NOW COME the petitioners in this matter, through counsel, and submit this memorandum of law in support of their Motion for Procedural Order.
I.Introduction
This Court first considered the issue of school finance 28 years ago in Laconia Bd. of Education v. Laconia, 111 N.H. 389 (1971). The litigation of school finance issues has included both the case of Jesseman v. State, No. 83-371 (N.H. February 13,1984) and the instant matter. The Jesseman case was settled with the passage of [a] foundation aid formula known as the Augenblick Formula; however, the funds anticipated to be distributed under the Augenblick Formula were never appropriated. Claremont School Dist. v. Governor, 143 N.H. 154, 156 (1998) (Motion for Extension of Deadlines).
Petitioners filed this case in June 1991 and, since that time, the Court has issued three reported decisions. Claremont School District v. Governor, 138 N.H. 183 (1993) (Claremont I); Claremont School District v. Governor, 142 N.H. 462 (1997) (Claremont II); and Claremont School District v. Governor, 143 N.H. 154 (1998) (Motion for Extension). Petitioners participated in a six week trial on the matter before the Merrimack County Superior Court and have twice submitted comments in aid of Opinions of the Justices, Opinion of the Justices, 142 N.H. 892 (1998) (School Financing) and Opinion of the Justices, 1999 WL 129273 (N.H. March 11, 1999) (Tax Plan Referendum). Petitioners have also participated in innumerable meetings with representatives of the State and interested citizens, though petitioners have not been permitted to engage in a formal negotiation or mediation.
Charitable contributions made by concerned citizens, school districts and organizations have helped the petitioners defray some of the costs of the litigation. Numerous counsel have largely contributed their time without compensation. Despite all of this effort, the taxpayers and children of the petitioner districts have endured continued to endure an illegal and unconstitutional system of education finance and public education that has existed, with only modest changes, since the time of Arthur Nighswander's legal argument in the Laconia Board of Education case.
Petitioners seek to bring this lengthy chapter of New Hampshire legal history finally and expeditiously to a close by their Motion for Procedural Order. For too long, the State has enjoyed the advantage of time and delay. For too long, class after class of children in the petitioner districts have graduated or dropped out of schools that were constitutionally inadequate to prepare them for full participation in the workforce and in our democracy. Though the Court has acted with expedition, the legislative and executive branches have drawn out proceedings and missed crucial deadlines. Petitioners contend that the remaining litigation can be expedited without handicapping either party's efforts to fully protect their legitimate interests, by creating a bifurcated method of resolving the remaining issues in this matter concerning remedy.
II. The Two Procedural Stages
The Court has maintained jurisdiction over the instant matter since Claremont II.
Petitioners request the Court use its jurisdiction to permit the parties to obtain an expeditious resolution of the remaining issues concerning remedy by permitting a targeted and specific review of certain portions of HB 117, Chapter 17 of the laws of 1999, as passed into law on April 29, 1999 and as modified by HB 300, known as a trailer bill or technical corrections bill. This review would be on the face of portions of the statutes and upon uncontested facts. Those portions of the bill not under challenge in the first phase would remain intact. If the Court invalidates any portions of HB 117, the offending portions of the bill would be severed and the majority of the HB 117 funding scheme would remain in force during the remainder of the litigation.
Petitioners also request the Court assign a master to complete the necessary factual development upon which the Court would base its ruling of what constitutes an adequate education. This second stage, conducted under the master's supervision, would take approximately one year to prepare. The second stage would commence immediately upon the release of the Court's rulings from the first stage. The first stage rulings are necessary to provide the parties with guidance for the second stage.
The Legislature and the Governor are free to continue work on their own remedy during the first and second stage proceedings before this Court and adoption of a constitutional remedy by the State would render moot portions of the litigation before this Court. If the State fails to adopt and fund a constitutional definition of adequacy, the Court's definition derived from the second phase of litigation would be put into place.[1]
Following are the petitioners' suggestions for issues to be addressed in each stage. The issues are briefly described for the Court in this memorandum. Petitioners would expect to file lengthier and more detailed pleadings concerning the issues accepted by the Court for litigation in either stage of the proposed proceeding. Petitioners reserve the right to supplement the pleadings filed today and to file additional pleadings when the Court rules upon the plan suggested herein.
