior Associate Justice James Bassett dissented on the question of the constitutionality of SWEPT. Responding to MacDonald, Bassett argued that under SWEPT, taxpayers in poorer towns do face disparities in taxation compared to those in wealthier towns. 'The impact of the SWEPT scheme on taxpayers in excess SWEPT communities is anything but 'theoretical' or 'indirect': the effective SWEPT rate reduction those taxpayers enjoy is real and direct,' Bassett wrote. 'The impact of the SWEPT scheme on taxpayers in other communities that do not generate excess SWEPT is also real and direct: those taxpayers enjoy no comparable reduction in their effective SWEPT rate.' The fifth associate justice, Anna Barbara Hantz Marconi, has been on administrative leave from the court since July 2024, pending a criminal case against her for allegedly interfering with the criminal investigation of her husband. The decision overrules parts of an earlier decision by Rockingham Superior Court Judge David Ruoff, who ruled in 2023 that the SWEPT was illegal. The ruling does not end the Rand case; it merely answers plaintiffs' attempts to receive a declaratory judgment on SWEPT. The rest of the Rand case alleges that New Hampshire's adequacy formula, which currently gives a minimum of $4,182 per student to public schools that need aid, is far too low to pay for an adequate education and is unconstitutional. The court did not rule on that question Tuesday. But it is currently considering a different school funding case, Contoocook Valley School District v. New Hampshire, in which a number of school districts have also alleged that the adequacy formula is too low to provide an adequate education. Oral arguments in that case, known as the ConVal case, took place at the Supreme Court in December. Ruoff has also ruled that the state's formula is unconstitutionally low. The Supreme Court's expected ruling in the ConVal decision could affect how the rest of the Rand lawsuit plays out in superior court, now that the constitutionality of SWEPT has been affirmed by the high court. In an order sent in October, the court indicated that it is unlikely to overturn the Claremont decisions, in which the Supreme Court established the constitutional requirement that the state of New Hampshire ensure an adequate education. Tuesday's ruling did include a partial victory for plaintiffs. The court held that use of 'negative tax rates,' in which the Department of Revenue Administration allows unincorporated towns that don't have school districts to offset their SWEPT tax with negative rates to effectively raise no SWEPT revenue, is unconstitutional. But the court did not direct the state to stop setting negative tax rates. Instead, it said the process for doing so, and fixing the unconstitutional law, is in the hands of the legislative and executive branches. 'Resolving the constitutional infirmity in the State's practice of setting negative local tax rates is the responsibility of the other co-equal branches of government,' MacDonald wrote.
Yahoo
19-03-2025
- Politics
- Yahoo
In New Hampshire, the public education fight offers a clear view of the state of the union
New Hampshire has the fourth highest effective property tax rate in the country. (Getty Images) One of the best ways to understand what Republican politicians are trying to sell — or inflict upon — the American people is to look at the fight over public education. In New Hampshire, 61% of public school funding comes from property taxes raised locally, and another 9% comes from the Statewide Education Property Tax (SWEPT). And, as noted by the New Hampshire Fiscal Policy Institute in a January fact sheet, 'New Hampshire spent the least amount of state funds on its public K-12 schools (as a percentage of the total revenue) of any state in the country.' New Hampshire also ranks dead last in state funding for higher public education, which translates to in-state tuition being much less affordable here than it could and should be. Meanwhile, the Granite State has the fourth highest effective property tax rate in the country, and this year's town meeting season suggests a lot of local property-tax payers have had enough. Their anger is justifiable — but it's often misdirected. Blaming school districts for high property taxes is like blaming a doctor for the cost of health care. It's the system that's broken, not the people working within it. That is what makes New Hampshire's voucher program — dubbed education freedom accounts – so utterly misguided and so positively destructive. As originally pitched, the purpose of New Hampshire's EFA program was to give lower-income families an opportunity to use public money to pay for an alternative to their community public school, including for home schooling or private school expenses. It was a bad idea at inception, mind you, but it was at least defensible as a publicly funded voucher created solely for the benefit of lower-income Granite Staters. After all, those lower-income residents are much more likely to be living in a property-poor community with underperforming schools. Now, to nobody's surprise, Republicans in the State House are working to make the voucher program universal, which strips the EFA program of its only marginally credible 'public good' argument: that it is meant to help those with the least. But 'school choice' has always been a lie propagated by a myth. The truth is that New Hampshire's system of funding public education is a wreck by design — for communities, taxpayers, and most of all children — and the voucher program is a bag of rocks painted to look like a lifeboat. Privatizing our public schools is the ultimate goal of school vouchers, and if you think for a second that corporate greed isn't going to make matters infinitely worse for those with the least then you should read up on Big Pharma, Big Oil, and American tech and health care giants. History and modernity suggest America's 'Big Education' era is probably not going to be awesome for America's middle and lower classes. But if we're going to debate the merits of vouchers, whether income-capped or not, we should at the very least begin with the understanding that New Hampshire public schools are not monolithic. To say that public schools are failing 'in general' is a complete misreading of the situation. New Hampshire public schools in wealthier communities are doing just fine, with places such as Hanover, Windham, and Bedford boasting some of the top-ranked high schools in the state (and top 10% in the nation), according to U.S. News and World Report. Each of those three communities has a median household income of more than $160,000. At the bottom of the school rankings are communities such as Claremont, Littleton, and Pittsburg, each with a median household income of less than $55,000. That data tells us public schools are not failing in New Hampshire but that New Hampshire is failing its public schools. The state's system of education funding creates ZIP code winners and ZIP code losers, and then the residents of those losing towns are directed to blame their own school districts — their own neighbors — for the too-high price of not-good-enough results. Rather than addressing a system that was designed to ensure poorer communities have poorer schools, Republicans instead offer us vouchers. It's a destructive 'solution' to a problem they themselves created and exacerbated through stubborn, near-religious obedience to bad tax policies. Classic GOP, classic New Hampshire. For whom does our vaunted tax advantage exist if not for struggling New Hampshire families in struggling New Hampshire towns and cities? The answer is just as clear here in New Hampshire as it is in Washington. The many must pay so the few can prosper, and so it goes.
