There's yet another school-funding lawsuit in New Hampshire.
Three taxpayers from Plymouth and Penacook are arguing the state has failed to abide by a constitutional requirement that taxes funding public education be uniform in rate statewide.
The lawsuitcontends a reliance on local property taxes to fund public education violates the New Hampshire Supreme Court’s 1997 decision in Claremont School District v. Governor II.
The ruling was part of a string of decisions in the 1990s establishing the state’s responsibility to fund an adequate public education and to do so by fair and proportional taxes.
But towns and cities have continued to bear the weight of school funding, which mostly comes from local property taxes. In 2022, state taxes contributed to only 7% of public education funding, compared to 10% in past years, according to the latest suit.
While another 2019 case brought by ConVal School District—which is still pending —focused specifically on the state’s obligation to fund schools, this case zeroes in on how the current funding model impacts taxpayers.
“A lot of this education funding stuff obviously affects students and schools, but it also really affects taxpayers. They really lose out in the system, too.” said Natalie Laflamme, one of three lawyers on the case.
Two of the plaintiffs, Steve Rand of Rand’s Hardware in Plymouth and Dr. Robert Gabrielli of Penacook, are commercial property owners.
“They understand the consequence of living in a high tax community that makes them less competitive against people who own commercial realty in more wealthy, better off communities where the tax rates are lower,” said Andru Volinsky, another lawyer on the case, who also represented the Claremont School District in the 1990s.
The third plaintiff is a couple, Jessica Wheeler Russell and Adam Russell. They are young parents who own a home in Penacook.
Laflamme says rising local education taxes are a huge issue for long-time residents and for young families looking to purchase homes.
“The rates keep getting higher, and it's like they can't afford their houses anymore.”
Volinsky says when he worked on the Claremont cases in the 1990s, this issue was relatively limited.
“The problem—because we haven't dealt with it—has gotten much worse, much more widespread. And it's contributed to things like the aging of our state and the crisis in workforce housing.”
According to Communities and Consequences II, a book about New Hampshire’s aging population and workforce shortage problem, high property values across the state and high taxes in towns with below-average property values discourage young people from buying homes in the state.
And Volinsky says towns with lower tax bases aren’t enthused about affordable housing projects that could ease the housing and workforce shortages.
“Since they have to rely on their local tax base to pay for schools, more children means more expensive,” he said.
Ultimately, Volinsky says the state needs to commit to enforcing its ruling in Claremont II, constitutionally guaranteeing school-age children a free and fair education.
He says New Hampshire continues to have tax rates that vary widely from community to community. "We have to commit to fixing that, and from there, it's a legislative decision."
The case was filed in Grafton County Superior Court on Wednesday.