A.
Issues
to be litigated during the first stage.
1. Whether the phase-in of the statewide property tax violates Claremont II.
This Court's central holding in Claremont II was that [T]he varying property tax rates across the State violate part II, article 5 of the State Constitution in that such taxes, which support the public purpose of education, are unreasonable and disproportionate. 142 N.H. 462, 471 (1997). The Court recognized that it is the Legislature's role to determine what funding mechanism would be employed to meet the State's constitutional duty to provide an adequate education, and the Court said that the Legislature has wide latitude in choosing a funding model. 142 N.H. at 476. However, the Court set the constitutional parameters for any future use of the property tax:
To the extent that the property tax is used in the future to fund the provision of an adequate education, the tax must be administered in a manner that is equal in valuation and uniform in rate throughout the State.
142 N.H. at 471.
Six months later, this Court reaffirmed this core principle by advising the Senate that a property tax system that would have created lower effective tax rates in property-rich towns likewise violates the plain wording of part II, article 5 and the express language of Claremont II. Opinion of the Justices (School Financing), 142 N.H. 892, 902 (1998).
In a belated response to this Court's order in Claremont II, the Legislature has now elected to fund the state's educational efforts in large part through a statewide property tax of $6.60 per thousand of assessed valuation. HB 117 provides, however, that property taxpayers in property-poor towns pay this full rate immediately, while the rate is imposed gradually over five years in fifty property-rich towns.
Section 41 of the bill, codified at R.S.A. 198:46, reduces the tax rate for "municipalities for which the education property tax exceeds the amount necessary to fund an adequate education [in their own community]." Because of high property values in these towns, they can raise all the funds they need to meet the "adequate education per pupil cost" for the students in their districts, as well as varying amounts of "excess" funds, by levying the state property tax at the uniform rate of $6.60. These property-rich towns would ordinarily be required to remit to the State all of the "excess" funds. However, the bill allows these towns to reduce the state property tax rate in their towns, in some cases quite dramatically, because the "excess" payments are "phased in" over a five-year period. The bill provides the following timetable:
Tax
Year
Percent of
"Excess" to be Collected
1999. . . . . . . . . . . 10%
2000. . . . . . . . . . . 20%
2001. . . . . . . . . . . 30%
2002. . . . . . . . . . . 50%
2003. . . . . . . . . . . 75%
2004. . . . . . . . . . .100%
HB 117, section 41, to be codified at R.S.A. 198:46 IV.
In Pittsfield, Allenstown, Claremont, Lisbon, and Franklin, all homeowners will pay the full $6.60 rate this year. Under the "phase-in" for Moultonborough, the 1999 state education property tax rate will be approximately $3.18.[2] Thus, the taxpayers of Pittsfield will pay the new state education property tax in 1999 at a rate that is 208% higher than the rate to be paid by the taxpayers of Moultonborough. In Claremont II, this Court said that a 400% difference in tax rates between Pittsfield and Moultonborough was "precisely the kind of taxation and fiscal mischief from which the framers of our State Constitution took strong steps to protect our citizens." 142 N.H. 462, 465. Thus, the constitutional violation at the heart of the Claremont II decision will continue, at a still grossly disproportionate level, as the second anniversary of that decision approaches.
The disproportionality will not be fully eliminated until the 2004 tax year.[3] Residents of the property-poor towns, no matter how deserving, will not be able to seek any "phase-in" of this new state tax in any of the years it is offered, while all taxpayers in the property-rich towns, regardless of their individual circumstances in any tax year, will automatically receive the rate reduction for all five years.
In Section 1 VI of the bill, the Legislature stated that the purpose of the "phase-in" is to prevent the foreclosures and bankruptcies that "sharp increases" in property taxes might cause in property-rich towns. The Legislature did not address the foreclosures and bankruptcies that have occurred for years in the property-poor towns, where property owners have continued to pay unconstitutionally disproportionate taxes while waiting for the Legislature to act.
