Dover’s Education Funding Lawsuit All Bark and No Bite

As I promised in this post, I will show below why the education funding law being challenged by Dover is “constitutional.”  First, some context and an explanation why I put constitutional in quotes.

The context:

CONCORD, N.H. (AP) — Facing a school funding lawsuit, the attorney general’s office said Monday it will not defend the law that caps how much state money growing school districts can receive each year.

The city of Dover sued the state earlier this year, asking the courts to overturn the funding cap and seeking about $14 million in back payments. New Hampshire pays school districts $3,450 per student, but the law says no district can get more than 108 percent of what it received the year before. Dover, a growing school district, said the cap means it’s not getting all of the money it’s owed per student.

Assistant Attorney General Anne Edwards said the office doesn’t believe it’s constitutional for the state to give districts less than lawmakers have determined it takes to provide an adequate education.

The reason that I put constitutional in quotes is that what I will show is that the law complies with the constitution as interpreted by the New Hampshire Supreme Court in the Claremont/Londonderry decisions.

The Claremont/Londonderry decisions, however, do not correctly interpret the New Hampshire Constitution.  Indeed, these decisions willfully misinterpret the decisions.  You can read two law review article I wrote showing that here and here.

But for the purposes of this post, the term “constitutional” will denote compliance with the Claremont/Londonderry decisions.

One final preliminary note, this post is not going to read like a legal brief.  Rather, I will just jot down my thoughts as I read through Dover’s lawsuit, which can be found here.

The first problem Dover has is that it has no “standing” to bring this lawsuit.  The first paragraph of the lawsuit:

Dover.Lawsuit.Paragraph.1

In order to have standing, Dover must have suffered a personal harm as a result of the alleged violation of its “rights.”  From the Supreme Court’s Baer vs. New Hampshire Department of Education decision:

The petitioners’ only basis for standing in this case is their taxpayer status. They have not alleged that they have any personal rights that are impaired or prejudiced by the waiver rules. See id. They have asserted no interest other than one shared by all Concord taxpayers, which is insufficient to maintain standing in a declaratory judgment action. … 

The petitioners appear to contend that Claremont creates an exception to the requirements of RSA 491:22 and confers standing to any person alleging violations of the constitutionally guaranteed right to an adequate education. Claremont states: “The right to an adequate education mandated by the constitution is not based on the exclusive needs of a particular individual, but rather is a right held by the public to enforce the State’s duty. Any citizen has standing to enforce this right.” Claremont, 138 N.H. at 192 (citing Fogg v. Board of Education, 76 N.H. 296 (1912)). Claremont did not create an exception to the statutory requirements of RSA 491:22. The petitioners must still allege a present legal or equitable right, which they have failed to do here.

The harm claimed by the City is that it has received less funding from the State than required by a statutory formula to determine the amount of funding required for an adequate education:

Dover.Lawsuit.Shortfall.From.Cap

There is no harm to Dover, however, because Dover is merely a conduit for the State funding.

Stated somewhat differently, Dover cannot claim it has been denied a state-funded constitutionally adequate education because municipalities do not have a right to a state-funded constitutionally adequate education.  From Londonderry I:

the State’s obligation to ensure and to fund each educable child’s opportunity to obtain a constitutionally adequate education as required by Part II, Article 83 of the New Hampshire Constitution.

Thus, it is only an “educable child” in Dover who would have standing to bring a lawsuit with respect to the cap.  Accordingly, the lawsuit should be dismissed because Dover lacks standing.

However, because the Court might allow Dover to amend its lawsuit and add plaintiffs who theoretically could have standing, I’ll consider whether the lawsuit would  be able to proceed if the lawsuit were amended to add an “educable child” or children as plaintiffs.  But first, I want to discuss another type of harm that Dover has implied it has suffered.

Dover also contends that (1) its taxpayers have been overtaxed because of the cap and (2) that the City has had to reduce other spending.

Dover.Lawsuit.Paragraph.5Dover.Lawsuit.Paragraph.7

As to the “overburdened” contention, Dover presumably is claiming that its municipal tax rate would have been lower had the cap not been in effect.  There are a number of problems with this claim.

First, to the extent that such a contention is sufficient to establish standing, the claim belongs to the taxpayer not to Dover.

Second, even if a taxpayer was added or substituted a plaintiff, the contention is not sufficient to establish standing because it is totally speculative  whether Dover would have imposed a lower municipal tax rate from 2010 to 2015 and whether Dover would use any of the funds it is seeking in this lawsuit to reimburse the “overburdened” taxpayers (note that Dover isn’t saying it would use the money it was allegedly underpaid to reimburse the taxpayers who were “overburdened.”  Rather, Dover wants the money with no strings attached.)

