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New Hampshire

Costing Out | Useful Resources

Historical Background

In 1999, New Hampshire changed its school funding system to include a statewide property tax, in response to rulings by the New Hampshire Supreme Court in Claremont School District v. Governor, 635 A.2d 1375 (1993) (Claremont I), Claremont v. Governor, 703 A.2d 1353 (1997) (Claremont II), and Claremont v. Governor, 744 A.2d 1107 (1999) (Claremont III).

In Claremont I, the court held that the New Hampshire Constitution "imposes a duty on the State to provide a constitutionally adequate education to every educable child and to guarantee adequate funding" and remanded the case for trial. The court also noted that the legislature and the governor have the responsibility to define "the specifics of" an adequate education.

In Claremont II, the court declared the then current education finance system unconstitutional because it violated the state constitution's requirement that all state taxes be "proportional and reasonable." Under that system, taxpayers in lower wealth school districts paid as much as four times the local property tax rate of those in higher wealth districts. The court also ordered the state to follow a four-part remedy: define a constitutionally adequate education; determine the cost of such an education; fund an adequate education throughout the state; and ensure its delivery through an accountability system.

Costing-Out

In 1998, consultants hired by a legislative commission issued a report on the cost of an adequate education in New Hampshire. The report offered four alternatives based on the average operating expenditures in successful districts. The legislature revised the funding system by choosing the alternative that produced the lowest cost basis, subtracting 10%, and not including a provision for inflation in future years.

In 2000, consultants hired by another legislative commission released a more limited study of educational costs. The legislature adopted some of the study’s recommendations in its changes to the funding system in 2005.

Compliance Proceedings

In 2001, plaintiffs returned to the supreme court, claiming that the state's new funding system remained unconstitutional and that the state had not complied with the court's 1997 remedial order. After briefing and oral argument, the court ordered the state to hold school districts accountable for both inputs and outcomes, in Claremont v. Governor, 794 A.2d 744 (2002). The state promptly enacted an accountability statute.

Londonderry v. State

Several school districts that lost revenue after the 2005 changes to the state’s school funding system filed suit, and in 2006, the trial court granted plaintiffs’ motion for summary judgment. On appeal, the supreme court affirmed the lower court’s finding that the state had failed to define an adequate education, ordered the state to do so by June 30, 2007, and stayed action on other issues because they flow from the definition.

The New Hampshire Legislature met the June 30 deadline. The new adequacy definition provides content standards that schools have to meet and requires all school districts to offer an opportunity to attend kindergarten to every student. Thirteen New Hampshire districts do not currently offer kindergarten to all students.

The legislation also directs a legislative committee to identify “enhanced needs” schools and propose additional resources for those schools. While the original definition proposed in the Senate would have required lawmakers to direct specific additional resources to “enhanced needs” schools, a compromise with the House scaled this back. In addition, a new committee, made up of lawmakers and a representative from the Governor’s office, issued a new study for determining the cost of an adequate education under the new definition on February 1, 2008.

After the Londonderry ruling, Governor Lynch proposed a constitutional amendment that would have limited the authority of the judicial branch in regards to school funding. The state House overwhelmingly rejected the amendment in early June 2007, but the governor has revived the constitutional amendment and is again pressing the legislature to adopt the amendment in its 2008 session.

On October 15, 2008, the New Hampshire Supreme Court dismissed Londonderry Sch. Dist. v. State, 958 A. 2d 930 ( N.H. 2008). The court terminated its jurisdiction on the grounds that the case was now moot since the particular statute that the plaintiffs had attacked in their 2005 complaint had now been replaced. Plaintiffs maintained that the revised funding system is still unconstitutional, but the court held that they would need to file a new action to litigate these issues.

Recent Events

In mid-March, the New Hampshire House passed, with a 252-113 vote, a constitutional amendment intended to give the Legislature full discretion on school aid, effectively shutting the judicial branch out of school finance decisions. The bill must now be considered by the Senate and, if approved, will go to the voters in 2012, who will have to approve it by a 2/3 vote. The amendment aims to remove the courts from school funding decisions. It provides that, “the legislature shall define standards for education, determine the level of state funding thereof, establish standards of accountability, and allocate state funds in a manner that mitigates disparities in educational opportunity and fiscal capacity, provided that a reasonable share of state funds shall be distributed on a per pupil basis.”

Useful Resources:

Drew Dunphy, Moving Mountains in the Granite State: Reforming School Finance and Defining Adequacy in New Hampshire (Campaign for Fiscal Equity, Inc. March 2001)

Last Updated: March, 2011