The Legislature was certainly free to provide for a uniformly gradual increase across the State in the rate of any new state tax it created to fund education, in order to avoid any anticipated economic disruption, while raising the money it needed to meet its immediate educational obligations from other sources. Alternatively, the Legislature could have decided to impose a new tax across the State at its permanent rate without any transition period. In either case, the Legislature could have exercised its policy prerogatives while complying with the constitutional mandate of part II, article 5 and Claremont II. Instead, the Legislature decided to impose the full state property tax rate immediately on some taxpayers, while "phasing-in" the rate over five years for others. Perversely, the taxpayers who had suffered the most unconstitutional hardship and economic burden for many years under the prior system are required to pay the full rate of the new tax right away. At the same time, legislative concern for the possible economic hardship of those who had benefited from the old system resulted in an extension of the unfair protection they received under that unconstitutional scheme. The Legislature apparently concluded that the taxpayers in the property-poor towns should be content with an easing of the injustice of the prior local property tax and not complain if the new state property tax replicates that injustice for another five years.
The essence of Claremont II is that taxpayers across New Hampshire should pay school taxes at an equal rate, so that all taxpayers, regardless of the town they live in, bear the same fair share of the burden of meeting our common duty to educate the State's children. In denying the State's motion for a two-year extension of the deadline for complying with the Claremont II ruling, this Court said, "Absent extraordinary circumstances, delay in achieving a constitutional system is inexcusable." Claremont School District v. Governor (Motion for Extension of Deadlines), 143 N.H. 154, 158 (1998). The "phase-in" subsequently created by the Legislature amounts to a further delay of five years in achieving a uniform school tax rate. Thus, the "phase-in" is both a clear violation of the constitutional principles set forth in Claremont II and a direct contravention of this Court's order that there would be no further extension of the State's deadline for compliance with that decision. The Legislature chose to ignore this Court's strong statement that "The constitutional rights . . . of all taxpaying citizens in New Hampshire to reasonable and proportional taxation are not to be denied any longer." 143 N.H. at 158.
Out of respect for these taxpayers, this Court should hold that if the new state property tax is to pass constitutional muster, the Legislature must either eliminate the "phase-in" or make it available to all property taxpayers in the State.
2. Whether the State's use of
the Total
Equalized Valuation instead of the Equalized Assessed Valuation results
in
unequal tax rates.
How the State elects to calculate property values directly impacts on the uniformity of the tax rate used to fund the State portion of the cost of public education. The Department of Revenue Administration, in its published documents, has chosen to base property values for the statewide property tax on a calculation known as the Total Equalized Valuation (TEV), less utilities. The use of the TEV introduces a degree of inequality to the tax rates because the tax is levied in part on the value of Shared Revenues received by communities under R.S.A. 31-A. The amounts received by the school districts as Shared Revenues are based upon the historical receipts under the former stock-in-trade tax. R.S.A. 31-A:2-4. The amounts received are not uniform throughout the state. Moreover, even though the districts are taxed on the amounts received as Shared Revenues, HB 117 eliminates the Shared Revenues formerly received by school districts. Section 10, revising R.S.A. 31-A:4 I. In essence, the use of the TEV as the basis for taxation means that districts are taxed based upon unequal valuations. Furthermore, the valuations include a phantom amount that represents the Shared Revenues that the school districts no longer receive.
The more appropriate measure of valuation is the Equalized Assessed Valuation (EAV), a calculation that measures the net local assessed value modified by the Department of Revenue Administration's Inventory Adjustment. The Department of Revenue Administration compiles both the TEV and the EAV and publishes both figures annually. The following chart reflects the state average effective tax rate if the TEV factor is used instead of the EAV. The chart also reflects the effective tax rate for each of the five petitioner districts and shows the degree of variance from uniformity introduced by the use of the wrong valuation factor.
