Town of Holden v. Wachusett Reg. Sch. Dist.

• Decision Date: 29 December 2005
• Citation: 445 Mass. 656,840 N.E.2d 37
• Parties: TOWN OF HOLDEN v. WACHUSETT REGIONAL SCHOOL DISTRICT COMMITTEE & others.<SMALL><SUP>1</SUP></SMALL&gt
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

840 N.E.2d 37

445 Mass. 656

TOWN OF HOLDEN v. WACHUSETT REGIONAL SCHOOL DISTRICT COMMITTEE & others.¹

Supreme Judicial Court of Massachusetts, Worcester.

Argued September 8, 2005.

Decided December 29, 2005.

John O. Mirick, Worcester, for the plaintiff.

Jane L. Willoughby, Assistant Attorney General, for Department of Education.

Brian W. Riley, Boston, for town of Rutland.

Present: MARSHALL, C.J., GREANEY, IRELAND, SPINA, & CORDY, JJ.

MARSHALL, C.J.

This case lays bare the tensions between education reform measures enacted by the Legislature in 1993 (the Education Reform Act, St.1993, c. 71, which established a wholly new system for public school finance and governance in the Commonwealth) and agreements reached by small towns that joined together (sometimes decades ago) to form regional school districts to provide a quality education beyond their capacity to provide individually. The Education Reform Act encompasses the Legislature's determination that wealthier towns in the Commonwealth pay a higher proportionate share of the costs of educating their students than less affluent towns. At issue here is an attempt by four of five towns in the Wachusett Regional School District (Wachusett district) to redress what they view as an undue financial benefit that the fifth town receives under the Education Reform Act.

The Wachusett district comprises all grades from prekindergarten through grade twelve for its five participating member towns, including Holden and Rutland.² It is governed by the Wachusett Regional School District Agreement (Wachusett agreement). Under the Education Reform Act, the commissioner of the Department of Education (commissioner) sets wealth-based minimum required local contributions from each town. See G.L. c. 70, §§ 2, 6. In 2002, four of the Wachusett member towns (all but Rutland) approved a proposed amendment to the Wachusett agreement changing the manner in which the Wachusett district would assess to each member town amounts that the district opted to spend in excess of the annual contributions required by the commissioner. If implemented, the proposed amendment would require the least affluent town (Rutland) to pay almost all of the additional assessment, while a wealthier town (Holden) would pay none. On his review of the proposed amendment, the commissioner declined to approve it.

Holden initiated this lawsuit and moved for summary judgment to challenge the commissioner's authority to review the proposed amendment, as well as his substantive determination declining to approve it. Rutland opposed the motion and moved for summary judgment. As we shall later describe in more detail, a judge in the Superior Court entered summary judgment in favor of Rutland. We affirm, but for reasons different from those of the judge.

1. Background. The relevant facts are not disputed. The Wachusett agreement was first approved by the member towns, the Department of Education (department), and the Emergency Finance Board in 1951, pursuant to G.L. c. 71, § 14B. That statute provides for the establishment of regional school districts and agreements to govern such districts, and requires, inter alia, that each regional school district agreement include "[t]he method by which the agreement may be amended" and "[a]ny other matters, not incompatible with law, which the said [regional district planning] board may deem advisable."³ The record reflects that the Wachusett agreement was amended at least three times, in 1977, 1993, and 1998.⁴ In both 1993 and 1998, i.e., on the two occasions since the enactment of the Education Reform Act, the amendments were submitted to and approved by the commissioner.⁵

As required by G.L. c. 71, § 14B, the Wachusett agreement contains a procedure for enacting amendments: "This Agreement may be amended by recommendation of the [Wachusett] Regional School District Committee[⁶] [committee] and approval of the member towns of the District by majority vote at an annual or special town meeting provided that not more than one town disagrees." As is also required by G.L. c. 71, § 14B, the Wachusett agreement contains a procedure for apportioning expenses: "Payment of all operating costs shall be apportioned among the member towns on the basis of their respective previous five year average total enrollment as of October 1st of each year of the preceding five fiscal years."

