New Hampshire Bar Association
About the Bar
For Members
For the Public
Legal Links
Publications
Newsroom
Online Store
Vendor Directory
NH Bar Foundation
Judicial Branch
NHMCLE

Providing innovative litigation support services in business valuation, financial analyses and forensic accounting to attorneys and clients alike throughout the New England.

Trust your transactions to the only payment solution recommended by over 50 bar associations.
New Hampshire Bar Association
Lawyer Referral Service Law Related Education NHBA CLE NHBA Insurance Agency

Member Login
username and password

Bar Journal - March 1, 2002

Claremont's Achilles' Heel: The Unrecognized Mandatory School - Tax Law of 1789

By:

As the Legislature must propose in the wake of the Claremont decisions,1 the Supreme Court continues to dispose, to leave New Hampshire with the company of more than a few states having a similar experience today.2 Yet there was a time when New Hampshire's General Court, on its own initiative, set the pace for enlightened change in public education.

The exact moment came on June 18, 1789, five years and sixteen days after New Hampshire received the minimalist charge from its newly adopted Constitution, "to cherish the interest of literature and the sciences."3 As part of an opening wave of federal-era legislation, every education statute out of New Hampshire's past was repealed; primary control of public education was vested in the state; and a state-mandated school-tax policy was enacted, effective in 1790, that served until 1919. In the process, New Hampshire's taxpayers became the first in the nation to be denied the freedom of raising only as much money for their schools as they felt inclined to spend. From 1790 to 1919, each New Hampshire town would be told precisely the least amount that would have to be, year by year.

New Hampshire's first public/common-school laws were written by Massachusetts in 1647 when the two colonies were temporarily conjoined, and they lasted in both places essentially unchanged until 1789.4 The State of Massachusetts passed its own school-reform legislation on June 25, 1789, one week after New Hampshire acted, but without giving up the essence of 1647: Massachusetts taxpayers were still permitted to do no more than "vote and raise such sums of money upon the polls and rateable estates . . . as they shall judge expedient."5 While towns of fewer than fifty families were still not required to school their children. It was New Hampshire that broke with the past, by disavowing the exclusive local control over school budgets which had proven so disastrous for the last 142 years,6 and by finally guaranteeing access to public education for every child. This was also a past that had long been under attack in New Hampshire, arguably with never more vehemence than in 1783 by Jeremy Belknap, New Hampshire's premier historian.7

Against such a background, the Law of 1789 cannot avoid being a window on how the State Constitution was interpreted by those closest to its framing, even by the framers themselves. Lasting for so long through its effect on school-tax revenue can only be a sign that that early interpretation was slow to change. Now abandoned for over 80 years, the legacy of 1789 seems also to have fallen into a black hole in the state's memory. Until little more than a year ago there was no evidence that any contemporary New Hampshire educator, historian, jurist, legislator, lawyer, or journalist knew of the law's existence, and today there is only scant evidence that any are aware of how it worked.8 Which means, ultimately, that the Supreme Court decision of 1993 -the more important of the two at the heart of the case-is unconnected to the history of these 130 defining years, and has gone unquestioned in relation to that history.

Implicit in all of this is the standing problem in constitutional interpretation, of updating original intent.9 The situation in New Hampshire is a textbook example of the challenge to that process. For here, traditional definitional openness-as in the State Constitution of 1784 -may never have been translated more quickly by those on the scene into a formula so numerically precise, that left no doubt about how the two principals in the original school-support equation-the taxpayers and the schoolchildren-were intended to fare. And as if to emphasize that control would now begin with the state, the Legislature of 1789 took its formula from the very statute that had been in force for paying the bills of the province since no later than 1693, and would continue in use for those of the new state until 1933.10 Coupled with 130 years of regularly published operational data and updates, original intent, as captured in the Law of 1789, can hardly be better defined or more readily discovered. Nor is it more elusive without the guidance of that law.