Effective
Tax Rate Based Upon Use of TEV
Allenstown............$6.98/1000
Claremont.............$7.03/1000
Franklin................$7.15/1000
Pittsfield.................$6.84/1000
State of New Hampshire, Department of Revenue Administration 1998 Annual Report (R.S.A. 20:7). The New Hampshire Municipal Association has estimated that the change in cost from using the EAV instead of the TEV is about $12 million. Concord Monitor, New hole found in funding plan, Municipal group blasts property tax," June 25, 1999 at A-1, attached as Exhibit 2.
The definitions for the terms TEV and EAV are contained in the Department of Revenue Administration's annual report, as are the numerical figures for both calculations. The propriety of using the TEV versus the EAV may be determined by the Court through review of the facts and definitions contained in the annual report which the petitioners trust would be admissible through stipulation.
3.
Whether the additional 9.75%
discount from
the per pupil cost of adequacy has any sufficient
basis.
HB 117 provides $825 million to pay for the portion of education that the State is constitutionally required to provide. Any shortfall in the amount of funding provided for education must be made up by the local districts that must rely upon greatly varying fiscal capacities to supplement the state funds. Much of the work done to arrive at the $825 million figure was based upon an analysis completed by an Adequacy Commission whose members were appointed by the New Hampshire House and Senate and the Governor. Two consultants, Professors John Augenblick and John Meyers assisted the work of the Commission. The Commission's report is appended to petitioners' contemporaneously submitted Memorandum of Law in Support of Motion for Sanctions.
The Commission adopted a single determinant of educational adequacy and worked downward from that single factor to determine the cost of a constitutionally adequate education. The Commission chose to focus entirely upon the New Hampshire Educational Assessment Tests administered to New Hampshire's third, sixth and tenth grade students pursuant to R.S.A. 193-C. The tests provide scores in increasing order of achievement of Novice, Basic, Proficient and Advanced. See HB 117 section 41, amendments to R.S.A. 198:40(b).
The Commission further limited its focus to those school districts that scored in the quintile in which 40-60% of the students scored basic or above on the assessment test. This quintile obviously includes some districts in which the majority of students have scored in the lowest achieving category of Novice. The Commission then averaged the cost per pupil from only the lower spending half of the districts in the quintile.
The reliance on a single outcome factor, the choice of districts and the use of the lower spending districts in the quintile are decisions that petitioners will challenge in the second phase of the proposed litigation concerning remedy, because all of these decisions are subject to expert proof and require factual development. The majority of the HB 117 funding scheme would remain in place throughout the litigation of the first and second phases.
Moreover, the petitioners contend that the State should be held to its findings until those findings are invalidated. The State has found that 40 to 60 percent of students in a school district must score basic or above on all of the assessment tests to for the district to be providing an adequate education. Therefore, schools and districts that do not meet this criterion, by the State's definition, do not provide an adequate education.
HB 117 did not stop in the effort to artificially reduce the State's share of the cost of public education at the level described above. After identifying the lower-spending half of the quintile, the spending plan then arbitrarily reduced the per student cost by another 9.75 percent. It is this last reduction that petitioners believe is subject to challenge in the first stage of the proposed litigation based upon undisputed facts in the legislative record.
In Claremont II, this Court held that the right to an adequate education is a fundamental right. 142 N.H. at 473. [W]hen an individual school or school district offers something less than educational adequacy, the governmental action or lack of action that is the root cause of the disparity will be examined by a standard of strict judicial scrutiny. 142 N.H. at 474.
In this case, the State does not have a compelling interest to justify the 9.75 percent reduction. Rather, the legislative history clearly demonstrates that the discount is arbitrary and based solely upon political negotiation, personal guesses and a desire by certain legislators to keep the State's monetary obligation to fund an adequate education under a predetermined amount, without regard for the educational needs of the children of this state or an actual definition of adequacy.
