When Jessica Wheeler Russell and her husband Adam Russell moved to Penacook in 2017, the local school system was one of their primary considerations. Their two sons, aged one and three at the time, would soon be school-aged.
Wheeler Russell grew up with a cooperative school district in the Upper Valley and liked the idea of towns coming together to share the responsibility of educating students.
The couple got involved with the community quickly. Wheeler Russell sits on the Merrimack Valley School Board, cultivates a community garden and enjoys helping out with local events like the Memorial Day parade.
But as the years have passed, the Russells have become discouraged to see their education property taxes climb steadily as state contributions to education fluctuate. They pay their taxes through their mortgage and feel the financial impact monthly.
“As a homeowner, it’s really tough to watch your bill climb,” Wheeler Russell said. “Things aren’t getting any cheaper. And seeing that some of the communities surrounding you who have more property value have less of a strain on their community as we do.”
The Russells paid $8,024 in property taxes in 2021 for their three-bedroom colonial which is valued at $286,900. Of that amount, $4,400 was for local school taxes and $447 was for the Statewide Education Property Tax (SWEPT). Like other Penacook residents, the Russells pay their education taxes to Concord, and the city transfers the revenues to the Merrimack Valley School District to pay for public elementary, middle school and high school education.
This week, the Russells filed a new school funding fairness lawsuit in Grafton Superior Court against the state of New Hampshire, with co-plaintiffs Robert Gabrielli, a retired physician who owns commercial property in Penacook, and Steve Rand who owns Rand’s Hardware in Plymouth. The suit argues that the state of New Hampshire relies too much on local taxpayers to provide the funding necessary to give students an adequate education, and as a result the funding for school districts is paid for by taxes that are not proportional across towns.
The Russells say that living in Penacook, gives their family a “double disadvantage,” faring worse financially than the state’s average for per-pupil valuation, but also faring worse than their neighbors five houses down the street who are part of the City of Concord and pay lower education taxes.
“It’s really difficult to listen to your neighbors talk about how they might have to leave their house because they can’t afford it anymore,” Wheeler Russell said. “Your community is breaking apart at the seams because of this. Sometimes it’s really hard to watch.”
The lawsuit filed this week hinges on 1997 rulings issued for the Claremont school funding lawsuit, where the New Hampshire Supreme Court held that state property taxes for education must be “administered in a manner that is equal in valuation and uniform in rate throughout the state.”
The plaintiffs in the case are represented by lawyers Andru Volinsky and John Tobin, who were on the legal team for the Claremont lawsuit in the 1990s and lawyer Natalie Laflamme and the New Jersey-based Education Law Center.
“The uneven funding of education in New Hampshire affects the ability of poorer districts to provide for the varying needs of their students,” Tobin said. “As the Supreme Court noted long ago, absent public education, students cannot become ‘competitors in the marketplace of ideas.’ This hurts students and hurts taxpayers and businesses in most communities across our state.”
In New Hampshire, about 62% of funds for public education come from local revenue, while the state funds 31% and the federal government funds 7%. New Hampshire property owners are charged for both local education property taxes and state taxes. New Hampshire provides the least state funding to public education of any state in the nation, according to a 2022 report by the National Education Association.
The debate around New Hampshire’s education funding system identifies two types of towns: “property rich” towns, with wealthy tax bases and high property values that can generously fund their public schools, and the “property-poor” towns that struggle to provide funding without disproportionately high taxes. The divide, which has perpetuated despite multiple state Supreme Court rulings, means property-rich towns tend to experience better facilities, higher teacher pay and often better educational outcomes, while the property-poor towns experience delayed facilities upgrades and high staff turnover.
New Hampshire’s school funding system was declared “inequitable from both student and taxpayer perspectives,” by the Commission to Study School Funding in a 2020 report. At the time, the commission – made up of state legislators, school administrators and education specialists – proposed redistributing the SWEPT so that excess taxes from wealthier towns are passed along to those with fewer resources, restoring a “donor town” system that had been eliminated in 2011.
Another school funding lawsuit, filed by ConVal, Mascenic, Monadnock and Winchester school districts in 2019, is still pending. That suit argues that the funding the state provides per pupil – which was around $3,636 in 2019 – isn’t enough, and doesn’t take into account the costs of transportation, teachers and facilities.
Wheeler Russell says she was five years old during the Claremont school funding lawsuit in 1993 – now her youngest son is five.
“My children are still facing this, decades later, because the state still hasn’t honored their obligations,” Wheeler Russell said.