Perhaps the Court might have argued in 1993 that the ideas of 1789 didn't truly capture original intent, given the five-year delay that separated them from the Constitution's adoption. Or it might have taken the tack favored in a recent newspaper profile of Andru Volinsky, the lead attorney for the Claremont plaintiffs, that the "state had been wrong for centuries,"11 which, presumably, would deny constitutional shelter to anything that happened after 1784 (and excuse both profile-writer and Andru Volinsky for showing not the least awareness of 1789). But instead, the Court in Claremont I simply stood mute about all that evolved from the unrecognized Law of 1789. And in so doing, it made judicial motives even more suspect because the legislation from 1789 would have immediately handed the Court what it tried through Claremont I to tease out of an otherwise unyielding record: the state-mandated support for public education that it needed as the basis for Claremont II. There would be a critical difference, however. The Law of 1789 would have allowed no more than a formulaic taxpayer-friendly proportionality to each town's assessed valuation; it would never have given the Court the open-ended amount for the adequate education identified in Claremont I as the state's original funding goal in 1784, just five years before 1789. That the Court nevertheless undertook an examination of the "surrounding circumstances" at the time of the Constitution's adoption-and in that was not above using other parts of the post-1789 record for help in the argument it chose to follow-only stresses how decisively this pivotal law was avoided. How close the Court might have come to Claremont I had it honored the record is the imponderable.

As all played out after 1789, the Legislature, in its wisdom, decided on the sum of money that would serve the schools of the state, as a whole, for the year ahead. Set at about $16,500 (its pound equivalent) for 1790, this support-threshold was then increased in seventeen steps over intervals of from one to twenty-two years until it reached $750,000 in 1905 and grew no further. The underlying statewide tax base kept on growing, however, and accelerated suddenly after 1900,12 to end up at around 600 million dollars in 1919 for approximately a twentyfold increase from 1800.

In practice, each town's annual school-tax obligation was made the same share of the statewide threshold as its share of the state's tax base, with that proportion normally allowed to stand for four years. The local mandate was therefore fixed until reapportionment or the next higher step was taken in the aggregate obligation, whichever came first. Although local rates commonly and unavoidably varied a bit between times, the net result was virtually equivalent to a uniform state-controlled school-tax rate that was in decline-often very sharply-for perhaps 80% of its life. Along the "tread" in every threshold step, a rising, underlying valuation necessarily pulled the rate downward; between 1905 and 1919, in years of rampant inflation and no change in state-mandated revenue, it was more than halved as the collective tax-wealth more than doubled. Meanwhile, the school system in any town not expanding its tax base as rapidly as the state's, overall, was put at risk from loss of revenue whenever the rate fell; by the end of the nineteenth century many schools in that predicament were being devastated. In fewer places, where growth outdid the state's, spending became the challenge. Yet the handwriting had been on the wall for years, and as early as 1850 a remedy was attempted with a constitutional convention having something of a Claremont agenda but a completely different fate: none of the amendments passed.13

By 1850, the rising wealth of the state and the erratically growing annual education-support mandate had interacted to produce an effective school-tax rate of only a few pennies over $1.00 per $1000 of valuation, for about the lowest in New Hampshire history. This was also nearly where it came to rest when the era of 1789 closed in 1919 after a fleeting, roughly $3.50/$1000 all-time high in 1905. Adding to the tax pool was therefore on the convention's mind. Beyond that, as The Concord Daily Patriot saw the dilemma in 1850, essentially 10% of all towns were home to 20% of the state's schoolchildren while raising 30% of the mandatory school-tax revenue. Still, this was only the tip of the inequity iceberg; lost to sight in the averaging was the disparity in per capita support at both ends of the distribution by town, and another in how children compared among the school districts that fragmented every town between 1805 and 1885. In 1833 when the discovery is relatively easy to make, the end-to-end support-ratio from towns at the very extremes was around thirty to one. And that might have been compounded by at least another factor of ten at the district level. By the time of Claremont I, 160 years later in 1993, the intertown ratio was only about four to one, after a growth in the average per capita outlay from roughly $1.00 to more like $5000.00.14 Back in 1851, however, when the dust finally settled, the status quo was simply too taxpayer-friendly, and "the economic men who held that public education is one of the necessary functions of the state but not an all important one" won the day;15 seventy more years lay ahead for a practice that favored equity for the taxpayer over schoolchildren, and sweetened that equity with the equivalent of a perennially declining mandatory school-tax rate.

Important to emphasize is that myopia is not exclusively a failing of the Claremont advocates. Two recent arguments for nullifying the Claremont decisions build on the failure of the Constitutional Convention of 1850. Yet in both cases there is no awareness of the law that the convention's amendments were responding to, and each misses the support-disparity that so motivated the convention.16 To argue that the defeat of the proposed amendments preserved local control over school taxes, as it resisted pressure from the state to surrender that control, is plainly wrong; all the defeat really accomplished was to prevent further state regulation, beyond that already imposed since 1789. In effect, the Constitutional Convention of 1850 was the opening skirmish in a battle over school-tax reform that did not climax until the Court declared a winner in 1993.

