Tax Scheme Offsetting Private-School Fees Ruled Illegal

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A unique property-tax-abatement scheme that enabled homeowners in a New Hampshire town to underwrite their children's private-school education has been declared illegal.

Merrimack County Superior Court Judge George Manias last month struck down the $1,000 tax-abatement program authorized by the Epsero Board of Selectmen in December.

Judge Manias ruled that the town officials had overstepped their statutory authority by granting abatements to property owners who paid a secondary student's tuition at either a religious or secular private school. (See Education Week, Jan. 9, 1991 .)

The court said local jurisdictions may grant abatements only in cases where impoverished property owners are unable to pay their taxes or where assessment errors have been made.

The judge further found that what the selectmen had termed "abatements" were in essence tax exemptions, which can be granted only by the state legislature, according to Theodore Comstock, the lawyer re- presenting the Epsom school board.

Because the decision was based on statutory grounds, Judge Manias noted that it was unnecessary to address the state or federal constitutional issue of separation of church and state.

"We in public education feel very good about the decision," said Mr. Comstock, a lawyer for the New Hampshire School Boards Association. "It sends a clear message to other towns this is not an appropriate vehicle to fund private education with public tax dollars."

A number of communities in the state had been awaiting the court decision before entering into this uniquely New Hampshire brand of school choice that had the support of Gov. Judd Gregg and other state leaders. "This clearly would prevent that," said Warren C. Nighswander, the lawyer who represented 36 Epsom plaintiffs.

A dozen property owners have been granted abatements since the program went into effect in the middle of last school year. Two of the parties were students' sponsors, not their parents, according to Mr. Comstock. The property owners will not be required to reimburse the town, he said.

Appeal Expected

Charles Bauer, the lawyer who represented the selectmen, said the decision would be appealed to the state supreme court.

Under state statute, Mr. Bauer said, towns may grant abatements for good cause. "Good cause is broad enough to allow a town to conduct prudent financial affairs, which is exactly what this is," he maintained.

Abatement proponents argued last winter that the measure would save money for Epsom, which sends its secondary students to a public high school in a neighboring community. By paying out a maximum of $1,000 for every student who opts to attend a private school, advocates contended the town would save $3,600 per student in transfer fees.

Vol. 11, Issue 01, Page 10

Published in Print: September 4, 1991, as Tax Scheme Offsetting Private-School Fees Ruled Illegal
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