LEBANON — Taxpayers in Lebanon are funding two efforts to shape how New Hampshire pays for its public schools, but it’s not clear whether those campaigns share the same goals.
The Lebanon School Board voted, 6-2, last week to join a lawsuit seeking to increase the amount of state aid allocated to Granite State students, joining a coalition of 16 school districts.
Many of those, including Claremont and Newport, are considered property-poor, with lower tax bases that struggle to keep local schools afloat.
Meanwhile, the Lebanon City Council is working alongside 27 communities to lobby against proposals to redistribute money from property-rich towns to those in need.
That group, called the Coalition Communities 2.0, includes wealthy towns such as New London and Newbury, N.H., that are popular vacation destinations and have a number of second homeowners.
So isn’t Lebanon — a city that’s seen a demographic shift from blue-collar workers and farmers to health care workers and academics — playing both sides?
“Basically, I think they’re in agreement, not opposition,” City Manager Shaun Mulholland said this week of the two school funding efforts.
Both the lawsuit and lobbying campaign recognize the same problem — New Hampshire is overly reliant on property taxes to fund schools — and seek solutions, he said in a phone interview.
For instance, the school districts suing argue that the statewide property tax isn’t enough to pay for an adequate education, and only amounted to a base payment of $3,600 per student in 2019.
In court documents, they said the real figure, including transportation and maintenance costs, amounted to about $18,900.
The Coalition Communities also acknowledge those challenges, Mulholland said, and believe that further reliance on the statewide property tax “is not the solution.”
Instead, much of the group’s membership leans toward supporting a broad-based tax, which the city manager says would be more equitable than simply charging homeowners by municipality.
Assistant Mayor Clifton Below offered a similar argument, calling the school district and city’s efforts “complementary.”
The image of the Coalition Communities as wealthy towns attempting to stave off tax increases at the expense of their less fortunate neighbors might have been true prior to 2011, when the donor town system — where excess money from property-rich communities was sent to poorer ones — was abolished, he said.
But the group is now made up of a mix of municipalities with diverse populations, said Below, a former Democratic state senator.
“The difficult reality is we fund education now with a broad-based tax, which is the education (property) tax,” he said. “It’s just disconnected from our ability to pay.”
The current tax structure means that families and seniors often face a disproportionately higher tax burden that sometimes becomes unbearable, said Below, who proposed an income tax while in the Legislature. During the COVID-19 pandemic, things appear to have worsened, he added, as remote workers from out of state flocked to rural communities, driving up home values and squeezing out the labor force already here, he said.
“I just think the bottom-line problem that the Coalition Communities is trying to address is that increasing use of the property tax” to fund government, Below said.
But it’s not certain that a victory in the ConVal lawsuit — named after the lead plaintiff, the Contoocook Valley Regional School District — would result in a more progressive tax system.
While New Hampshire’s courts have found flaws in the state’s school funding system, they’ve mostly left changes up to the Legislature. And Republicans, who now hold majorities in the House and Senate, have successfully campaigned against broad-based taxes for decades, as have some Democrats.
Lebanon School Board Chairman Dick Milius said that while he supports the main arguments put forth in the ConVal case, he’s worried that they’ll lead to more of the same. Lawmakers, he said, could just respond by placing a higher burden on the statewide property tax to cover shortfalls.
They also could follow the recommendations of a 181-page report released by lawmakers last year that called for a redistribution of the statewide property tax, essentially bringing back the donor town system.
Milius, who voted against joining the ConVal lawsuit, said he’s not necessarily concerned about the legal action, which he called the first step toward solving New Hampshire’s education funding woes.
“I’m just concerned about what happens in steps two and three,” he said.
The threat of Lebanon’s dollars going to other communities resulted in Lebanon joining the Coalition Communities, which are made up of potential donor communities.
Using calculations from the education funding report, state Rep. Susan Almy, D-Lebanon, determined earlier this year that returning to donor towns could increase the city’s property taxes by $1.09 per $1,000 of a home’s assessed value. That amounts to an additional $273 for a property assessed at $250,000.
Other officials say the Legislature should at least explore the donor town system, given the urgent need of some school districts. Lebanon City Councilor Devin Wilkie was one of more than 20 municipal officials from across the state who co-signed a letter earlier this month requesting lawmakers include the funding model in New Hampshire’s next budget.
“I don’t think we should omit reviewing the recommendations from last year,” Wilkie said, adding that any solution will require some additional taxes for some people.
“It’s important that we take a holistic approach to this in that we are examining what we are doing for the broader New Hampshire, national and global community rather than just the effect it has on one municipality’s property tax,” he said.
For the time being, neither angle of attack is likely to be resolved soon.
Mulholland, who attends Coalition meetings monthly, said it’s largely preparing to respond to potential bills that could be filed next year.
Meanwhile, attorneys in the ConVal case say a trial isn’t expected to start until the fall. It’s also likely any decision the Superior Court makes will be appealed to the Supreme Court.
Tim Camerato can be reached at tcamerato@vnews.com or 603-727-3223.