School Funding: The Battle for Local Control

This time they’re trying to weaken our Maine Constitution (the one they swore to uphold) and to second guess Thomas Jefferson, who authored part of it. Here’s the story behind this week’s hearing before the Education Committee on Thursday, January 8th, at 9 a.m. at the State Office Building in Augusta in Room 120, and it ties in with tonight’s CBS national news broadcast.

We’re in for a sneak attack on the tax front this session. They don’t look like tax bills and that’s what makes them so dangerous. They are LD 1601 (Longley Bill) and LD 1861 (Paradis Bill), both would amend the education section of the Maine Constitution (Article VIII, First Part).

I’ll outline my observations, condensing 25 years of onsite experience in this issue. I realize that many of you were not around at the time or were too young to be aware of the background which I’ll tell you now. This will take a few minutes to read, but I think you’ll be glad you did.

If you watched CBS news tonight (January 4, 1998), you saw there is a revolt going on in Vermont, led by selectmen, over the new funding law enacted by the Legislature following a state supreme court decision handed down this spring. Last March, I was invited to Montpelier by that same selectmen’s group. We had a press conference, but it was too late to stop Act 60 since the idea of giving the state control over the property tax had built up a head of steam and there was no stopping it. Too many political commitments had been made.

In New Hampshire, their Supreme Court came down with the same kind of terrible decision in mid-December. (You can read the actual case on the website of the Union Leader at www.theunionleader. com.) That newspaper, a great voice for common sense, is an outspoken champion of the New Hampshire way of life and is calling for a constitutional amendment which would make it clear that education is a local responsibility. The way the Claremont case reads, the court is nudging them toward broad-based taxes, especially a statewide property tax. New Hampshire neither has nor wants any broad-based taxes. Its schools perform at the highest levels in the country. Its overall tax burden is among the lowest in the nation. They want to be left alone. Read the archives of the News Leader from Dec. 17th on and you’ll get the flavor of the revolt that’s brewing there.

CBS news reported tonight that there are lawsuits going on in 15 states across the country on school finance. This is happening because the Mother of all School Finance Law Suits, the Rodriguez Case, failed to win in the US Supreme Court in 1973. If that case had been successful, then the whole country would have been mandated to have what Maine got in 1973. (The Maine Legislature wasn’t told by Republican and Democrat leaders at the time that the Rodriguez case failed, and they voted for “LD 1994″ thinking that the US Supreme Court had told them to!)

Maine’s “landmark” law, the School Finance Act of 1973 and the Tax Assessment District Law which was required to shore up the Act’s new state property tax has caused outrageous spending from the loss of local control in the last 25 years. It has caused people to have to sell their homes because of taxes, it has been an impediment to business development and it has failed to improve educational results because there is no relation between educational results and expenditure (once minimal provision is made for books, desks, heat, lights, a building and a teacher).

But one good thing happened in the rubble of the SFA of ’73: The people rebelled and by a public vote got rid of the mandated state property tax, thanks to the efforts of the Freedom Fighter movement of the mid-70’s. This was a spontaneous group of men and women who were elected people, mainly selectmen, who feared that state control in several areas (dumps, tax assessment, state property tax) would cause hardship and higher taxes for the citizens they were elected to protect. In the early days, they met in the Grange Hall in the Town of Freedom in Waldo County and, casting about for a name, they decided to honor both the place they were meeting and the concept they were upholding and they called themselves “Freedom Fighters”.

In 1975 and 1976 “Freedom Fighter Meetings” sponsored by selectmen in various towns, with speakers like Theone Look of Jonesboro, John W. Bagley of East Machias and others drew crowds of 300, 500, 700 people. These meetings were reported in newspapers statewide, as well as in publications like Yankee Magazine. When Castine selectmen said they would go to jail rather than collect the state property tax, “60 minutes” came to Maine and the whole Downeast Rebellion went nationwide.