The 9.75 percent reduction started as a 25 percent reduction recommended by Representative Neal Kurk, the Chairman of the House Finance Committee, and three other members of the nine member Adequacy Commission established under RSA 267:1. The Adequacy Commission's December 17, 1998 Final Report states that The commission estimates that 25% of this [average base expenditure per pupil] cost is not required to provide the curriculum programs and services essential for an adequate education. This adequacy adjustment percentage reflects administrative, curricular, extra-curricular and other costs incorporated in the available data. Report at 5.
Four members of the Adequacy Commission did not vote for the 25 percent reduction and instead supported a 10 percent discount proposed by Judy Reardon, the Governor's counsel and a member of the Adequacy Commission. One member, Senator Ned Gordon, filed a dissenting report and apparently did not vote for either reduction. HB 117 subsequently adopted a reduction of 9.75 percent, an amount very similar to the 10 percent Ms. Reardon proposed.
The
recommendations in the Adequacy Commission's December 17, 1998 Final
Report, including the 25 percent reduction, were incorporated into HB
125. Many
of the provisions of HB 125 were later incorporated into the final
version of
HB 117.
The Governor's counsel, Ms. Reardon, offered testimony during the House's consideration of HB 125. Ms. Reardon's testimony provides the Court with some insight into the analysis of the 10 percent discount she proposed, its rationale and basis and is binding against a party, the Governor. The 10 percent discount is the third level of manipulation of the sample data after the selection of the quintile and the use of the lower spending districts in the quintile and was referred to as the third step in Ms. Reardon's testimony before the House Education Committee on HB 125 on January 26, 1999. Neil Kurk, the chair of the House Education Committee and a member of the Adequacy Commission with Ms. Reardon, had proposed a 25% discount. Ms. Reardon, in her testimony, discussed Mr. Kurk's proposal and her own proposal of 10%.
Judy Reardon: The Governor does take issue with the third step in the methodology being advocated by Rep. Kurk. When you look at the school districts that are in the sample that is created by using the first two steps in that methodology, there is simply no reasonable basis for contending that 25 percent of what those districts spent or are expending is being expended on things that are above and beyond the cost of adequacy.
Testimony before the Education Committee on HB 125, January 26, 1999, at 71.
Ms. Reardon was also asked in the hearing why she proposed a 10% reduction. She
replied:
Ms. Reardon: This is what went into it, is that we were reaching a point in the commission where we had to finish up our work. I knew what Rep. Kurk was going to put on the table, and I wanted to try to see if there was a way of reaching a consensus among the nine commission members and put something on the table that I thought had a chance of getting all nine members to vote for it. So, it was nothing more than that, Rep. MacGillivray. It was not based on some analysis that I had done, that ten percent was supportable, it was an attempt to try to have the commission reach consensus.
Id. at 74. Ms. Reardon also was supporting a 10 % reduction from a sample that was
larger than that ultimately chosen by the Commission. Id. at 73.
Manipulation of the discount factor, the third step, allows the State to manipulate the total cost of an adequate education. The conferees on HB 117 had reached agreement that the State could accept a cost of $825 million and the discount factor was manipulated to produce that figure. Although the preamble to HB 117 provides that the cost of an education calculated from performance based outcome criteria includes costs that are not required to provide the curriculum, programs, and services essential for a constitutionally adequate education, HB 117 at section 1V, in fact, no effort was made to examine the non-essential costs in the districts ultimately chosen to be in the sample upon which the calculations were based. As indicated by Ms. Reardon, no analysis was done by the experts and they did not provide a rational for the third step adjustment. Ms. Reardon, who suggested the 10 percent discount in the first place, testified that she had only done so to reach consensus and that under the circumstances, the discount is indefensible.
Representative Peter Burling, another member of the Adequacy Commission and the House Minority Leader, also testified about the reduction and the State's expert's reluctance to support it. He stated:
It is not supported by the people whom we paid $50,000 to provide us a methodology and a report. There are no data on which we can, as a legislature or as citizens, make a generic and general decision that 25 percent of budgetary costs are attributable to non-adequacy related items. That is a proposition which Messers. Augenblick and Myers have communicated. They communicated it to the commission and they communicated it to me this morning at 10:15, when I called to ask them their opinion on the subject.