The bottom line is that neither side in the Claremont controversy is served by the framers' intentions as spelled out so unequivocally in the Law of 1789. Thus, even if both were to drive themselves to understand exactly what this law says, neither would be rewarded for its efforts. The Law of 1789 makes clear that the state, in an act of early enlightenment, did accept responsibility for a threshold of funding for public education, using what amounted to a more or less uniform but free-floating mandatory school-tax rate for the purpose.17 It also makes equally clear that the prevailing view of state-mandated "adequacy" for all could not have been less relevant to the original intent of 1784. Today, the pronouncements of an activist, ahistorical Court are being challenged by convictions about local control that were abandoned by the legislature over 200 years ago. With myths before facts on both sides, the conflict hardly differs from a religious war, and is as likely to find lasting resolution. That it is being fought in the name of public education is the ultimate irony.

ENDNOTES

1. New Hampshire Reports: 138 (1993-1994), 183-193; 142 (1997-1998), 462-482.
2.

Equity and Adequacy in Education Finance: Issues and Perspectives, Helen F. Ladd, Rosemary Chalk, and Janet S. Hansen, Editors, National Academy Press, 1999: See Chapter 6, "Educational Adequacy and the Courts: The Promise and Problems of Moving to a New Paradigm", by Paul A. Minorini and Stephen D. Sugarman, p. 175. See also, Equity and Excellence in Education, Vol. 32, No. 3, Dec. 1999, especially Michael A. Rebell, "Fiscal Equity Litigation and the Democratic Imperative", p. 5, and Sue Brooks, "School Funding: Justice v. Equity", p. 53.

3. Law of 1789: "An Act for the better regulation of schools within this State; and for repealing the laws now in force respecting them," Laws of New Hampshire: Including Public and Private Acts and Resolves and the Royal Commissions and Instructions, with Historical and Descriptive Notes, and an Appendix, ed. Albert Stillman Batchellor, 10 vols., (Manchester, N. H. : J. B. Clarke, 1904-1922), Vol. 5, First Constitutional Period 1784-1792), 449-450. See also "The Constitution of the State of New Hampshire", Art. 83, Part 2. A more extended discussion of the Law of 1789 and its effect on public school funding in the taxpayer-oriented years of 1789-1919 can be found in a series of four essays in the Dartmouth College Library Bulletin: Nov 1993, 17-24; Nov 1998, 26-43; Nov 1999, 21-29; Apr 2000, 75-84; all by Walter A. Backofen. The formal end of the school-tax policy set in motion in 1789 came with "An act in amendment of the laws relating to the public schools and establishing a state board of education", effective 28 March 1919. (New Hampshire, Laws, Statutes, etc., Laws of the State of New Hampshire, 1919, Chap. 106, pp. 155-166).
4. Massachusetts, Records of the Governor and Company of the Massachusetts Bay in New England. Printed by order of the legislature, 5 vols., ed. Nathaniel B. Shurtleff, Boston: W. White, 1853-1854, 2:203.
5.

he General Laws of Massachusetts, from the Adoption of the Constitution to February, 1822, with the Constitution of the United States and of this Commonwealth, together with Their Respective Amendments, Prefixed, 2 vols. (Boston, Wells & Libby and Cummings & Hilliard, 1823-1832 ), 1:367.

6. Nothing better summarizes the problems of public education in New Hampshire when it shared the Massachusetts management practice than the commentary by Governor John Wentworth in 1771. [New Hampshire Provincial Papers, Vol. VII, p. 287). That matters only got worse is clear from Jeremy Belknap in 1783 (The Belknap Papers, Massachusetts Historical Society Collections, 5th series, Vol. 2, p. 287.)] Walter Herbert Small, "Early New England Schools", Arno Press & The New York Times, 1969, offers much anecdotal evidence.
7. Belknap, ibid.
8. An admittedly sweeping claim based on a close monitoring of the public literature- chiefly newspapers and other outlets for public debate-for the decade of the '90s over which the debate has been raging. Proof from the published, scholarly literature is simply its silence about the Law of 1789, which is rarely broken but then only by error in its interpretation. An intermediate source testifying to general unawareness is the 291-page, A New Hampshire History Curriculum for Grades K-12, commissioned by the New Hampshire Historical Society and recently released to critical acclaim under a copyright date of 1999; it is also mute about every other definitive statutory action on behalf of public education in New Hampshire before 1919. Significant, as well, is the fact that the New Hampshire Humanities Council which maintains a speakers bureau on an enormous range of subjects of potential interest to citizens of the state had no one on its roster as recently as a year ago prepared to address the history of New Hampshire's public school system.