It was in that hotbed of grassroots rebellion that I cut my political teeth. Working with those selectmen and municipal officials and other citizens like myself, we collected enough signatures to put the issue of
the state property tax to a vote and on December 5, 1977… 20 years ago last month… the state legislature had to get their hands off the property of local taxpayers and property became a local tax once again. The Governor then was James B. Longley and he sided with us in saying that he was going to vote to repeal the state property tax. That’s important to note because 20 years later, it is his daughter, Senator Susan Longley, who is leading us right down the dark path to another state property tax for Maine. (That dark path is described in the following piece which I wrote at the request of the New Leader and which appeared in their Sunday Edition, Dec. 21, 1997.) It is irony as well that Senator Longley represents Waldo County, the seed bed of the Freedom Fighting selectmen who worked so long and hard to rid themselves of state control of the property tax.

The two amendments would change or add to the wording which Thomas Jefferson wrote out for Maine’s first Governor, William King, when King visited Monticello prior to the Constitutional Convention which adopted the foundation for the new State of Maine. Since Jefferson had an interest in getting the new state started off right and since he took a special interest in the cause of education, he wrote out the substance of what is our Article VIII, first part, concerning public education. There are no adjectives which willful judges can construe to mean centralized funding. It’s as though the Founding Father outsmarted the 83 school districts who went after his wording in 1994 because, according to Judge Mills (who probably didn’t know that Jefferson is the author) in her Kennebec County Superior Court decision: “…the language of Article VIII, section 1, the legislative history and the case law make clear that there is no constitutional right to a particular funding scheme.”

Judge Mills writes: “Further, unlike the language in many state constitutions, the language in Maine’s Constitution does not contain adjectives which define the level of education or public schools.” (She then cites several examples from various states such as “a general and uniform system of public schools”, “a thorough and efficient system of free schools”, “a basic system of free quality public elementary and secondary schools…the legislature shall fund and distribute in an equitable manner to the school districts etc.”) She says: “Maine requires that the towns make “suitable provision, at their own expense, for the support and maintenance of public schools.” She wrote: “The specific language in the constitutions of Massachusetts and New Hampshire do not require the towns to support public schools.”

With judges paying close attention to words, you can understand how a court (or a legislature) might view the same Jefferson-inspired article if Longley is able to take out that the Legislature’s duty is “to require the several towns….at their own expense” so that it reads that it’s the Legislature’s duty to make provision for schools and then she adds new wording: “and shall seek to ensure that an educational program of uniform and high quality is established and continually maintained in all schools in the State”. (She plans to amend this further to provide more cover for the ultimate court or legislative show down. But we already know her intent now, so whatever revisions she makes will be bad.) The Paradis amendment leaves Thomas Jefferson’s wording as is, but adds this legal opening large enough to drive a school bus to drive through: “The legislature shall ensure that funding is available to provide equal educational opportunities to students at public schools throughout the State.”

Thomas Jefferson’s antique language held off the lawsuit of 83 school districts in Kennebec Superior Court in 1994, and the teacher’s union and the people who benefit from the tax-and- spend school finance act can’t stand it. They want the people of Maine to swap strength for weakness, the brilliance and clarity of a founding father for the kind of smarmy wording which has been used by educational prostitutes nationwide in seeking favors from black-robed justices who take adjectives and turn them into designer funding laws that no one can figure out, much less pay for.

We have the kind of language in our Maine Constitution unique in all the country. No other state has it. It has been challenged and it has held up the principle of local control. New Hampshire and Vermont would die for it, could it magically be inserted into their constitutions this very night.

And we have elected people who are seeking to disarm and weaken our heritage by mucking up that language. Now that you know the story, will you act? Will you go to the hearing on these two bills on Thursday, January 8th at 9 a.m. at the State Office Building in Augusta in Room 120? Will you call your house and senate members of the legislature and tell them to vote NO to tampering with Article VIII? Will you get others to do the same? Will you mention this at your service clubs when the opportunity arises? Will you send this email to your email directory names (personal and business) and ask them to send it to theirs? If you are a member, will you get in touch with the Maine Chamber and Business Alliance, and tell them to back off supporting this effort to amend the constitution? The same with the Maine Municipal Association?