This was the argument, of course which Augenblick and Meyers pointed out to the commission when they e-mailed the chair of the commission and said, you understand that having chosen the universe of schools which perform at a give rate, there's no way for you to determine that French IV in any specific school or Math Club in any specific school is not the function which causes a performance to rise to the level you want to choose. Not only do you have an absence of data, you're whole integrated methodology fails if you do that.
Testimony of Peter Burling before the House Education Committee on January 6, 1999 at 65-66.
Two other circumstances serve to establish that the discount is arbitrary and indefensible. First, the statement of intent included in the statute refers to costs unrelated to adequacy that may properly be excluded from the per pupil costs. While petitioners do not concede that any of the process used by the State is defensible, the use of the third step discount here was not based on any apparent consideration of actual school costs. The magnitude of the discount has nothing to do with any data that is currently available. For example, one might properly exclude the costs of adult education from the State's responsibility to fund an adequate education, as adults do not ordinarily attend public elementary and secondary school. The cost of adult education for the 1996-97 school year, however, was an average of $16 of the average per pupil expenditure of $7,600 or 0.21%, not the 10 % figure used for the discount. New Hampshire Department of Employment Security, Vital Signs, a Labor Market Information Report, at 8, January 1999.
Second, the passage of the trailer bill, HB 300, is further evidence that the Governor and Legislature were interested in finding acceptable cost figures, not in defining adequacy and then paying for its costs. Rep. MacGillivray explained the reason for the trailer bill in the House Calendar as follows:
The numbers for state aid in spreadsheets available when HB 117 was agreed to by conferees, adopted by the House and Senate, and signed into law do not conform with the language of HB 117. The conferees have stated that they had agreed to the spreadsheet numbers and that the words [of HB 117] should be amended to conform to the data.
House Calendar May 25, 1999. House Speaker Sytek and House Democratic Minority
Leader Burling made public comments soon after the discrepancy was noticed that fully supports petitioners' analysis. In this regard, the Concord Monitor wrote:
House Speaker Donna Sytek and House Democratic Leader Peter Burling said yesterday they stand by the $825 million negotiated with the Senate. Sytek said the new formula will be modified to ensure only that amount is distributed.
If the goal is to make possible what we agreed to, there are ways to do that, said Sytek, a Salem Republican.
I think we came out at $825 million and that's where I'm going to stand, said Burling of Cornish.
Concord Monitor, $18 million school funding snafu found, May 19, 1999 at B-1,
attached as Exhibit 3.[4]
Ms. Reardon is correct. The third step, the 0% discount is indefensible. It is intellectually dishonest to pre-select an approved spending amount and then to shoehorn a formula into the preset amount. The State had a duty to fund a constitutionally adequate education. Rather than meet its duty, the State played politics and, in doing so, shifted its funding burden to the local districts. This Court, on the basis, of the undisputed and undisputable facts, should find and rule that the portions of HB 117 that impose the third step discount are unconstitutional and sever these sections from the remainder of the statute.
4.
Whether
the State may constitutionally discount the cost of transportation
without any
analysis or basis for doing so.
5.
Whether
the State may exclude all funds for capital costs from its calculation
of
adequacy.
HB 117 does not provide any money to the school districts of New Hampshire to pay for capital costs for school building and renovation. Section 41, R.S.A. 198:40 I (a). For the 1996-97 school year the cost per pupil for construction in New Hampshire was $589 and the cost of debt was $350 per pupil. Vital Signs at 8. Thus, the statewide cost for both expenses was approximately $200 million. Per pupil construction costs had increased by $148 from the prior year while debt decreased by $12 per student.
School boards are required to provide standard schools for at least 180 days in each year, at such places in the district as will best serve the interests of education and give to all the pupils within the district as nearly equal advantages as are practicable. R.S.A. 189:1. A standard school is one maintained for at least 180 days in each year, in a suitable and sanitary building, equipped with approved furniture, books. R.S.A. 189:24 (emphasis supplied). Presumably, as the State has required districts to maintain suitable and sanitary buildings, such buildings must be integral to the educational process. If buildings are integral to the provision of educational services, the costs of the buildings would appear to be a part of the cost of providing a constitutionally adequate education.
