Two important and related school finance decisions in N.H. yesterday

 In New Hampshire, which, according to the U.S. Census Bureau is the state that contributes the smallest percentage of local education revenue to local public schools by the most recent data, there were two related school finance decisions handed down yesterday. 

In one ruling, Ruoff found that the current $4,100 base adequacy rate – the minimum amount of money the state sends to public schools for each student – is not enough to meet the state’s constitutional requirement to provide an adequate education.

The state instead should send no less than $7,356 to each student in order to meet its adequacy requirements, Ruoff ruled.

In a second ruling, Ruoff found that the statewide education property tax (SWEPT) is unconstitutional. That tax is collected by towns – not the state – at a set rate in order to provide funding for each town’s school district. But Ruoff held that the state’s 2011 decision to allow wealthier towns to retain any excess SWEPT they collect is unconstitutional and that the money should be distributed to poorer towns. Ruoff’s order Monday enjoined the state from allowing towns to retain that excess SWEPT in the upcoming tax season this winter and spring.

Per the Boston Globe:  

Ruoff said he intentionally released the two orders together because he wanted the parties to be able to consider how a higher state contribution will impact the taxation scheme used to raise some of that money.

SWEPT is raised locally and kept locally. In most places, those funds don’t cover the full cost of education, so there’s also an additional local tax. But if a town raises more than they need through SWEPT, they get to keep the excess. That happens in about 17 percent of communities, according to Reaching Higher, a nonprofit education think tank based in Concord.

Ruoff said communities that raise more than they need can no longer keep the excess, starting with the next budget cycle. Those funds instead have to go to the state and “must be used for the exclusive purpose of satisfying the State’s adequacy aid obligations,” he said.