Both these organizations made the same mistake 25 years ago of walking into the school finance politics trap, but they don’t have to make the same mistake twice. Will you write letters to the editor? Will you see the editor of the papers you read and explain the situation and ask them to editorialize in favor of leaving Article VIII just as it is? Will you keep it up until you know that any effort to amend the educational portion of the Maine Constitution is dead and that the intent of Thomas Jefferson in helping us preserve control over our expenditures for schools will remain untouched? Let me know what you plan to do.

Here is the News Leader article from December 21st, 1997: “I read the Union Leader on the internet today and was saddened that the New Hampshire High Court ruled as it did in the Claremont School District case because it seems that you are being set up by the Court for a statewide property tax. If so, I have an urgent tax message from Maine: Our experience with a state property tax was so bad, don’t let the monster be cloned in New Hampshire. A statewide property tax destroys local control, the very foundation of New England towns. The results are higher taxes (both property and general), loss of control over local schools, and a taxpayers revolt. Is New Hampshire prepared for this?

How can you tell if you are being set up for a state-mandated property tax? The decision itself says “To the extent that the property tax is used in the future to fund the provision of an adequate education, the tax must be administered in a manner that is equal in valuation and uniform in rate throughout the State.” That describes a statewide property tax. It may have additional bells and whistles, but it is a state-mandated uniform tax on an equalized valuation, usually with a “recapture” provision which would make “rich” towns send money to Concord for redistribution to “poor” towns.

In 1973 the Maine Legislature did what the New Hampshire Legislature should never do; it gave us a uniform statewide property tax, with the rate levied on the towns and cities by the legislature for the municipal portion of education costs. Under a state property tax, the state takes over the financing of schools using your money to do it, but taking away the local control over the property taxes for education which you have now. With that shift from locally-controlled taxes to a state tax levy right from Concord lies the trouble.

In 1977 the Maine people repealed the state property tax through public referendum, enabled by the citizen initiative process in our Maine Constitution. The tax which sounded like “motherhood and apple pie” was thrown out on its ear after only four years, and we really never recovered from having had it.

Unfortunately, you don’t have that citizen “safety valve” in your Constitution, so your only chance of avoiding Maine’s mistake is to scream bloody murder to your local House and Senate representatives and Governor right now, and make them so afraid of their constituents’ reactions that they back off any serious consideration of a state-mandated property tax. I don’t think your legislators or your Governor are prepared for the rage, revolt and recrimination a state property tax engenders. It not only destroys a state’s tranquillity, but also the political careers of the people who promote it, however well-intentioned they might be.

To put it very simply: A state property tax looks great on paper and in theory, and it might seem to meet the dictates of the Court, but it is like the Maine story of the odorless privy: A fancy lady asked an old Maine carpenter to make her an outhouse that didn’t smell. She was from away and had a camp o one of the nearby lakes. He built her a beautiful privy out of fresh pine, complete with a half moon cut out of the door, and she was delighted. Time passed and he got an urgent call to come and examine the privy because it had started to smell. He humored her and did a thorough inspection of the little edifice before announcing that the problem was “some darn fool used it”.

What happens when a state property tax is actually used? We in Maine experienced the following:

  • Beefed-up local school budgets from the feeding frenzy of so-called “poor towns” and anguish from the high-valuation towns which are penalized when the state-mandated rate, set by the Legislature, is applied. Can you imagine what it’s like for a town to have to raise more money than they need for local educational needs and have to send it to the state bureaucrats? You guessed it. They revolt. The Town of Castine, Maine led the way and refused to even collect the funds which would have gone to the State of Maine, and the selectmen were willing to go to jail to protect their townspeople. (The state property tax comes down on valuation based upon estimates of what somebody would pay for the property today, and does not reflect the owner’s ability to pay the tax bill.) This example of civil disobedience by law-abiding Yankees brought “60 Minutes” to Maine, and the whole story went nationwide. Is New Hampshire prepared for this?
  • Removes local incentive for attracting business and industry. Costs to a town are increased in order to sustain the services necessary to establish and maintain new industry (police, traffic accommodation, water, sewer, etc.). When the valuation is adjusted to include the new valuation of the business, the state requires the town to pay up on that new valuation, and the result here was “Why knock yourself out to attract industry? Let the town next door do it and your townspeople can drive over there to work.” Plus the state of New Hampshire won’t trust the local assessors to value significant industrial plants and the state will likely make provision for state assessors to do the job. This will deliver a blow to major industries, including the skiing industry. Is New Hampshire (and its industry) prepared for this?
  • Changes the relationship between local people and their schools because of who raises the property tax: when it becomes a state tax, the schools, in reality become state schools. It’s called the Golden Rule; whoever controls the gold, makes the rules. Is New Hampshire prepared for this?
  • The State Valuation, based upon “market value” becomes the evil twin of the state property tax, allowing the state property tax to be reduced each year by the legislature, while taking ever-increasing tax dollars out of local taxpayer pockets. Towns will be forced to revalue and the State Valuations will skyrocket after a state property tax is enacted, and you’ll find out that you, too, are from Seabrook, even though that may not be the name of your town. By playing the valuation game, the politicians can say that they reduced the tax rate on your town and never have to take the blame for the increased taxes caused by the increased value of the State Valuation.

When you go to your local selectman to protest, you’ll get no help there because it’s a state rate on a state valuation. There will be nothing the people at town meeting can do, or at the city council level, because it’s not a local tax anymore; it’s a state tax now. When you go to your legislator, he/she will say “sorry, but I did my part, I reduced the rate”. When you go to your local or state assessor, you will be told “but we’re only following the mandated state assessment standards which require us to get as close to market value as possible.” Whose neck do you wring? Under a state property tax there aren’t any necks to wring and that’s what’s wrong with it. There is no way for you to hold down property taxes under the state property tax scheme. Neither will the state property tax be limited to education costs; it will broaden to become a general tax because of politics and because it is statutory. Is New Hampshire prepared this?

The state property tax in Maine was enacted by our legislature because of envy and greed, and we repealed it because of its unfairness and runaway taxes. We had to recover control in order to survive. The excuse for it was a court case, which is familiar to New Hampshire, but the New Hampshire Supreme Court did not proscribe a state property tax. In fact it said “The legislature has numerous sources of expertise upon which it can draw in addressing educational financing and adequacy, including the experience of other states that have faced and resolved similar issues.” Ive outlined Maines experience with a state property tax.

We were told that high valuation “rich” towns would share their tax base with “poor” towns. But we found, once the high state valuations phased in, we were all from a rich town. You will find that you are all from Waterville Valley, that there is no free lunch. High-valuation towns who would suffer under a state property tax scheme at first will be just the canaries in the mine showing you that you’ll be next. If a state property tax is proposed, stand with those towns against it, because what happens to them will, in time, happen to you. A state property tax is simply the state becoming a bandit, forcing you at the local level to hand over the amount of money they tell you to hand over, and leaving you bound and gagged because you won’t have local control anymore to stop them. If Concord ever adopts a state property tax, they should also adopt a new state logo at the same time the law goes through: a mask and a gun, because a state property tax is a hold up.

Maine’s largest daily newspaper, reflecting most newspapers in the state, has editorialized that Maine’s state property tax was “Frankenstein’s Monster”. A state property tax for New Hampshire will likely be an option and actively promoted as a mechanism to fund New Hampshire schools. Whenever its raised, discourage it. Dont let it see the light of day. Vermont towns are rebelling already against a recently-enacted state property tax. In a revolt led by selectmen, they are making plans to get rid of it. Maine threw it out 20 years ago this month (December 5, 1977).

Yours is a town meeting state, just as ours is. Fight for local control for the same reason given by old Captain Preston from the American Revolution, a veteran of the Concord fight. “What we meant in going for those redcoats was this: we always had governed ourselves, and we always meant to. They didn’t mean we should.” Is New Hampshire prepared to fight for local control? Now is the time.


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