The State appears to concur with this analysis in theory. In the final report of the Adequacy Commission, the Commission wrote:
Capital costs for buildings and other facilities necessary for an adequate education are unknown at this time and, hence, not included in this report. A separate statutory study of these issues, under the auspices of the New Hampshire Department of Education shall commence by July 1, 1999, with funding requested in the Department's current budget request, and its report will not be available until September 1, 2000.
Report at 3.
Thus,
the cost
for buildings was excluded.
It appears
that if the costs were available, the Commission, at least, would have
included
some percentage of the costs in its calculations. On information and belief, the cost study of buildings
has not
been funded.
Additionally, the charge given to the commission formed under HB 117 underscores the State's acceptance of the cost of buildings as a cost of adequacy. HB 117 at section 41 created the Adequate Education and Education Finance Commission as an amendment to R.S.A. 198:49. The charge of the Commission is to ensure that all students are provided an adequate education. R.S.A. 198:49 IV. Part of this charge requires the Commission to [r]ecommend the amount of state aid, including building aid, to be distributed to the cities and towns based upon the cost of an adequate education. R.S.A. 198:49 IV (b). The inclusion of building aid in the Commission's charge is, at the very least, an admission that buildings are a component of an adequate education.
Petitioners do not ask the Court, in the first instance, to decide the cost of school buildings or a methodology for determining that cost. Instead, the petitioners simply request the Court to rule that the costs of buildings must be borne by the State, in some measure, as a part of the cost of adequacy. This, it would seem, is purely a legal question that may be briefed by the parties and decided by the Court without necessity of factual development. Of course, petitioners reserve the right to challenge the State's cost methodology, when one is decided, if the methodology is unconstitutional.
6. Whether the State acted in
good faith
when it delayed its full implementation of its responsibility to provide
and
fund constitutional adequacy until September 2004.
HB 117 creates two commissions. The first, which was referenced above, is the Adequate Education and Education Financing Commission. The Adequate Education and Education Financing Commission is to submit its report of findings and recommendations by December 1, 2000. R.S.A. 198:49 V. The report is to include proposed implementation schedules with timelines, specific steps, agencies and persons responsible, and resources needed. Id. The recommendations and plans shall be designed to be fully implemented no later than September 1, 2004. Id.
The second commission created by HB 117 is the Tax Equity and Efficiency Commission. This commission is to study issues relating to tax fairness, proportionality, efficiency and complexity for funding public education, and to examine all taxes currently imposed on the citizens of New Hampshire to fund public education. HB 117, section 55. The reports of the Tax Equity Commission are due December 31, 1999 and March 31, 2000. Section 55 VII.[5]
The dates selected by the Governor and Legislature for the implementation of adequacy and a new constitutional funding system conflict with this Court's order in Claremont II and its order denying the State's request for an extension. 143 N.H. 154. Further, to the extent that schools in the state are currently failing to provide their students with a constitutionally adequate education=97as determined by the State's own standard=97it is unconscionable to require those constitutionally disadvantaged students to wait another five years for relief.
HB 117 directs the Department of Education to select all school districts in which 40 to 60 percent of the elementary pupils enrolled in the grades tested on the day testing began, who achieved a scaled score, in the statewide educational improvement and assessment program administered pursuant to R.S.A. 193-C, in all areas tested, equivalent to performance at the basic level or above. R.S.A. 198:40 I (b)(1). This direction is consistent with the General Court's finding that students who score in the basic, proficient, and advanced levels on these state [assessment] tests are making progress toward achieving the goals set forth in R.S.A. 193-E [which purportedly defines an adequate education.]. HB 117 section 1 IV. A fortiori, districts that fail to achieve the requisite 40 to 60 percent are not making progress toward adequacy. Further, when the proper standard of review is used, the review of activities on a per school, not per district basis, the failing schools are readily identified. See Claremont II, 142 N.H. at 474 ( But when an individual school or school district offers something less than educational adequacy, the governmental action or lack of action that is the root cause of the disparity will be examined by a standard of strict judicial scrutiny. ). Most of the schools in the five petitioner districts fail to meet the 40 to 60% standard on all tests. Thus, these schools fail even the State's modest test of adequacy. Under the statute at issue, the students in these schools need not receive relief for five years. Conceivably, many of the students in the petitioner districts will complete their entire high school experience in sub-standard, inadequate schools unless the decisions of the Court encourage the State to act with more deliberate speed.