Douglas E. Hall, writing as the Executive Director of the New Hampshire Center for Public Policy Studies, has been the only one in the post-Claremont era to cite the Law of 1789, doing that in an op-edit piece for the Concord Monitor of Nov. 23, 1999. But again, although understanding its peculiar structure, he did not identify the adverse tax-rate effect it had on most public school systems as a result of the distribution of municipal wealth then evolving in New Hampshire.

Even in the roughly eight-inch pile of briefs produced for the opening lawsuit against the State of New Hampshire, charging unconstitutional practice in support of public schools (No. 92-711 on the Supreme Court docket of September 1993), less than an aggregate of one-half page from all briefs is given to the funding law of 1789. And that bit comes only from Eugene A. Bishop ("The Development of a State School System: New Hampshire", Teachers College, Columbia University, New York City, 1930) who missed the origin of the law's tax formula in the seventeenth century, and did not address the connection between that formula, which he may have understood, and the underlying effective tax rate which was ultimately so debilitating to public schools.

The conventional wisdom was well summarized in 1968 by William H. Mandry, former president of New England College and once Executive Secretary of the New Hampshire School Boards Association. See A Summary of the Development of the New Hampshire State Department of Education, Concord, New Hampshire, June 3, 1968. There we are told that no tax in support of public education was ever levied directly against the people for that "would have been violently opposed by the local control forces". The whole era of 1789 is glossed over with the claim that "there was no state program or system of education until 1919".

9.

Contemporary Perspectives on Constitutional Interpretation, Eds., Susan J. Brison and Walter Sinnott-Armstrong, Westview Press, 1993.

10. Walter A. Backofen, "New Hampshire's Proportion of Public Taxes: Its Role in Public School Funding, 1789-1919", Dartmouth College Library Bulletin, Nov. 1993, p. 17.
11.

The Valley News, White River Jct., VT, Feb. 14, 1999.

12. Walter A. Backofen, "New Hampshire's Public School System: 1789-1919, The Taxpayer-Oriented Years," Lord Timothy Dexter Press, East Plainfield, New Hampshire, 1994. Here the actual steps in both timing and amount are first summarized and translated into the effective statewide school-tax rate. A copy of this work is on file at the New Hampshire State Library, Concord, NH. A more schematic account is found in the Dartmouth College Library Bulletin of November 1999.
13. See especially The Concord Daily Patriot of November 22, 1850. The proceedings of the convention of 1850 were never published. Selected accounts of sessions in progress were printed by The Concord Daily Patriot and the New Hampshire Patriot and State Gazette of Portsmouth, which the former organized separately in a bound collection of pertinent issues. The original manuscript account of the convention was discovered in recent months in the holdings of the State Archives in Concord, where it has since been transcribed into a roughly 750-page typescript document.
14. The intertown disparities became much compounded as the mandatory school-tax revenue was distributed across the town, by school district. Over time, the average number of such districts came to vary from ten to fifteen per town. The possibilities and outcomes depended upon the intratown distribution formula chosen by the local taxpayers. When there was too little money for a poor district in a poor town, the extreme response was occasionally to suspend school altogether. In this domain, local control retained its hold on money-management practice with little evidence of ever having made a bad situation better. The crisis came in 1885 with legislative repeal of the school-district system that had been launched, reluctantly, in 1805. Support inequities inherent to the Law of 1789 were not relieved, however. A review of the practical consequences is found in the Dartmouth College Library Bulletin of April, 2000, 75-84: "The Distribution of Tax-Generated Support for New Hampshire's Schoolchildren, 1789-1993", by Walter A. Backofen.

New Hampshire's superintendent of Public Instruction for 1880-1892 was James W. Patterson from the faculty of Dartmouth College. His analysis of problems as presented in the Report of the Board of Education for 1887 belies the Court's claim in Claremont I that, "For more than 200 years New Hampshire has recognized its duty to provide for the proper education of the children in this state", which was made only after also ignoring the 85-year interval of intratown school districts.