As the Supreme Court recently said in Duncan vs. State, which involved taxpayer-plaintiffs:

In assessing whether the petitioners have established standing, we find DaimlerChrysler Corp. v. Cuno, 547 U.S. 332 (2006), and Watson, 44 A.3d 130, instructive. Cuno involved a challenge by Ohio taxpayers to tax benefits awarded by the city of Toledo to DaimlerChrysler Corporation (DaimlerChrysler) in exchange for DaimlerChrysler’s agreement to expand its jeep assembly plant already located in the city. Cuno, 547 U.S. at 338-39. The plaintiffs claimed that they were injured by the tax benefits afforded to DaimlerChrysler because the benefits “deplet[ed]” state funds, “diminish[ed] the total funds available for lawful uses and impos[ed] disproportionate burdens” on the plaintiffs. Id. at 343 (quotations omitted). The United States Supreme Court determined that the plaintiffs lacked standing because their claimed injury was not “concrete and particularized,” but was instead “a grievance the taxpayer[s] suffer[ed] in some indefinite way in common with people generally,” and because the injury was “conjectural and hypothetical.” Id. at 344 (quotations omitted). The Court explained that the alleged injury was “conjectural and hypothetical,” in part, because “it is unclear that tax breaks of the sort at issue here do in fact deplete the treasury: The very point of the tax benefits is to spur economic activity, which in turn increases government revenues.” Id. Further, the Court observed, whether the plaintiffs would suffer an injury “depends on how legislators respond to a reduction in revenue, if that is the consequence of the [benefits].” Id. To establish their injury, “requires speculating that elected officials will increase a taxpayer-plaintiff’s tax bill to make up a deficit; establishing redressability requires speculating that abolishing the challenged credit will redound to the benefit of the taxpayer because legislators will pass along the supposed increased revenue in the form of tax reductions.” Id. The Court held that “[n]either sort of speculation suffices to support standing.” Id.

Dover’s contention that it had to curtail other spending as a result of the cap (which, as a parenthetical note, contradicts its claim that its taxpayers were overburdened) is similarly too speculative to support spending.  To establish injury requires speculation that the elected officials in Dover would have imposed the same municipal tax burden notwithstanding the millions in State funding.

So now let’s assume that an “educable child” is substituted as a plaintiff.  On problem is that the lawsuit doesn’t allege that the amount of State funding was not sufficient to provide a constitutionally adequate education.  That is, the lawsuit doesn’t allege that the “educable child’s” right to a State-funded constitutionally adequate education was impaired.

But it’s undisputed that the State didn’t provide the amount of funding required by its own formula, so it’ undisputed that the children of Dover didn’t receive a State-funded constitutionally adequate education, right?  Wrong.

The constitutional question is not whether the State is following its formula.  The constitutional question is whether the amount of State-funding under the cap is sufficient to provide a constitutionally adequate education.  As I noted in a previous post:

Nothing in the Claremont/Londonderry line of decisions says that the Legislature and Governor cannot modify the statutory definition of an adequate education and how the cost of an adequate education is determined as often as they please. So the fact that State government made adjustments to its education funding formula is not a basis to sue the State.

With respect to the adjustments that has Windham dyspeptic, there is nothing unconstitutional under the Claremont/Londonderry decisions about the State not using a rigid per pupil funding formula, but instead tweaking a per pupil formula to reflect the indisputable fact that increasing class size from twenty to twenty-five doesn’t require increasing a teacher’s salary by the cost of adequacy times five, in order to educate the additional five students.

So, the absence of any claim in the lawsuit that the amount of State-funding was actually inadequate to provide an adequate education (as opposed to simply being less than what was required by a statutory formula before modification by the cap legislation) means that  adding an “educable child” as a plaintiff would not solve the standing problem.  The “educable child” would not have standing either

Additionally, adding an “educable child” as plaintiff presents the mirror image of the “overburdened” taxpayer claim in terms of the claim not being redressable by the Court.  As I noted in another previous post:

Let’s assume for the sake of argument that the students in Dover didn’t receive an adequate education from 2009 to 2015 because of this alleged underfunding. How does paying the City of Dover $14 million undo that? It obviously doesn’t.

For this independently sufficient reason as well, adding an “educable child” as a plaintiff would not solve the standing problem.

In sum, Dover’s lawsuit is totally meritless.

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