STATE OF NEW HAMPSHIRE

SUPREME COURT

2000-179, OPINION OF THE JUSTICES

(reformed public school financing system)

O R D E R

The following request of the senate for an opinion of the justices was adopted on March 23, 2000, and filed with the supreme court on March 27, 2000. By letter dated May 31, 2000, the court asked the senate if it desires the court to respond to the request even if the answer is returned after the adjournment of this legislative session. On June 8, 2000, the senate responded in the affirmative.

SENATE RESOLUTION 13

Whereas, there is presently pending before the senate SB 462-FN-A-LOCAL, "An act establishing a reformed public school financing system for ensuring educational adequacy for all children; establishing a state public education assistance system funded solely with state tax revenues, and making an appropriation therefor"; and

Whereas, SB 462-FN-A-LOCAL would establish a comprehensive system for financing public schools within the state, including state aid through "baseline adequacy assistance" and through "adequacy guarantee aid," along with local resources raised through property taxes administered through local democratic decision-making (hereinafter, the "financing program"); and

Whereas, SB 462-FN-A-LOCAL would distribute $750 million of state financial aid to school districts in the first fiscal year ending July 31, 2001, with $550 million distributed through the "baseline assistance" method on a weighted per pupil basis and $200 million distributed through the "adequacy guarantee assistance" method based on a foundation aid formula that assesses the relative financial needs of each community using several factors including per capita income, local property valuations, and measures of local tax "effort"; and

Whereas, SB 462-FN-A-LOCAL’s total appropriation of $750 million of state financial aid would be funded by the following state-imposed taxes and revenues: (i) $409 million of revenues raised by a state property tax imposed at a uniform rate of $6.10 per $1,000 of equalized valuation of non-public utility real property throughout the state, and (ii) $341 million of revenues raised by other state taxes and general fund sources; and

Whereas, the balance of the public education costs throughout the state over the state assistance of $750 million would be funded with revenues raised by local real property taxes that would be established in each community through local democratic processes; and

Whereas, under this integrated financing program, direct state appropriations would account for approximately half of the total dollars spent on public elementary and secondary education, ranking New Hampshire much higher than the following states (based on U.S. Department of Education data for School Year 1996-1997):

State Local State Federal
Connecticut 59.4% 37.1% 3.5%
Massachusetts 55.3% 39.9% 4.8%
New York 54.8% 39.8% 5.4%
Pennsylvania 55.2% 39.3% 5.5%
Rhode Island 54.0% 40.6% 5.4%

Whereas, SB 462-FN-A-LOCAL would reflect a legislative determination that the provision of an adequate education is not a static concept, but is best accomplished through the establishment of a process that encourages local communities to evaluate on an annual basis the costs and structure of local public education; and

Whereas, SB 462-FN-A-LOCAL would further reflect a legislative determination that incorporation of significant local resources in such a manner that vests local parental and academic resources in the local public school system is the best means of providing an adequate public education for all children throughout the state; and

Whereas, SB 462-FN-A-LOCAL would further reflect a legislative determination that such reliance on local resources, while producing vibrant and excellent education systems in most communities throughout the state, would present the possibility in certain needy communities that local resources could be insufficient to ensure the provision of an adequate public education; and

Whereas, to address directly this possibility, SB 462-FN-A-LOCAL would implement a state financial assistance program that would substantially increase state aid to public education over the level that was in place prior to 1999; and

Whereas, SB 462-FN-A-LOCAL would distribute such state aid among communities based on the foundation aid formula in accordance with legislative determinations assessing the relative needs of various recipient communities, based on several factors including per capita income, local property valuations, and measures of local tax "effort"; and

Whereas, as a result of these determinations of need, the level of state aid distributed among communities would differ greatly, with no community receiving the same amount of state aid per pupil as any other community; rather such state aid would be distributed in a manner intended to satisfy the state’s obligation to guarantee funding to ensure that all children are provided with an adequate education; and

Whereas, all of such state aid would be funded with state revenues that are administered in a manner that is proportional and reasonable throughout the state; and

Whereas, a question has been raised whether SB 462-FN-A-LOCAL satisfies the New Hampshire Constitution; and

Whereas, some believe that this court’s decision in Claremont School District v. Governor, 142 N.H. 462 (1997)("Claremont II ") mandates that the general court must, first establish and define "adequate education" on a dollar cost basis throughout the state, and, second, pay for all of the resulting adequate education dollar costs using a common formula throughout the state, regardless of the relative needs of various communities; and

Whereas, such a construction of the court’s Claremont II decision has led to the enactment of Chapter 17 and Chapter 65 of 1999 New Hampshire Laws, which distribute state financial assistance among every community throughout the state on a strict weighted per pupil basis, regardless of the quality of the local public school system or the capacity of the local community to provide funds through local resources; and

Whereas, in contrast, SB 462-FN-A-LOCAL treats "adequate education" as a quality that is not definable by any common formula applied throughout the state on a dollar cost basis, provides for an adequate education throughout the state through a comprehensive mix of local and state funding similar to that reflected in other New England states, and incorporates within the funding mix a state aid distribution formula that is designed to allocate limited state aid to communities that are most in need in a manner that guarantees funding to ensure that all children receive an adequate education throughout the state; and

Whereas, the approach in SB 462-FN-A-LOCAL appears consistent with the ultimate constitutional requirement that it is "the State’s duty to provide a constitutionally adequate education and to guarantee adequate funding" (emphasis added); and

Whereas, the senate respectfully requests expeditious review of this resolution by the court because SB 462-FN-A-LOCAL is intended to become effective on July 1, 2000, and because enactment of public school financing legislation that fails to satisfy the constitutional requirements of the Claremont II decision could present the risk that local and state governments might be required to refund substantial amounts of local property tax revenues; now therefore be it

Resolved by the Senate:

That the Justices of the Supreme Court be respectfully requested to give their opinion upon the following important questions of law:

(a) Would the enactment of SB 462-FN-A-LOCAL satisfy the requirements of part II, articles 5, 6, and 83 of the New Hampshire constitution?

(b) Would the enactment of SB 462-FN-A-LOCAL violate any other provisions of the New Hampshire constitution?

That the senate clerk transmit copies of this resolution and SB 462-FN-A-LOCAL to the justices of the supreme court.

Typewritten memoranda on the questions presented by the request may be furnished by any legislator, attorney, organization, interested party, or member of the public on or before October 2, 2000. An original and twelve copies of any memorandum must be filed with the clerk’s office.

Brock, C.J., did not participate.

 

 

 

DATE: August 18, 2000 ATTEST:____________________________________

Howard J. Zibel, Clerk

 

Distribution:

President of the Senate Senate Majority Leader

Senate Minority Leader Clerk of the Senate

Speaker of the House House Majority Leader

House Minority Leader Clerk of the House of Representatives

Governor and Council Legislative Services

Press NH Bar Association

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