15. Technically, this quotation came from the Report of the State Board of Education for 1921-22, page 9 et seq, when the opposition to reform in 1919 was being identified. From the record, there is no reason to believe that it was ever different. Among the Court's 1993 citations of evidence of an early belief in adequate support for all was one to Nathaniel Bouton; see his "The History of Education in New Hampshire, A Discourse Delivered Before the New Hampshire Historical Society" (Concord, N.H.: March, Capen and Lyon, 1833). Yet in the year of Bouton's discourse, the intertown per capita support disparity across the state was about 30 to 1 (before compounding at the district level), which he viewed as quite fair. Meanwhile, Bouton put public education second in importance to religious training.
16. "Letters to the Educators, The Case For A Constitutional Amendment", authored by Rasputin, January-August 1998, Granite State Taxpayers. Letter No. 11 on "What Was The Original Understanding", p. 53, uses the Constitutional Convention of 1850 without awareness of the Law of 1789 which triggered it. More recently, an op-edit piece in the Valley News of Aug. 10, 2001, by Robert Boyce, "Claremont Rulings Ignore The Clear Historical Record", written in support of pending House Bill HCR 14, shows the same misunderstanding of that record.

One of the goals of the Convention of 1850 was to raise the prevailing state-mandated support-threshold of $120,000 to $125,000, and thus make the change irreversible. In principle, the mandated sum from 1789 could rise or fall, although it had always gone up before. If the intent were also to cap that amount at $125,000 after what would have been the proportionately smallest one-step increase ever, it hardly looks like an action in support of schoolchildren. For three years later, in 1853, after the amendment's defeat, the legislature on its own lifted the threshold to $135,000, and over the next three years in a row kept lifting it until it reached $200,000 in 1856. Such rapid escalation, producing a 67% increase in seven years, was unprecedented and never seen again. It was as if the legislature was announcing that there was more than money behind the resistance to change.

What Rasputin did not see, evidently, is that by 1850 the state-mandated support-threshold had already been raised from about $16,000 to $120,000. Therefore, rejecting the proposed amendment from 1850 cannot be read as a denial that the practice existed. Perhaps the irreversibility idea is what could not be accepted at the time.

The confusion in the Boyce position is tied to how the threshold mandate was traditionally represented. The amount was always reported as a multiple of 1000, for pounds before 1800 and dollars afterwards. This made the number 125 in 1850, in particular, equivalent to $125 for every dollar of what was called the "proportion of public taxes", with that quantity summing to $1000 for the state as a whole. Thus the statewide mandate in question was $125 x 1000 = $125,000. In practice, each town's proportionate share of the statewide tax base was multiplied by 1000 to define its own proportion of public taxes. That dollar amount, in turn, would have been multiplied by 125 to establish the town's local school-tax obligation for the year in which the aggregate threshold was $125,000.

17. The "rate" was never a part of New Hampshire school-tax vocabulary until 1899 when the local tax rate became a factor in eligibility for the state's first-ever equalized aid to deserving towns (Laws of the State of New Hampshire, 1899, p. 318). Given reapportionment every four years, a rate could not pretend to be uniform more frequently than that. But even then, a comparison of actual, local school-tax rates when no more than mandated support was being made, shows intertown variations of 10-20%. The whole question was once avoided by the practice of making a town's school-tax obligation the same share of the statewide support threshold as its share of the statewide tax base. This area of fuzziness is explored in Walter A. Backofen, "A Quintessential New Hampshire Policy: The Seemingly Forgotten Mandatory School Tax of 1789 to 1919", Dartmouth College Library Bulletin, November 1999, Volume XL (NS) Number 1, p. 26.

The Author

Walter A. Backofen, a resident of Plainfield, New Hampshire, is a former professor of Metallurgy and Material Science at the Massachusetts Institute of Technology. He has had a long-standing interest in the social history of this state.

NHLAP: A confidential Independent Resource

Home | About the Bar | For Members | For the Public | Legal Links | Publications | Online Store
Lawyer Referral Service | Law-Related Education | NHBA•CLE | NHBA Insurance Agency | NHMCLE
Search | Calendar

New Hampshire Bar Association
2 Pillsbury Street, Suite 300, Concord NH 03301
phone: (603) 224-6942 fax: (603) 224-2910
email: NHBAinfo@nhbar.org
© NH Bar Association Disclaimer