NH Supreme Court Upholds SWEPT Surplus Retention by Wealthy Municipalities

The New Hampshire Supreme Court ruled in a 3-1 decision that the Statewide Education Property Tax (SWEPT) is constitutional, affirming that it is assessed uniformly and equally across municipalities despite wealthier communities retaining excess revenues. Chief Justice Gordon MacDonald emphasized that taxpayers are assessed at a uniform rate, and municipalities keeping surplus SWEPT funds is a legislative spending decision beyond constitutional scrutiny. The court also ruled that the Department of Revenue Administration's practice of setting negative local school tax rates in some unincorporated areas is unconstitutional. The ruling overturned a lower court decision that had found the SWEPT system unconstitutional for creating unequal effective tax rates, sparking criticism from education funding reform advocates who view the decision as a setback for equity. The Attorney General's office supported the decision, highlighting legislative authority in spending tax revenues, while dissenting Justice James Bassett criticized the majority for prioritizing form over substance. Since 2011, wealthier towns have been allowed to keep excess SWEPT revenues, a change that maintains disparities in education funding across New Hampshire municipalities.