B.
Matters
Triable to a Master
1.
What
is a full constitutional definition of an adequate education and what is
its
cost?
Since December 30, 1993, the State has had a responsibility to honestly define a
constitutionally adequate education that would prepare citizens for their role as participants and as potential competitors in today's marketplace of ideas. Claremont I. 138 N.H. at 192 (citation omitted). This Court has shown proper deference to the legislative process, but the constitutional mandate has been clear. In 1993, the Court wrote: We are confident that the legislature and the Governor will fulfill their responsibility with respect to defining the specifics of, and the appropriate means to provide through public education, the knowledge and learning essential to the preservation of a free government. 138 N.H. at 193.
On December 17, 1997, the Court wrote: We are confident that the legislature and the Governor will act expeditiously to fulfill the State's duty to provide for a constitutionally adequate public education and to guarantee adequate funding in a manner that does not violate the State Constitution. Claremont II, 142 N.H. at 477 (citation to Claremont I omitted).
When the State asked for a two-year extension in November 1998, the Court wrote:
Absent extraordinary circumstances, delay in achieving a constitutional system is inexcusable. The legality of the education funding system in this State has been questioned for at least the past twenty-seven years, and the parties involved in the present action have been engaged in litigation for over seven years. The controlling legal principles are plain. The command of Part II, Article 83 is that the State bears the duty to provide a constitutionally adequate education to every educable child in the State and to guarantee adequate funding. See Claremont I, 138 N.H. at 184, 635 A.2d at 1376. The command of Part II, Article 5 is that taxes be proportional and reasonable, thereby forbidding varying property tax rates across the State to support the public duty to provide education. See Claremont II, 142 N.H. at 471, 703 A.2d at 1357. [I]t should go without saying that the vitality of these constitutional principles cannot be allowed to yield simply because of disagreement with them. Brown v. Board of Education, 349 U.S. 294, 300 (1955). The constitutional rights of children in this State to an adequate State-funded education and of all taxpaying citizens in New Hampshire to reasonable and proportional taxation are not to be denied any longer. Based on the record and pleadings before us, the motion for extension of deadlines is denied.
143 N.H. at 158.
It has been the State's responsibility to define and pay for a constitutionally adequate education since 1993. The State has not done so. It is now time for the Court to allow the parties to define adequacy in the context of a formal legal proceeding. If the State is unable or unwilling to fully define adequacy in that proceeding, traditional notions of default should be imposed. If the parties suggest contrasting approaches, the Court should choose between them. The children and taxpayers in the petitioner districts deserve no less and can wait no longer. [T]ime is now of the essence. 143 N.H. at 160.
Petitioners have proposed that the Court decide those matters that may be decided
on the face of the new statute or based upon the facts that will not likely be contested. These rulings will likely provide the parties with guidance necessary to craft an enduring definition of constitutional adequacy. If, however, the parties continue to be unable to formally meet and agree to a definition, the first stage of proposed remedies litigation will also permit the parties to engage in subsequent fact finding before a master that will result in the compilation of a factual record replete with expert opinions upon which this Court may fully and in detail describe an adequate education, a system of accountability, and the cost thereof that must be borne by the State.
Scott F. Johnson, Esq.
Stein, Volinsky & Callaghan, P.A.
One Barberry Lane
P.O. Box 2159
Concord, NH 03302-2159
(603) 228-1109
Certificate of Service
Andru H. Volinsky, Esq.