Almost everyone in New Hampshire knows about The Claremont Decisions. The courts decided they were legislators and could determine what adequate school funding was about. More recently, they’ve been at it again. The ConVal ruling (Contoocook Valley School District v. State of New Hampshire) tells the legislature to amp up school funding despite the absence of any connection between money and learning (unless learning means how to launder money through a government institution that can’t teach kids to read or do math). I think the legislature should tell the courts to go to hell. What will they do when the legislature can vacate the Judiciary, not that I have the votes?
Speaking of fantasies, the schoolies can’t wipe the drool off their chins fast enough (meaning they can’t wait to get their hands on more of your money free from improvement requirements, and if the Democrats get control of the legislature and governor’s office, they will create a broad-based taxing structure and a bureaucracy to collect it. Local control of education will die (alongside New Hampshire’s unique low-total-tax-burden exceptionalism). Additional broad-based taxes will follow. And this all turns on voters showing up to keep them out of power and the courts – God help us – to see reason.
In pursuit of the latter, the American Institute for Economic Research has entered this mess, filing Amicus Briefs on the combined cases (ConVal and Rand).
AIER has submitted amicus curiae briefs to the New Hampshire Supreme Court in the combined cases Rand v. State and ConVal v. State. We took this step because our economic research is directly relevant to the issues raised in these cases.
In Rand, the trial court ruled that New Hampshire’s property tax system was unconstitutional and ordered the State to start redistributing property tax revenue from towns with high property valuations to the rest of the state.
In ConVal, the trial court ruled that New Hampshire’s “adequacy aid” to local school districts was insufficient and ordered a near-doubling of state funding for local schools.
Our briefs support the State’s position that the N.H. Supreme Court should overrule the trial court and find New Hampshire’s property tax and school finance systems constitutional.
More from that piece is here, and below is their press release.
August 14, 2024
(Great Barrington, Massachusetts) – Today, the American Institute for Economic Research (AIER) filed amicus curiae briefs in the New Hampshire Supreme Court on the cases Contoocook Valley School District v. State of New Hampshire (“ConVal”) and Steven Rand v. State of New Hampshire (“Rand”). The briefs in the combined cases ask the New Hampshire Supreme Court to overrule the Superior Court and find New Hampshire’s school finance and property tax system constitutional. AIER’s economic research shows that New Hampshire’s decentralized, competitive system of school finance benefits school quality and provides valuable choice to families across the income spectrum. The “recapture” scheme ordered by the Superior Court would restore “donor” and “recipient” towns, destroy property wealth, and create perverse incentives for towns to engage in exclusionary zoning.
As part of AIER’s nonprofit mission, we conduct research on fiscal federalism, school finance, and local land-use regulation in the United States. We have found that decentralized systems of public finance provide Americans with more choice of government services and tax levels and give governments incentives to be more efficient and compete for residents.
In the Rand case, the trial court ordered the state legislature to take “excess” property tax revenues raised by towns with high property valuations and redistribute them to the rest of the state through the state education adequacy fund. Economists have found that this kind of redistribution from property-wealthy to property-poor towns is more damaging and inefficient than other forms of taxation, because it immediately causes property values to fall in property-wealthy towns, while the towns getting the money put up zoning barriers to stop people from moving there to take advantage of their fiscal windfall.
AIER’s own research demonstrates that:
· property-wealthy towns don’t have wealthier households or fewer poor households than property-poor towns
· property-wealthy towns don’t necessarily have lower property tax burdens than property-poor towns
· nationwide, taxation schemes like the one ordered by the trial court encourage towns to remain property-poor, which they can do by limiting development.
The order would force poor families in Lebanon, N.H (a donor town with high child poverty) to subsidize wealthy families in Brookline, N.H. (a recipient town with high incomes and low child poverty).
In the ConVal case, the trial court ordered the state legislature to significantly increase its aid to school districts. AIER has found that a similar scheme in Vermont ultimately caused the state government to exercise significant control over local school budgets, even forcing most school districts to consolidate. State control of school finance could ultimately mean a loss of local control in education.
AIER scholars released the following statements:
“School finance litigation is a nationwide issue. Every state other than Utah and Hawaii has faced it,” said AIER Senior Research Fellow Jason Sorens. “Unfortunately, economic evidence and reasoning have been missing from the legal debate over the last 50-odd years. Understanding how taxes and school productivity affect property values and interact with zoning laws should help the N.H. Supreme Court make a better decision.”
“School finance equalization has been a big driver of new taxes and unnecessary government growth across the country,” said AIER President William Ruger. “AIER’s economic analysis shows that it has mostly been based on misconceptions about the alleged ‘inequity’ of locally funded education. With this case, we hope the Court will set a new precedent, based on sound economic reasoning, that vindicates local control of school funding and decentralized competition among governments.”
For more information, see the amicus briefs webpage here.
Thought? Comments?
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