The 1993 Education Reform Act "made significant changes to the governing structure and financing of the Massachusetts public school systems." Massachusetts Fed'n of Teachers, AFT, AFL-CIO v. Board of Educ., 436 Mass. 763, 765 n. 3, 767 N.E.2d 549 (2002). The new system of school finance, codified in G.L. c. 70, requires the commissioner annually to establish a minimum required local contribution from each city or town toward the operation of its public schools. See G.L. c. 70, §§ 2, 6. The complex formula used to calculate each city and town's minimum required contribution is wealth based, and requires relatively wealthier towns to make greater contributions than relatively less affluent towns. Id. As is the case with the Commonwealth as a whole, towns in regional school districts that have higher property values, higher income levels, and a greater ability to raise revenue have a relatively larger required contribution than towns in which the converse is true. Id. See Hancock v. Commissioner of Educ., 443 Mass. 428, 437, 822 N.E.2d 1134 (2005) (Marshall, C.J., concurring) (Education Reform Act "eliminated the principal dependence on local tax revenues that consigned students in property-poor districts to schools that were chronically short of resources, and unable to rely on sufficient or predictable financial or other assistance from the Commonwealth").

In instituting the new funding scheme, the Legislature specifically provided that the minimum required local contributions supersede the assessments as calculated under a regional school district agreement.⁷ Then in 1996, three years after the Education Reform Act, the Legislature provided that members of a regional school district could, with the approval of every district member, agree not to be bound by the funding formulas established by the Education Reform Act, but could instead "elect to reallocate the sum of their required local contributions to the district in accordance with the regional agreement." G.L. c. 71, § 16B. In the absence of a unanimous election, the Education Reform Act limits a regional agreement's apportionment formula to allocating assessments, if any, in excess of the minimum required local contributions. To that end, G.L. c. 70, § 6, provides: "The district may choose to spend additional amounts; such decisions shall be made and such amounts charged to members according to the district's required agreement."

In March, 2002, the committee voted to recommend amending the Wachusett agreement by eliminating the provision that apportioned excess costs among the five towns on a per capita basis, and substituting a new method of allocating any excess costs the Wachusett district opted to spend. The proposed amendment was designed to work as follows: first, each member town's per capita assessment of the excess spending amount would be calculated. Then, if a member town had paid more under the Commonwealth's system of wealth-based required minimum local contributions than it would have under the per capita system, it would receive a "credit" of the difference, while a town that paid less than it would have under that system would receive a "debit." These debits and credits would be taken into account in establishing the apportionment of the excess costs the committee voted to spend each year.

Although the proposed amendment ostensibly concerned only the apportionment of costs above the minimum local contributions required by the commissioner, the effect of the amendment ensured that the member town with the smallest per student contribution set by the commissioner (Rutland) would be required to pay far more than its per student share of the excess amount that the committee voted to spend each year, while the towns with a relatively greater per student required local contribution (e.g., Holden) would be required to pay far less or even nothing of the excess recommended by the committee. The Wachusett district's proposed 2004-2005 budget starkly illustrates this disparity. According to Holden, the committee voted to spend $3,091,369 to educate the Wachusett district's children beyond the money available from other sources, including the minimum local contributions required by the commissioner. The proposed amendment would require Rutland (the poorest town) to pay approximately $3 million of that amount, while Holden would be required to pay none of it. The other three member towns, Paxton, Sterling, and Princeton, would pay the remaining small amount.

Holden readily acknowledges that the purpose of the proposed amendment was the outcome described above; that is, to require Rutland to pay by far the largest share of the excess because under the wealth-based formula established by the Education Reform Act, Rutland, a less affluent town, was required to pay far less than Holden on a per student basis. As Holden explained: "[I]t is unfair for Rutland to pay significantly less than Holden on a per student basis, particularly when the [Wachusett district] was created on the concept of an equal per student payment from each member town."

At their respective town meetings held during April, May, and June, 2002, Holden, Paxton, Princeton, and Sterling each voted to adopt the proposed amendment, while Rutland voted not to adopt the proposed amendment. The committee then forwarded the proposed amendment to the commissioner, although the record does not indicate when or for what purpose.⁸

On June 10, 2002, in a letter to the chairman of the committee, the commissioner declined to approve the proposed amendment. The commissioner...